Government 'dropped the ball' on WE Charity deal, Qualtrough says

Employment Minister Carla Qualtroughconceded the government "dropped the ball" on its student volunteer grant program, and said she makes "no excuse or justification" for Prime Minister Justin Trudeau and Finance Minister Bill Morneau's roles in the resulting WE Charity controversy.

Speaking at the House of Commons ethics committee Tuesday, Qualtrough said that, in the rush to help Canadians in a time of crisis, the government hurried programs with the understanding some mistakes would be made. She said she hopes the controversy engulfing the Liberal government won't distract from the good work done to support Canadians.

"It was a pandemic and things were crazy and we were going at break-neck speed. But we should have not dropped the ball on this," she said.

The committee is probing the details ofthe government's deal with WE to administer a $900-millionCanada student service grant program. Both Trudeau and Morneaufailed to recuse themselves from cabinet discussions on the WE agreement despite family ties to the organization, raising questions about potential conflict of interest.

"It's an unfortunate situation," Qualtrough said. "I don't think in any way it takes away from the other really important, and I would say, fantastic work that we've done for students and for Canadians writ large. But they should have recused themselves and they've apologized for not doing so, andI accept that apology and believe we've learned from this."

Qualtrough said the government was operating under the guiding principle of delivering supports "quickly and reliably" for Canadians.

WATCH | 'We should have not dropped the ball,'Qualtrough says:

'We should have not dropped the ball': Qualtrough

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Duration 1:05

Employment Minister Carla Qualtrough conceded the government "dropped the ball" on its student volunteer grant program, and said she offers "no excuse or justification" for Prime Minister Justin Trudeau and Finance Minister Bill Morneau's roles in the resulting WE Charity controversy.

"We knew from the start things would not be perfect, and we were prepared to have to course correct when we needed. There was no time to test or pilot the programs. We had to understand the limits of our existing system and work with them," she said.

Earlier in the day, Canada's top bureaucrat told the committee the agreement with WE Charity was "typical" and would have gone through the routine checks and balances.

Clerk of the Privy Council Ian Shugartsaid officials with Employment and Social Development Canada were in charge of the file, and that he saw no red flags that warranted giving special advice to Trudeau.

"All I can say is that the contribution agreement in this case was typical of relationships between [a] governmentdepartment and an entity, guided by principles of audit and due diligence with respect to interests of theCrown," he said. "This contribution agreement will bear scrutiny as typical of the mechanisms that have been approved by the Treasury Board and have been used in the government for a very, very long time."

Trudeau and his governmenthave been under fire for awarding WE Charity the deal to manage the program despite ties between the charity and members of Trudeau's family. WE Charity subsequently withdrew from the agreement due to controversy.

Trudeauhas maintained that despite the fact his wife, mother and brother had receivedpayments from WE, he did not place himself in a conflict of interest by taking part in cabinet talks around the program. He did, however, apologize for failing to recuse himself from those discussions.

WE Charity was selected torun the program and did not go through a competitive bidding process. Trudeau has maintained that senior government officials said the charity was the only organization able to deliver the program.

He has said he was surprised to see the agreement on the cabinet agenda on May 8, and that he asked for more due diligence to ensure WE was the best organization to deliver the program.

Shugart said he was "generally aware" that there was a desire for due diligence by the prime minister and his chief of staff, Katie Telford, but left that work to the officials handling the program.

"I was not personally involved in that due diligence. My opinion was not sought and I did not see anything at the time that required my giving the prime ministerspecific advice," he said.

"The followup to his request was being undertaken by officials, and it did not occur to me at the time, or indeed in retrospect as I've thought about this, there was anything in that circumstance that called for more than the followup that was being done by the officials."

Since the controversy erupted, issues around WE's financial situation and governance have been brought in to the spotlight.

Due diligence 'sufficient'

Shugart said he believed the due diligence was sufficient, but conceded that closer scrutiny could have been done and that lessons have been learned.

"I think knowing in retrospect what we know now, we probably would have inquired further. But I must also say that even looking back now, I have no evidence that the WE organization, had the program gone ahead, would not be able to deliver the program as set out in contribution agreement," he said.

The program, which never got off the ground,was designed to give students who couldn't find summer jobs a chance to earn a stipend for volunteer work in "national service" activities related to fighting the pandemic.

Chagger, who signed the agreement with WE, said there are always safeguards in place to ensure the integrity of such programs.

Clarifying her earlier statement that she had not had any conversations with WE about the student volunteer program, Chagger said she spoke at a WE Day event, and also spoke with WE Charity co-founder Craig Kielburger on April 17. She said the conversation focused on a separate youth entrepreneur initiative, which Kielburger was proposing, not the student volunteer program.

WATCH |Chagger pressed on WE contract:

Minister pressed on WE contact

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Duration 5:46

NDP MP Charlie Angus and Conservative MP Pierre Poilievre press Diversity, Inclusion and Youth Minister Bardish Chagger on details about her contacts with WE Charity ahead of the announcement of the COVID-19 student volunteering program on April 22.

Opposition MPs have asked whyChaggerdidn't report what could be considered a lobbying effort by Kielburger.

She told the committee on Tuesday it was not her responsibility to determine if someone has registered as a lobbyist.

"It is the responsibility of lobbyists to report their lobbying activities," she said.

She said she did not intend to pursue the"unsolicited" proposal for theentrepreneurship program.

Trudeau announced the broad strokes of the plan for the student volunteer program on April 22, and Chagger said she was not advised of that announcement ahead of time.

The minister repeated her assertion that it was the public service that advised the government that WE was the only organization that could run the program to the scale, scope and timeline required.

Morneau embroiled in controversy

Morneau is also facing criticism for not recusing himself from those cabinet talks because his daughter, Grace, works at WE in the travel department. His other daughter, Clare, has spoken at WE Day events.

Morneau revealed to the House of Commons finance committee on July 22 that WE Charity covered $41,000 in costs for him and his family in 2017 for trips to Ecuador and Kenya to view the organization's humanitarian work.

At the time, Morneausaid he didn't realize he hadn't personally repaid WE for the trips, and that he repaid the costs that morning.

Ethics Commissioner Mario Dion is carrying out investigations on Trudeau and Morneau's actions.

His predecessor Mary Dawson also appeared as a committee witness on Tuesday, offering her expertise on the Conflict of Interest Act. She said while she is not in favour of the commissioner's office meting out hefty penalties for violations, she said there is an inherent understanding that public office holders will comply.

She pointed to section 19 of the act, which states compliance with it is "a condition of a person's appointment or employment as a public office holder."

"Ultimately there will probably be some effects of having contravened the act, whoever you are and whenever it occurs," she said.

During a news conference before the committee hearings, Conservative Leader Andrew Scheer said his MPs will continue to press for answers in the "scandal." He said the Liberal government is not being accountable for the controversy.

"We know that the prime minister isn't going to take responsibility, he never does. No member of cabinet or the prime minister's inner circle has been fired," he said."Infact the Liberals seem to be desperately trying to pretend that there's nothing to see here. But no one is buying Justin Trudeau's latest excuses."