The demise of WE’s Canadian operations won’t take the heat off Prime Minister Justin Trudeau over his government’s decision to hire the charity to run a now-defunct student volunteer program.
NDP MP Charlie Angus says WE’s announcement Wednesday that it is shuttering its Canadian operations only underscores the lack of due diligence done by the government before handing administration of the program over to an organization that was evidently in financial distress.
Two months before the government gave the contract to WE in late June, Angus notes that the organization had laid off hundreds of staff and replaced almost its entire board of directors, which had been denied access to the charity’s financial reports.
Angus says WE was “desperate” and cashed in on its connections to Trudeau, his family and his former finance minister, Bill Morneau, in order to persuade them to pay the organization to run the student service grant program.
Trudeau himself has been a featured speaker at half a dozen WE events and his wife, mother and brother have been paid hundreds of thousands of dollars over the years in expenses and speaking fees.
Trudeau and Morneau have apologized for not recusing themselves from the decision to pay WE up to $43.5 million to administer the program and are both under investigation by the federal ethics watchdog for possible breaches of the Conflict of Interest Act.
“WE shutting down doesn’t make the Liberals’ scandal go away,” said Angus.
The government insists it was bureaucrats who recommended that WE was the only organization capable of administering the massive national program. However, thousands of documents released by the government suggest public servants may have been nudged to look at WE by their political masters.
Two House of Commons committees were in the midst of investigating the deal and another two committees were preparing to launch separate investigations when Trudeau prorogued Parliament last month, putting an end to the committees’ work.
However, the WE affair is likely to continue dogging the government when Parliament reopens on Sept. 23 with the demise of the organization’s Canadian operations only adding fuel to the fire.
Conservative Leader Erin O’Toole said Wednesday that WE must hand over all the documents requested by the finance committee about the student service grant program.
The program was supposed to cover up to $5,000 in education costs for students who volunteered during the COVID-19 pandemic. The government initially pegged the cost of the program at $912 million but the sole-source deal with WE put the cost at $543 million.
The deal stipulated that WE was not to make money on the program. The charity has repaid the full $30 million the government gave it to launch the program and has said it will not seek reimbursement for some $5 million in expenses incurred before WE withdrew from the deal in early July amid political controversy.
The organization had already been struggling due to the pandemic-related shutdown but the questions about the student volunteer program prompted many of its corporate sponsors to cut their ties with the charity.
WE said Wednesday it plans to lay off 115 Canadian staff and sell all its property in Canada in the coming months, including its landmark $15-million Global Learning Centre in downtown Toronto, which opened in 2017.
It follows news last month that WE would be laying off dozens of employees in Canada and the United Kingdom.
The net profits will be put in an endowment fund that will be overseen by a new board of governors and used to complete several projects in communities in Latin America, Asia and Africa that were started by WE but remain unfinished.
The fund will also cover the operating costs of several large-scale infrastructure projects, such as a hospital and college in Kenya and an agricultural centre in Ecuador. However, no new projects or programs will be launched.
All future WE Day events are also being cancelled. The organization says it will no longer have staff to work with teachers, though existing resources will be digitized and available online. WE says it was active in 7,000 schools across Canada.
Shutting down its Canadian operations “shows just how much trouble WE was in and how badly they needed this bailout from their Liberal friends,” Angus said.
“They’ve have been in economic freefall for months. This was a group that fired its board of directors for asking too many questions about its finances. The question is why didn’t the government see this before handing them over a contract worth millions?”