Ottawa is betting a public-service veteran and former academic can put its scandal-plagued green-technology funding agency back on track as it enters a new era of tighter government control.
This week, Industry Minister François-Philippe Champagne announced that Sustainable Development Technology Canada will cease to be a standalone foundation with its own board of directors. Instead, he is placing it under the umbrella of the National Research Council.
SDTC’s move into the bureaucracy coincides with a damning report by the Auditor-General, who detailed a series of conflict-of-interest breaches and ineligible funding over a six-year period. The report backed several allegations by whistleblowers made more than a year ago.
The minister named Paul Boothe as chair of a three-person board that will be in charge of the transition, aimed at restoring public trust in an organization seen as central to the country’s competitiveness in the fast-expanding climate-tech industry. Mr. Boothe is an economist and retired business school professor, as well as a veteran of several senior public service roles and high-profile negotiations.
For the cleantech sector, avoiding new bureaucratic barriers and funding delays is crucial, with many small companies in desperate financial straits after an eight-month suspension of SDTC funding.
Mr. Boothe’s curriculum vitae shows his experience in navigating difficult files, as associate deputy minister and deputy minister in the federal Finance, Industry and Environment departments. At Industry Canada, he was one of Ottawa’s lead negotiators for the auto industry bailout during the financial crisis.
Christopher Ragan, director of the Max Bell School of Public Policy at McGill University in Montreal, praised the appointment. The two men served together on the Ecofiscal Commission, which advocated for environmentally focused economic policy.
“If SDTC has governance problems, and it’s actively running programs that are basically about providing finance to cleantech, and you’re looking for a way to transition this into NRC, he strikes me as a guy who understands the economic issues of the programs and understands the complications of the machinery of government,” Prof. Ragan said.
After leaving government, Mr. Boothe was a professor and faculty director at the Ivey Business School at Western University.
In 2016, the Alberta government closed its arm’s-length environmental monitoring agency and brought the operations under provincial control after Mr. Boothe delivered a report that concluded it was “a failed experiment in outsourcing a core responsibility of government to an arm’s-length body.”
He declined to be interviewed for this story.
Under Innovation, Science and Economic Development Canada’s plan for SDTC, Mr. Boothe and the other new directors, Cassie Doyle and Marta Morgan – also former senior public servants – have signed on for one-year terms. SDTC and another NRC unit, the Industrial Research Assistance Program, will be brought together under the banner of a new Canada Innovation Corp. when it is formed in the next two or three years, the government said, adding that the employees would “be transitioned seamlessly.”
On Tuesday, Auditor-General Karen Hogan issued a report that concluded SDTC had failed to follow conflict-of-interest policies as it awarded tens of millions of dollars to companies with ties to its own directors and managers. In addition, it funded numerous projects that did not meet the criteria in the contribution agreement that governs how it distributes public money or deliver the promised reductions in carbon emissions, she reported.
The federal Conservative Party said Thursday that it wants the RCMP to investigate the situation.
Last year, SDTC’s chief executive, Leah Lawrence, and chair, Annette Verschuren, resigned after an investigation ordered by Mr. Champagne’s department made similar findings, though they said they believed those findings contained numerous errors and misrepresentations.
In an interview this week, Ms. Hogan said restructuring the way SDTC is directed is a positive development, given the previous governance missteps and the organization’s important role in Canada’s response to climate change.
“I think the public service will just bring better transparency than it would have been by having it in a foundation, which is even further removed from the public service than a Crown corporation,” she said.
The early stage cleantech sector was left reeling when Mr. Champagne imposed the freeze on SDTC grants for new projects in October. The minister said Tuesday he was lifting the suspension.
The key will be resuming evaluations and approvals for projects without imposing new bureaucratic hurdles on entrepreneurs, said Peter McArthur, a director of the Canada Cleantech Alliance. The group surveyed its members and came up with a rough estimate of $400-million in opportunity cost as a result of the suspension, some of it in the form of lost investment, he said.
“We understand this review had to be done. We understand they needed to get the auditor’s report. But they just need to act very quickly now to get funding going that was previously approved and taking on new intake,” Mr. McArthur said. “This transition to NRC can’t be a reason for further delay.”
Jeffrey Jones