Politics

After 4-hour grilling by MPs, WE co-founders insist they had no financial motive in student grant deal

WE Charity co-founders Marc and Craig Kielburger emerged from a four-hour grilling at the hands of opposition MPs today insisting they did not stand to gain financially from running the Liberal government's $900 million student grant program nor did they exploit their ties with the Trudeau family to secure the deal. 

Former WE board chair Douglas said she would have been 'surprised' to learn Trudeaus had been paid to speak

Co-founders of WE Craig (left) and Marc Kielburger (right) are seen on stage during WE Day California in Inglewood, California, U.S. April 25, 2019. The brothers spent four hours in front of a committee of MPs today answering questions about their role in the federal government's student grant program. (Mario Anzuoni/Reuters)

WE Charity co-founders Marc and Craig Kielburger emerged from a four-hour grilling by opposition MPs tonight saying they did not stand to gain financially from agreeing to run the Liberal government's $900 million student grant program — and insisting they did not exploit their ties with the Trudeau family to secure the deal. 

Craig Kielburger told MPs on the House of Commons finance committee he and his brother Marc agreed to administer the Canada Student Service Grant because they wanted to fulfil the mandate of their charity by helping young Canadians — not because they wanted to make a profit off the deal.

"WE Charity agreed to implement the Canada Student Service Grant not to be helped by government, but to help government and to help young people across Canada," he said.

Since Prime Minister Justin Trudeau first announced that WE Charity would run the program last month — despite the charity's prior relationship with the Trudeau family — the charity and Trudeau have come under intense scrutiny by opposition parties and the media. 

Two parliamentary committees are now studying the now-defunct deal and both Trudeau and Finance Minister Bill Morneau are being investigated by Mario Dion, the conflict of interest and ethics commissioner, over allegations of impropriety. 

The atmosphere on the finance committee Tuesday was often tense — with Liberal MPs on the committee focused on arguing for the value of WE Charity's involvement in the program and opposition MPs questioning the truthfulness of the Kielburgers' testimony. 

At one point during today's hearing, Conservative MP Pierre Poilievre interrupted the Kielburgers multiple times — leading to a verbal tug-of war with committee chair Wayne Easter, who threatened to shut down the proceedings.

Prime Minister Trudeau and Katie Telford, his chief of staff, will appear before the House finance committee on Thursday to answer questions about their role in bringing WE Charity in to run the program.

Watch: Craig Kielburger's opening statement to MPs:

Craig Kielburger's opening statement to MPs

1 year ago
12:00
Craig and Marc Kielburger, founders of the WE Charity, spoke to MPs on the Commons Finance committee Tuesday. 12:00

WE Charity's reputation has taken a hit since the controversy began unfolding last month. Craig warned the controversy could undo 25 years of charity work. Several companies already have decided to end their partnerships with WE Charity — including GoodLife Fitness, the Royal Bank of Canada, Loblaw Companies Ltd. and KPMG — while WestJet and DHL are considering their next moves.

"It's devastating to a Canadian charity," Craig told MPs today, adding "there are days that we wish we had never answered the phone" when the federal government called asking WE Charity for a proposal to run the program.

In his opening statement before the House of Commons finance committee, Craig Kielburger said that — despite rumours to the contrary — WE Charity was not in financial trouble when it agreed to take on the student grant program. 

"This program was developed in the midst of a global pandemic, when governments and the private sector were scrambling," he said. "Some have suggested that WE Charity was in dire financial straits prior to the [Canada Student Service Grant] and that somehow motivated our actions. It simply isn't true."

Watch: 'There are days when we just wish we hadn't answered the phone,' says Craig Kielburger

'There are days when we just wish we hadn't answered the phone on April 19'--Craig Kielburger

1 year ago
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Craig and Marc Kielburger appeared before the Commons finance committee Tuesday. 0:38

Ties to the Trudeau family

Critics have suggested that WE Charity was chosen to run the program because of its close ties with the Trudeau family. 

"We were not chosen for this work because of our relationship with politicians. [We] were chosen because we were willing to leverage every part of our 25 years of experience to build this program at the breakneck speed required to have an impact for Canadian youth over the summer," Craig Kielburger told MPs.

He said WE Charity had experience in the area, having previously built two large youth service programs — one in Ontario based on a mandatory 40 hours of community service required of high school students, and a second one in the U.S. that would operate across all 50 states.

Asked if he considers himself to be close to the Trudeau family, Craig said that the relationship between the Trudeaus and his family is strictly business.

"I've never seen the prime minister or Sophie Grégoire Trudeau in a social setting. Neither of us have. We've never had a meal with them. We've never socialized with them, ever," he said.

"It depends what your definition of 'close' is. We have welcomed Sophie Grégoire Trudeau to be the ambassador for our mental health programs and she has been extraordinary in raising awareness. We have welcomed Margaret Trudeau because she is a mental health advocate."

Last month, Trudeau announced that WE Charity — which has close ties to the Trudeau family — would administer the program which would provide eligible students with grants of up to $5,000. The grants are intended to help students cover the cost of post-secondary education in the fall. The amount of the grant depends on how much time students spend doing volunteer work.

Shortly after it was announced that WE Charity would be running the program, the Liberal government came under fire from opposition parties and some in the charitable sector over the Trudeau family's relationship with the charity. 

Trudeau and his mother, Margaret, have appeared at a number of WE Day events, while Trudeau's wife, Sophie Grégoire Trudeau, hosts a podcast for the group called "WE Well-being."

Initially, WE Charity said members of the Trudeau family were not paid for appearing at WE events, although Sophie Grégoire Trudeau had been reimbursed for travel expenses.

But WE Charity confirmed earlier this month that Trudeau's mother Margaret was paid about $250,000 for speaking at 28 events by Me to WE, the charity's for-profit arm, while his brother Alexandre spoke at eight events and received about $32,000.

Watch: Kielburgers questioned about relationship with the Trudeaus:

Kielburgers questioned about relationship with the Trudeaus

1 year ago
1:48
Craig and Marc Kielburger, founders of the WE Charity, spoke to Bloc Quebecois MP Rheal Fortin on the Commons Finance committee Tuesday. 1:48

Craig and Marc Kielburger have since acknowledged that in fact WE Charity did pay some of Margaret Trudeau's fees — about $64,000 worth — but not Alexandre's fees.

Craig Kielburger said Tuesday that during the initial "crush" of media inquiries, the organization said that Trudeau family members had not been paid speaking fees before later acknowledging that there were "errors in billing."

On Tuesday, he said Margaret Trudeau and some other speakers were paid for taking part in "auxiliary" events that stretched over several days.

Under questioning, Marc Kielburger also revealed how much the organization had paid to reimburse the Trudeaus for expenses related to the WE events.

While he said he was not able to cite total amounts, he said Alexandre Trudeau attended eight WE events over a two-year period and was reimbursed an average of $2,447 per event, for a total of $19,576; Margaret attended 28 WE events over five years between 2016 and 2020, including events in the U.K., and was reimbursed an average of $5,998 per event, for a total of $167,944; and Sophie Gregoire Trudeau attended seven WE events over the course of three years and was reimbursed an average of $3,618 per event, for a total of $25,326.

No financial gain, say Kielburgers

Craig Kielburger also told MPs that WE Charity did not stand to gain financially from administering the student volunteer program.

"As per the contribution agreement, WE Charity would only be reimbursed its costs to build and administer the program," he said. "To be clear, there was no financial benefit for the charity. WE Charity would not have received any financial gain from the CSSG program and it is incorrect to say otherwise. The contribution agreement had proper oversight built in, 13 references to audit, and taxpayers were protected."

He said he is "deeply saddened" by the fallout and regrets the hardship it created for staff, WE partners and the communities the organization serves.

"The fallout now from this political process has resulted in serious challenges that risk the entire organization and our 25 years of work," he told the committee.

"We are most sorry, however, for the students of Canada. We know that this pandemic has put so many in dire straits, unsure of whether they will be able to continue their education, or even pay their rent."

Watch: Craig Kielburger defends WE Charity's role in student aid program

Craig Kielburger defends his charity's plan to help students

1 year ago
0:47
Craig and Marc Kielburger, founders of the WE Charity, spoke to MPs on the Commons Finance committee Tuesday. 0:47

Former chair testifies about payments to speakers

Earlier in the day, the former chair of the WE Charity board of directors told MPs on the Commons finance committee this afternoon that the board was told that speakers were not being paid for appearing at WE Day events — even though WE later confirmed that its for-profit arm had paid Prime Minister Justin Trudeau's mother and brother thousands of dollars for speaking at such events.

"The WE Charity board always understood that speakers were not paid by the charity or the related organizations to speak at WE Day. The board made direct inquiries on this issue," said Michelle Douglas, who worked at WE Charity for 15 years.  

Asked about these payments today, Douglas said she didn't "know the precise nature of what they were paid for, but if it was exclusively to speak on the WE Day stage, that would have surprised me."

Douglas said that while she worked at WE for 15 years and still supports WE's mission to engage youth in charity and development work, she came into conflict with the management of the organization when it began laying off hundreds of staff members at the outset of the pandemic. 

Watch: WE Charity's board was told speakers weren't paid for WE Day events, former chair said:

WE Charity's board was told speakers weren't paid for WE Day events, former chair says

1 year ago
1:09
Michelle Douglas said WE Charity's board of directors "always understood that speakers were not paid" to appear at WE Day events and that she would have been "surprised" to learn members of Prime Minister Justin Trudeau's family had been paid thousands of dollars to speak at such events. 1:09

"It was our view that you could not fire hundreds of people without very strong, demonstrable evidence, and even then, should explore mitigation efforts to save jobs. Instead, the executive team were dismissing employees with great speed and in large numbers," she said. 

Douglas said that repeated requests by the board of directors to get financial evidence from management to justify the job cuts went unanswered. 

That inability to access financial information was one of three factors Douglas said prompted her to leave the organization.

She also said she left because the board of directors was being denied access to WE Charity's chief financial officer. Meetings with the CFO were set and then cancelled, she said, making it impossible for the board to determine if the job cuts were financially justified.

Douglas also said that in the midst of the job losses and the surging pandemic, Marc Kielburger travelled twice to Kenya without a satisfactory explanation for his travel.

Douglas said she also was troubled by a 2018 Canadaland report chronicling abuse and bullying in the organization, and by subsequent reports of "concerning allegations."

"So this doesn't feel very good to me in the sense that I'm troubled if somebody didn't have a good employee experience, but I personally never saw anything from Marc that directly concerned me," she said.

Watch: Former chair of WE Charity board explains why she resigned:

Former chair of WE Charity board explains why she resigned

1 year ago
0:54
Michelle Douglas gives three reasons for why she resigned as chair of WE Charity's board of directors in late March after serving in the position for around a decade. 0:54

Asked if she thought WE Charity had the capacity to administer the federal student volunteer program, Douglas said it was "impossible" for her to say because she had resigned months before the contract was awarded.

"Insofar as their ability to deliver on that program, I just don't know," she said.

The contract awarded to WE Charity was arranged as a contribution agreement between WE and the federal government, and not through a competitive process. It has since been dissolved.

Initially, the federal government said WE Charity would get $19.5 million for administering the $900 million program, with $5 million of that going to not-for-profits to help them with administration costs.

It later emerged that WE Charity would get an additional $10.5 million to help smaller not-for-profits participate in the program, and another $13.53 million would have been given to WE to create an additional 20,000 volunteer placements, if necessary — raising the value of the contract to $43.53 million.

WE Charity lost $5 million on deal: Marc Kielburger

Marc Kielburger said the government advanced $30 million to WE, but a decision was made to return the money as soon as the agreement became "political."

"As soon as this program was put into a political nature, we immediately decided that we wouldn't be taking any of those funds. That was a decision that the organization made. We'd be losing approximately $5 million in this process. It was a very difficult and painful decision, but we felt under the circumstances it was the right thing to do," he said.

Marc Kielburger also dismissed media reports suggesting that the WE Charity Foundation was a real estate holding company that would actually be running the student grant program. 

"It was not a real estate holding company. It has never held any real estate," he said adding that the WE Charity Foundation was only used as a means of limiting liability associated with the program.

Craig Kielburger said he was surprised the real estate holdings "exploded" as an issue.

"We were building a series of buildings ... to create a shared space for youth to launch their own social enterprises and run youth led charities," he said. "Somehow that's been attacked in the press, when only a few months ago we were being praised."

Despite WE Charity's ties to the Trudeau family, Douglas said the board of directors viewed the organization as non-partisan.

"It was always our view, at least in the board of directors, that we were indeed non-partisan, which had the potential of engaging any government, provincial, municipal or federal," she said.

Corrections

  • This story has been updated from a previous version that incorrectly referred to the $64,000 paid by WE Charity to Margaret Trudeau as "expenses." In fact, that payment was part of the $250,000 in speaking fees paid to Margaret Trudeau.
    Jul 29, 2020 5:18 PM ET

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