Front Burner - Trudeau, Kielburgers grilled in hearings on WE controversy

Episode Date: July 31, 2020

On Thursday, Prime Minister Justin Trudeau and his chief of staff Katie Telford appeared before the House finance committee to answer questions about the government's decision to select WE Charity to run the federal government's $900-million student volunteer program. Earlier this week, WE co-founders Marc and Craig Kielburger also appeared before the same committee. The choice to select WE Charity for the program is also being investigated by the federal ethics watchdog because of Trudeau's ties to the organization. Today on Front Burner, CBC Power & Politics host Vassy Kapelos breaks down the prime minister's testimony, and brings us up to speed on the WE Charity controversy.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Josh Bloch. Prime Minister Justin Trudeau testified before the House Finance Committee on Thursday afternoon. We Charity received no preferential treatment, not from me, not from anyone else.

The public service recommended We Charity, and I did absolutely nothing to influence that recommendation. And if you're wondering how we got here, let me quickly bring you up to speed. Back in late June, the government announced that We Charity would administer a half-a-billion-dollar student aid program the new Canada Student Service Grant, which will allow post-secondary students and recent grads to gain valuable experience while also contributing to their communities. Immediately, there were questions about Justin Trudeau's long-standing ties to the WE organization, founded by the Kielberger brothers, Mark and Craig. If civil servants are going to say that there is no other charity that could come close to matching what we could do, where is the evidence?

Why are we left to just take Justin Trudeau's word once again for what happened? I want Prime Minister Trudeau and the Liberal cabinet to waive all confidentiality, disclose everything that happened around this, because there are just far too many questions that are unanswered. By early July, the partnership to deliver the student grant program was cancelled. But that didn't stop the revelations from coming. We've since learned that Justin Trudeau's mother and brother were paid for appearances at WE events. We said that through its sister company, Me2We, Margaret Trudeau received a quarter of a million

dollars for a total of 28 events since 2016. And says the prime minister's brother, Alexandre Trudeau, received $32,000 for eight events. That one of finance minister Bill Morneau's daughters had been an employee of the WE organization. And that just last week, Morneau wrote a $41,000 check to WE to repay travel expenses the organization had covered for himself and his family to Ecuador and Kenya. The ethics commissioner is investigating both Morneau and Prime Minister Justin Trudeau for possible conflict of interest surrounding the WE deal. And this week, both the Kielberger brothers and Trudeau himself appeared before the House Finance Committee to take

questions about the controversy. Today, Power and Politics host Vashi Kapelos on what we've learned at these hearings and where this could all be heading. This is Frontburner. Hello, Vashi. Welcome back to the show. Hi, great to be here. So I guess, first of all, you know, I understand it's kind of unusual for the prime minister to go before a committee like this. Is that right? It's unusual, but not unheard of. So other prime ministers have definitely appeared before committees, but the majority of the time it's always about policy, usually, that they're testifying about. I have never seen it. And now that I've Googled it, I know that it's very rarely happened that a prime minister will appear before a committee right smack in the middle of a controversy. Right. So why would he do this?

Well, that is the million dollar question. And what I was asking basically everyone who would talk to me or anyone who would talk to me that surrounds him over the past week, I think that from my perspective or from the perspective they conveyed to me, they were really interested in trying to let the oxygen out of this all at once to sort of, you know, they feel like they don't have anything nefarious to hide. And so they felt like the best way to convey that and to communicate that to Canadians was to, in fact, not hide from the committee and sort of, as I said, like let the oxygen out of something that got a lot more oxygen than they would have preferred.

Well, so, you know, these hearings are obviously more than just a fact-finding mission. Everyone's got the political points they're trying to score. It's true. That's what I'm told. But what, in this case, what stood out to you as the main points that the committee members were trying to drive majority of their questions was this was not an innocent decision or innocent suggestion of the public service, that in fact, this is a charity that has close connections. And I'm paraphrasing what the opposition is saying here, but has close connections to the prime minister and his inner circle, which includes the finance minister. And so they were put in a position to be advantaged by that connection to the disadvantage of other organizations or the public service or Canadians overall at the end of the day. So that's what the opposition worked to prove, I think, with their questioning. So you saw,

for example, a lot of questions about how much money the prime minister's family, his mom and his brother and his wife have been paid. What is the total dollar value of all of the expenses reimbursed, fees paid to, and any other, any other consideration provided by the WE group to you, your mother, your spouse, your brother, and any other member of your family. Just the total, please. How much of the expenses that they've incurred have been reimbursed? Like, they're trying to show or trying to ask questions that show

there is a real connection there between the prime minister and between this organization. And so the decision to enter an agreement to have them administer this program was not an innocent one. It was a nefarious one. And I think that's what those questions were focused on. So I want to go through a little bit more about the narrative that Justin Trudeau was putting forward today. And it really seemed to center around his insistence that he only learned that we was going to be involved in the Canada Student Services Grant Program on May 8th. He kept talking about this day, May 8th. My knowledge of we being involved in delivering this program

only happened on May 8th, not on May 5th, as you are saying. What's the significance of that? Yeah, I actually think the information that he put out today does add or inform the narrative going forward to a pretty significant degree. It was more significant than I kind of thought any information would be coming in to the committee. He kept talking about May 8th right off the bat in his opening remarks. He says he had no idea, no one had talked to him, no one had informed him or discussed with him the possibility or probability that We Charity would be tasked with administering this program,

that it would be outsourced and that it would be outsourced, in fact, to We. And he says he found that out on May the 8th and right before Cabinet. He was being briefed before Cabinet when Cabinet was going to discuss this. Policy staff in my office had been working with the Privy Council office and other departments. They knew that We Charity was under consideration. However, I never spoke with my staff about We Charity or its proposed involvement in administering this program until May 8th. So he realized the optics, he says. He then pulled it from the agenda of cabinet and said, I have more questions. We need to take a second look

at this. And so a two-week period lapses in which that apparently took place. And then on May 22nd, it goes back to cabinet. And that's ultimately when it ends up being approved. So again, like the central thesis he's putting forward, argument he's putting forward is I couldn't have made this direction. I couldn't have said help my friends or not that he says they're friends, but I couldn't have said help these guys out because I didn't even know until May 8th. But he and he did say, you know, when he found out on May 8th that he pushed back on the proposal, that he had concerns right away. We both felt that we needed more time before this item was presented to cabinet, time to consider and understand the reasons behind the proposal that we, charity,

deliver the program. On that issue, we had several questions that we wanted answered. But did he talk about what those concerns were? He didn't so much, but his chief of staff, Katie Telford, did. She was asked, you know, were there concerns about his family, for example, and the amount of money that they've received for their speaking engagements? And she acknowledged that, yeah, he had some of those questions. And especially, like, for their speaking engagements. And she acknowledged that, yeah, he had some of those questions. And especially, like, was he concerned about the optics of handing this program, outsourcing it away from the public service to specifically We Charity?

And she said, yeah, those are the questions that he was asking too. Now, what we don't know, however, is what kind of information was provided back, what kind of evidence was supplied to the prime minister and, for example, his chief of staff that ultimately led them to believe that, in fact, it would be a binary choice, that it was either we or nothing? I was briefed again on May 21st, and the public service told me that they had done the due diligence we'd asked for, that they were confident in the recommendation. In effect, they said that if we wanted this program to happen, it could only be with WE charity. Like we still don't know what convinced them that this was the way to go in spite of the concerns they had around the ethical implications. saying that he identified that there were some issues with handing over this program to we on May 8th when he found out about it. But then by the time they grant the contract to we,

he doesn't decide to recuse himself from that decision. I think that's like a super smart point. Like that is the thing that jumped out at me too. So you realize that there was the appearance of conflict on May 8th, but by May 22nd, you didn't think that that appearance necessitated your recusal from ultimately signing off on the decision. Like there is sort of a weird how do you rectify those? And there were some questions to that effect. And I didn't think there was really any kind of answer that, I guess, justified it. Do we know how much vetting of WE charity was done before they were awarded this sole source contract?

We don't know the complete depth to which it was vetted, but we do know some of the lack of it, to be honest. And in that vein, I mean, for example, the clerk of the Privy Council, who's kind of the top bureaucrat in charge of the bureaucracy, he liaises between the prime minister's office and the bureaucracy. His name is Ian Chugart. Last week, he said, Katie Telford really wanted us to do our due diligence. And in that respect, she wanted us to make sure that this charity had the capacity to deliver the program. There were a ton of questions, however, around all the things that have come out about WE, especially as they pertain to its financial position. The chair of the board of directors

resigned. She testified a few days ago and said, they laid off all these people. We wanted to know what the justification for it was, what the financials were, and they wouldn't provide it. And then they asked me to resign. So there's all these questions about like, was we really actually best positioned to deliver this program? Should they have been awarded this? And it really looks like, according to Mr. Shugart's testimony and that of other ministers, that those questions weren't even examined. And the justification for that the government has put forward so far is largely due to like we just wanted to get help to students and we had to do it quickly. But I think those those questions are pretty valid as well about like what process occurred in those few weeks. Like what what kind of vetting were you doing here if days after you announced it,

immediately the alarm started sounding? So you did you know that the chair of the board had resigned? Yes or no? No. So you did not clearly did not do any due diligence of your own. As the chair of the cabinet responsible for approving a decision, you should have had some basic facts. You mentioned there's been a lot of questions about the WE Charity itself, the WE organization, and WE Charity got a very public vetting on Tuesday when they appeared before the same committee.

Do you feel like some of those questions were answered at that time? Or did it just raise more questions? Oh, yeah, that's a good one. I feel like I have a million questions. And I'm not I want to, you know, preface this by saying I'm not an expert on we I've become, you know, immersed in it due to the politics surrounding it over the past number of weeks, but I sure have been reading what I can. And I did pay very close attention to the testimony that preceded the Kielberger brothers, like I said, from Michelle Douglas, who was the chair of the board for a decade, like very, very integrally involved with the organization. And the picture she painted in March of this year was when the pandemic struck,

we know it's affected the not-for-profit and charitable sector in a big way. And so much so that they ended up firing like hundreds, 200 people. As the days went by, the number of job losses grew quickly into the hundreds. The board felt, of course, a duty to protect the organization and to consider the interests of its stakeholders, including its employees, its donors, partners, beneficiaries and others. And she described a situation when she was saying, you know, why are you doing this? Where's the information? She kept asking, asking. They never provided it.

They never provided any of the financials that she asked for. And then she got a call from one of the brothers asking her to resign. So questions around things like that, for example, were directed towards the Kielberger brothers. And they insisted that the board changes had been in the works from 2019. They said it was well-planned but not well-executed. A well-planned, well-executed process took place. Sorry, well-planned. I will acknowledge not executed as well as we had hoped.

The process took place starting in fall 2019, looking at board renewal as we approached 25 years as an organization. They fought back against the characterization that they were in financial trouble. They said they had actually by laying off those people alleviated some of the financial difficulties they were facing. But I do still feel like I don't know, everyone I talked to had this sense after like there are still a lot of unanswered questions, I guess, about some of the practices of this organization. It's clear, I should say, to be fair to you, that they feel like they have been very maligned by all this and unfairly characterized by the media. Ma'am, if I may say, if a fraction of what we've heard

over the past four weeks was true, published in media or shared on social blogs or shared even by various politicians, our face would go pale. This is one of the many things that are incorrect. And that they have taken a huge hit. Like we have to mention RBC and TELUS and other organizations have pulled their partnerships or suspended them and are reviewing them. WE itself has halted those famous WE days in this country. They're going to focus on their international development work, they said. So it's clear that, you know, they said even they wish they never picked up the phone, as they said, for the public servant that

called them about this program. So it's had a big effect on them, too. And I feel like those questions are just not abating right now. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years.

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And of course, as you mentioned, one of the central questions that was being asked of Justin Trudeau is this perception or this potential conflict of interest between his family and WE Charity. You know, Trudeau was asked repeatedly about the amount of money his family has received from the WE Foundation, his mother, his wife, his brother over the years. How did Trudeau respond to those questions? He said he didn't have the figure, but that they were publicly available. Reimbursing expenses is something done by an organization, for example. So I don't have those totals. Just a quick, kind of funny side note. I kept getting these messages because on CBC, we have these boards kind of that go up next to our graphics that go up next to our. So you were

watching the prime minister say he had no idea. And then the information was up on the side of the screen. So it was like the same thing. Yeah. Right. So so so it's clearly out there. I think those questions, though, sort of stepping back for a second, really speak to what the opposition has been very focused on, which is, look, they made nearly $300,000, his mother and his brother, and they were reimbursed for another, along with Sophie Grigore-Trudeau, another $212,000. Save for one payment to Sophie Grigore-Trudeau, all of them happened since the prime minister became the prime minister. So all of them took place since 2015.

So if you're trying to make the argument that there is some sort of relationship, though both the brothers and the prime minister deny it was a close friendship or anything of the sorts, but that there's some sort of relationship in which one side benefits or both side benefits, like that kind of information ends up being pretty significant overall. And not to take away from any of Margaret Trudeau's accomplishments or Alexander Trudeau or Sophie Gugard Trudeau, but when you look at that, you stack up their payments and the timing of them, and you realize like it only took place since the prime minister was the prime minister. I think that's what's driving some of those questions around conflict. And it was a question that that conservative MP Pierre Poiliev was definitely

going after Justin Trudeau on. And I have to say it was maybe my favorite three minutes of Canadian political television when in the middle of this line of questioning, the chair of the committee, Wayne Easter, who is keeping people on time, suddenly his video conferencing system went down. I mean, his power went out. Oh, my gosh. And it was just anarchy. Point of order to suspend. I've come to learn that the chairperson's power has gone out and is no longer part of this meeting.

I don't know what it says about me that I live for stuff like this, but I could not stop laughing. So the power goes out and then the chair's in the dark and someone starts saying it. And Pierre Polyev's in the middle of this like super testy, classic Pierre Polyev moment with the prime minister. Across the country. Mr. Prime Minister, you are being asked a direct question at a parliamentary committee. And all of a sudden someone says, well, the vice chair has to take over. And then Peripaliev says, that is me. And then he says. So we'll continue the meeting. And I now give the floor to the member for Carleton.

Mr. Prime Minister, you have. Like I was just, oh, my goodness. And then the lights come back on and the chair resumes his position. I mean, it was pretty classic Canadiana. A little moment of levity. So we talked earlier about what MPs, you know, the committee members were trying to accomplish with their questions. Do you think they succeeded? I don't know, to be honest. I feel like I was so immersed in it for so long the past afternoon

that I'm not, I'm trying to take a sort of step back and think what the overall impact was. Do I think that it, for example, you know, added a huge amount of new oxygen to what they've been saying about the prime minister? I don't think it did necessarily. I don't think just like on Tuesday, I don't think there was any kind of deafening blow. But I also think that there are still some really pertinent, outstanding questions that like raise people's spidey senses a bit, right? Like I just talked about the timing of the payments or even the fact that, okay, the prime minister doesn't know till May 8th. They don't announce the program till the end of June, but somehow they're able to just go ahead with the contract and start getting expenses and making the hires like there's something that

still feels a little bit off. And I think their questioning did, I guess, provide some oxygen to that. At the same time, I did feel like the prime minister provided new details that will ultimately work to, you know, help to substantiate the position that he wasn't directly interfering in anything. Obviously, the opposition is not going to buy it. I just interviewed both leaders and they were like, I don't believe it. I haven't seen anything to substantiate it. And this is coming from a prime minister who has been dishonest in the past. We just look at the actual evidence we have in front of us.

And the evidence is, absent his comments, it still doesn't change the fact that the way the criteria were set out, it was set up to only be answered by one company. So I think they're going to keep asking questions. But I think overall, like for the public, did it ultimately change their mind? Did it end it or keep it going? I feel like it'll probably keep going to a certain degree, but I don't know if it just got a whole lot worse or anything for the government. We've been watching these committee hearings closely, but do you get a sense that this is a story that is connecting with people more broadly across Canada? So my instinct at first was probably not since we're like in the, because that's what everyone tells me on Twitter, like, stop talking about this. Nobody cares. So and plus, we're in the middle. That's like normal times. Now we're

in the middle of a pandemic where people have very real financial and health related concerns. So my initial instinct was no. But as time has gone on, I realized that that I think actually more people than I initially thought were paying attention. And in particular, what I what I find so interesting is that my phone is is blowing up with liberals who are talking about it. Like there more people than I initially thought were paying attention. And in particular, what I find so interesting is that my phone is blowing up with liberals who are talking about it. Like, there are a lot of people who were very disappointed that here we are again in a controversy, and this is how they conveyed it to me, of our own making. And then I think more broadly, besides just people who are interested in politics, I think this is not the hardest thing to digest. It's not like you need to watch four hours a day of TV to kind of get to the

bottom of this. I think it's a simple sort of narrative that feeds into vulnerabilities the prime minister and his cabinet and his government have had in the past around ethics, around seeming a little bit out of touch, right? And so I think that there's something about that that does resonate with people. I think that this kind of thing, though, reaches a point where people kind of come up with their camps and they make their ultimately their decision. They're rendering on who they think is right and who they think is wrong. And I think we're inching towards that point where there's not going to be a huge

subsect of the population that's like, well, I don't know which way I fall on this. They're going to kind of grind in, I think, sometime soon. And then we'll see what that does to the trajectory of it. Vashi, thank you so much for speaking with me. Thanks so much for having me. Before we go today, some news about a story that we're working on. Several provinces across the country have now announced their back-to-school plans. This week we learned that in Ontario, elementary school students will be going back full-time. High school students, though, will split their times between the classrooms and online learning.

But in BC, K-12 students will be separated into, quote, learning groups to limit the number of people they'll be in contact with. This is all very difficult to navigate,

with parents worried about their kids' safety given the ongoing threat of COVID. Next week, we're going to parse through all of that, so stay tuned.

That's all for today. FrontBurner is brought to you by CBC News and CBC Podcasts. The show was produced this week by Imogen Burchard, Sarah Jackson, Allie Janes, Nahayat Tzizouche, and Derek Vanderwyk. Mandy Sham does our sound design, with help from Billy Heaton. Our music is by Joseph Chabison of Boombox Sound. The executive producer of FrontBurner this week was Elaine Chao. I'm Josh Bloch. Thanks for listening. Back on Monday.