CEO of Federal Green Fund Mired in Conflict of Interest Allegations Resigns

Minister of Innovation, Science and Industry, Francois-Philippe Champagne rises during Question Period in the House of Commons on Parliament Hill in Ottawa, on Sept. 21, 2023. The Canadian Press/Patrick Doyle

The head of a federal green fund has resigned citing a “malicious campaign” against her, two days after defending her steering of the embattled entity before MPs.

Leah Lawrence told the board of Sustainable Development Technologies Canada (STDC) she was stepping down as president and CEO, according to her resignation letter reported on by CBC News on Nov. 10.

“Given recent media reports, House of Commons committee testimony, and the surrounding controversy, it is clear there has been a sustained and malicious campaign to undermine my leadership,” she reportedly wrote.

“This compromises my future ability to lead the organization and puts me in an untenable situation. And I want to see this organization succeed.”

Ms. Lawrence told the House of Commons ethics committee on Nov. 8 that ethical rules had always been followed at SDTC under her management.

The committee is conducting a review of SDTC, an arms-length federal not-for-profit agency funding green technologies after the government announced in October it was blocking the funding of new projects amid conflict of interest and mismanagement allegations.

Allegations leveled by whistleblowers in early 2023 resulted in two external reviews by third-party firms. A first one conducted by law firm Osler and commissioned by SDTC reportedly found the allegations were not substantiated.

A second review by Raymon Chabot Grant Thornton ordered by Innovation, Science and Economic Development Canada (ISED), which oversees SDTC, found that conflict of interest rules had not been “consistently followed.”

Ms. Lawrence told the committee she had not recused herself when SDTC was discussing funding for a project involving a friend of hers.

She said the project review committee had determined it was not necessary because the individual was a subcontractor. “Because I have no voting role on the project review committee... I could stay in the room for the conversation.”

SDTC announced a $5 million investment in agriculture not-for-profit ALUS in May 2022. Ms. Lawrence’s friend Aldyen Donnelly works for ALUS.

STDC board chair Annette Verschuren also testified alongside Ms. Lawrence and she said legal advice from an Osler partner was behind the decision to not recuse herself from a decision to provide COVID relief payments to her own company.

Ms. Verschuren is the CEO of NRStor, which received payments of $106,000 in 2020 and $111,000 in 2021 from STDC.

Federal Response

Along with pausing the funding of new projects, ISED has provided SDTC with a management response and action plan.

But Innovation Minister François-Philippe Champagne has stopped short of taking action against the foundation’s leadership. Mr. Champagne said he would “apply due process” and “work on the basis of evidence” when pressed by Conservatives on why he has not fired anyone.

Tory leader Pierre Poilievre directed that question at Prime Minister Justin Trudeau last week.

“The scandal surrounding the prime minister’s $1-billion green fund is only getting worse,” said Mr. Poilievre in the House of Commons on Nov. 9. “Not only did whistle-blowers compare this fund to the sponsorship scandal, but the chair of the fund also directed $200,000 in taxpayers’ money to her own company. Why did the Prime Minister not fire that chair?”

Mr. Champagne responded that he would add some “facts” to Mr. Poilievre’s “fairy tale.”

“From the moment I learned about an allegation of wrongdoing, I demanded a third-party investigation,” he said. “After receiving the report, we demanded that there be corrective action at the management level and at the board level.”

SDTC reported in its latest annual report that it approved $196.4 million in funding during fiscal year 2022–2023 and disbursed $133.2 million to funded projects. It says its portfolio is worth $5.97 billion, with $1.71 billion coming from SDTC funding to projects and $4.26 billion from public and private sector investment.

The Office of the Auditor General is currently undertaking a review of how SDTC funds green projects.