WE Charity Scandal: Who Said What at the Committee Hearings

August 5, 2020 Updated: August 11, 2020

As parliamentarians questioned key witnesses over five days in July on the latest scandal to beset the government, Prime Minister Justin Trudeau, Finance Minister Bill Morneau and WE Charity co-founders Marc and Craig Kielburger expressed regret and apologies, with some of the testimony offering new revelations.

“We didn’t recognize how this decision would be perceived,” Craig Kielburger said on July 28, referring to agreeing to distribute $912 million in federal funds to paid student volunteers through WE Charity Foundation, a separate entity under the WE organization’s umbrella.

“We would never have picked up the phone when the civil service called asking us to help young Canadians get through the pandemic if we had known the consequences.”

During often tense questioning, Marc Kielburger said the PM’s mother Margaret Trudeau was compensated nearly $168,000 for travel and accommodation expenses on top of $312,000 in speaking fees for 28 WE event appearances—news originally reported by Canadaland.

Beyond political fallout, other consequences for Trudeau and Morneau include coming under federal Ethics Commissioner Mario Dion’s magnifying glass.

On July 3, Dion announced his office would investigate Trudeau’s participation in the cabinet decision to award the Canada Student Service Grant (CSSG) contract, given his family ties to the charity that also included speaking fees and expenses for WE appearances by his brother Alexandre Trudeau and wife Sophie Grégoire Trudeau.

On July 16, when the finance committee convened for day one of its review of how the contract was awarded, Minister of Diversity, Youth and Inclusion Bardish Chagger told MPs the deal was worth $43.5 million to WE Charity—more than twice the amount originally reported.

The same day, Dion added Morneau to his conflict of interest probe of the contract following opposition MPs’ written request in the wake of media reports that both Morneau’s daughters benefited from WE Charity, specifically his adopted daughter Grace Acan who currently works for the organization.

On July 22, six days before the Kielburgers testified, Morneau appeared before the finance committee. In a stunning admission, he said he had just cut a cheque to WE Charity for more than $41,000 in unpaid expenses incurred for a pair of 2017 trips his family took to the Kielburgers’ overseas operations, one to Kenya and another to Ecuador.

“I expected and always intended to pay the full costs of the trip. … I want to apologize for this error on my part,” said Morneau, claiming it was an oversight; the family had already shelled out $52,000, he said.

WE Charity sites enjoyed by the Morneaus in South America and Africa are among destinations for “voluntourism” adventures that the Kielburgers’ for-profit entity ME to WE markets to students during WE Day events hosted by the charity and held across Canada each year, as well as in the United States and United Kingdom.

Michelle Douglas, the recently expunged chair of WE Charity’s board of directors, testified she had been with the charity for nearly 15 years and a member of the board for a decade when Craig Kielburger asked her to resign on March 25.

According to Douglas, it was over a dispute regarding financial records—she wanted justification for the nearly 400 layoffs at the charity as the COVID-19 pandemic restrictions were rippling through the economy.

“I resigned because I could not do my job. I could not discharge my governance duties,” she said. “By March 23rd, (the board) had not seen any written evidence, reports, or raw data to support the drastic measures being taken by the organization.”

On top of the board being kept in the dark about important financial information, Douglas was also unaware of high-profile guests like the Morneau family and the total number of WE-branded entities in the Kielburgers’ network of foundations, charities, and for-profits.

“I don’t know the actual number, no … I’m not sure I could provide that with any precision,” she said when pressed for a figure.

Real Estate Holdings

As the scandal over the CSSG contract intensified, media turned its attention to real estate the Kielburgers have amassed in Toronto. A National Post story documented nine properties worth $43 million the brothers owned through three entities: the for-profit ME to WE Social Enterprises Inc., ME to WE Foundation, and WE Charity.

By the time Douglas testified in an hour-long session on July 28 (before the Kielburgers), media outlets had reported that the deal was between the federal government and WE Charity Foundation, not WE Charity. Chagger’s office later confirmed this and provided supporting documents to the finance committee.

Global News reported that WE Charity Foundation was set up in 2018 as a real estate holding vehicle, but the Kielburgers said in their testimony that that was erroneous, and explained the contract was made between the government and the foundation to indemnify WE Charity.

“We have sought to have that information [in the Global story] changed multiple times … it was not a real estate holding company, it has never held any real estate,” Marc Kielburger told the committee.

“[Employment, Skills and Development Canada] asked us to assume full liability for up to 40,000 young people who would be volunteering … and all the non-profits those young people would be volunteering at.”

The consequences of the scandal have been significant for the Kielburgers’ philanthropic web of charities, foundations, and its for-profit ME to WE, the latter of which was acting as a travel agent for the charity’s “voluntourism” outreach in places like Ecuador, India, and Kenya.

On the same day the brothers appeared before the all-party finance committee, Royal Bank announced it was detaching itself from WE Charity, following in the footsteps of Telus, Virgin Atlantic, KPMG, GoodLife Fitness, and Loblaws, who similarly cut ties.

When Trudeau testified on July 30, he denied that WE had received preferential treatment, insisting that “the public service recommended WE Charity.”

“When I learned that WE Charity was recommended, I pushed back. I wanted to be satisfied that the proposal that WE Charity deliver the CSSG had been properly screened,” he said.

“I should have recused myself, but I didn’t. I decided to push back instead, and that I regret because young people aren’t having the opportunities they would have had this summer through that program.”

Trudeau’s chief of staff Katie Telford, who also appeared before the finance committee on July 30, said she, too, regretted not recusing herself from discussions about having WE Charity administer the grant, and that more scrutiny could have been added to the process.

“In hindsight, I recognize that while we did ask many questions to make this program a success, we could have done better. We could’ve done more. We could’ve added yet another layer of scrutiny to avoid any potential perception of favouritism,” she said.

On July 21, Clerk of the Privy Council Office Ian Shugart testified that no staff from the finance ministry or the Prime Minister’s Office discussed with his office about possible WE Charity involvement in dispensing the Canadian Student Service Grant.

Shugart also noted that “no financial flags were raised through this process about the WE Charity.”

“To the best of my knowledge, officials did not engage in detailed scrutiny of the financial affairs of the organization,” he said.