The WE Charity debacle over a $900-million sole-sourced government contract, which was announced, defended, cancelled and led to an ethics inquiry all over the course of one week requires a deep-dive to break down all the extraordinary storylines.
Driving The News: Controversy is stemming from the choice of WE Charity to administer the lucrative Canada Student Service Grant (CSSG) program. This is due to their close ties to the Trudeau family, questions over the contract selection process, and mysteries surrounding WE’s involvement in a 2017 Kenyan bribery scandal.
- The week of negative news coverage culminated on Friday, July 3rd with the government announcing it would no longer work with WE Charity on the CSSG program.
- This was shortly followed by the Federal Ethics Commissioner announcing an investigation over Prime Minister Trudeau’s ties to WE Charity.
Calm Before the Storm
On June 25th, the federal government launched the Canada Student Service Grant (CSSG) program aimed at providing students with cash grants in exchange for hours spent volunteering this summer.
- Students struggling to find summer jobs due to COVID-19 would have the opportunity to earn up to $1000 per 100 hours volunteered.
“So today, we’re launching 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.”Prime Minister Justin Trudeau
Later that evening, it was reported that the WE Charity had been chosen to administer the over $900-million project by helping to link volunteering youth to other charities around the country.
- According to an Employment and Social Development Canada spokesperson, the government would set the funding parameters and desired outcomes for the project.
- However, the recipient would not be acting on the government’s behalf and would have autonomy over how the project was undertaken.
Trudeau Conflict of Interest
Concerns were immediately raised in the media about connections between the Trudeau family and the WE Charity.
- Sophie Grégoire Trudeau is an “ambassador and ally” for the foundation and hosts a podcast in association with WE.
- A profile on WE Stories states that Mrs Trudeau is “more than an ambassador of WE Well-being, she is its mentor, booster and champion.
- Mrs Trudeau states in the profile that her role is as a “lead influencer”.
- The entire Trudeau family have a deep history of volunteering for WE charity with the Prime Minister, his wife Sophie and mother Margaret having made on-stage appearances at numerous WE Charity events.
On June 26th, one week before the partnership would be scrapped, Prime Minister Trudeau defended his government’s decision stating:
“The WE organization is the only organization in Canada that has the scale and the ability to deliver volunteer opportunities for young people right across the country at all levels of organizations.”
The Selection Process
Questions were then asked about the selection process for the sole-sourced CSSG Project which would net WE Charity $19.5 million in fees for its work administrating the project.
- Concern also stemmed from uncertainty regarding oversight on the handling of an exceptionally large $900-million project.
- This was amplified by the fact that no other organizations were approached to handle the project or given the opportunity to bid for it.
“They assessed WE Charity as having the necessary experience, expertise and capacity to deliver the large scale program”Minister of Diversity and Inclusion and Youth, Bardish Chagger
WE Co-Founder Marc Kielburger claimed in a June 12 conference call that the Prime Minister’s Office had directly contacted the Charity to offer them the opportunity to administer the student volunteer program as early as April.
- While the co-founder backtracked on the comments saying he misspoke, it raises the suspicion that the CSSG project was created with WE in mind.
Questionable Past Contracts
WE Charity had previously received multiple federal contracts in the past three years most of which consisted of sole-source contracts.
Sole-source contracts are a form of non-competitive government contracts where no other candidates are considered other than the chosen entity.
- According to Government of Canada Non-Competitive Contracting policy, these contracts can be granted when the need is a pressing emergency and estimated expenditure does not exceed $25,000, $40,000 and $100,000 depending on the applicable regulations.
The lack of competition means that these contracts can be used for nefarious reasons.
“The nudge-nudge, wink-wink of putting out contracts just below the threshold to have them put out to public. And those are the contracts that tend to be given to someone who ran your campaign, someone who was involved with you at the party level.”NDP ethics critic Charlie Angus
Investigative writer Nora Loreto dug into past government contracts to WE Charity and found a disturbing pattern of sole-source patterns over the past 3 years including:
- Three different contracts awarded for slightly less or equal to the $25,000 limit in 2019 alone: $24,996 from the Privy Council in for a workshop, $24,990 from PHAC unspecified studies and analysis, and $25,000 from Heritage Canada for youth projects.
- Multiple large value contracts with little detail such as $887,155 for “innovative outreach” for youth employment strategy and
- Four different contracts for Heritage Canada with little description for $80,000 $25,000 $1-million and $180,000.
Huge Funding Commitment
The size and scope of the contract have also come under fire as Canadians have questioned whether it would be possible to undertake a $900-million contract in such little time.
- The money dedicated to the CSSG represents a huge chunk of the government’s pandemic spending making the lack of oversight on the project even more concerning.
- Others argued that it would be improbable that WE Charity would be able to effectively deploy over 100,000 volunteers for a program expected to run 4 months.
Volunteer recruiting: Further reporting throughout the week found that WE Charity was prepared to offer significant grants of public funds to organizations and individuals willing to help bring in young volunteers for the program.
- $25,000 to Canadian summer camps who could bring in more than 75 volunteers over a few months.
- $12,000 to any teacher who recruited at least 75 student volunteers. More than double the money available to any student volunteer under the CSSG.
Exploitation of students?
- Reporting over premiums offered to teachers and summer camps has reignited criticism over the low pay student would receive for their work.
- Despite the $900-million project, volunteers would be unable to make more than $10/hour for their up to 500 hours of work, considerably less than minimum wage.
Growing skepticism of WE Charity
The week of coverage over the CSSG program has also led to concerning reporting on WE Charity and their past business practices.
- Former member of WE Charity board of directors took to Twitter to state that almost all board members either resigned or were replaced in March 2020.
- A Canadaland investigation unearthed a phone conversation between Marc Kielburger and a senior Kenya employee discussing criminal activity and fraud by the leadership of WE’s Kenyan operation in 2017.
Cancelled Contract & Ethics Inquiry
The week of critical press over the WE Charity and the CSSG program which even included accusations of cronyism by the Globe and Mail ended spectacularly last Friday.
- First, the Liberal Government announced they would end their partnership with WE Charity to distribute the $900-million program with the Prime Minister stating the move was “WE’s decision, which we support”.
- Then, the Ethics Commissioner announced that he would start an investigation into whether Trudeau had broken the Conflict of Interest Act when awarding the single-sourced contract that did not follow the normal contracting process.
The Bottom Line: A scandal with so many layers deserves to be broken down, but now that the contract has been rescinded and an ethics investigation is under way, what are the takeaways from this debacle?
- For Prime Minister Trudeau, this is his third ethics investigation following the Aga Khan and SNC-Lavalin scandal. Questions will be asked about his role in the selection of WE Charity and only time will tell if it will hurt the strong approval ratings which he and the liberals have held throughout the pandemic.
- For WE Charity, the scandal and subsequent bad press likely mean their image will be damaged and future contracts which they receive from the government endure greater scrutiny.
- Advocates for increased oversight over how sole-sourced contracts are allocated by governments are clear winners from this week’s events.
- This has also been a win for the Canadian press which kept up the pressure in its reporting regarding the dubious nature of the sole-sourced contract and existing conflicts of interest.
- Ultimately, a $900-million contract should not have been awarded to a company with close ties to the Prime Minister without an independent application process and intrigue over this scandal will likely grow in coming weeks.
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