Ethics Breach and Organizational Overhaul: Annette Verschuren and the SDTC Controversy

Annette Verschuren, formerly the chair of Sustainable Development Technology Canada (SDTC), resigned from her position amidst a cloud of controversy last year following revelations of ethics breaches. The ethics commissioner, Konrad von Finckenstein, recently concluded his investigation into her conduct, revealing that Verschuren had improperly advanced the interests of companies with which she had affiliations. This breach occurred due to her failure to recuse herself from funding decisions, as required by the Conflict of Interest Act.

SDTC, often criticized by Conservative critics as a “green slush fund,” was originally established by the Canadian government in 2001 as an arm’s-length foundation aimed at providing financial support to companies pioneering new green technologies. Verschuren’s resignation came after allegations surfaced regarding her involvement in funding decisions that may have favored businesses connected to her personal ventures.

Von Finckenstein’s report, released recently, highlighted multiple instances where Verschuren did not adhere to conflict of interest protocols. While he dismissed claims that she actively influenced other board members, he found that she had failed to consistently declare conflicts or abstain from voting when required. The commissioner emphasized that recusal, rather than mere abstention, was necessary to manage conflicts effectively under the law.

The investigation scrutinized various funding decisions made during Verschuren’s tenure, including one-time contributions ranging from $50,000 to $100,000 to companies associated with the Verschuren Centre for Sustainability in Energy and the Environment, which she founded. Additionally, scrutiny fell on COVID-19 emergency relief funding allocated to NRStor Inc., a company where she held significant roles as chair, CEO, and majority shareholder.

Despite acknowledging the extraordinary circumstances of the pandemic, von Finckenstein criticized the SDTC board’s failure to follow standard procedures for reviewing and approving funding applications, which would have facilitated proper recusal of directors with conflicts of interest. The commissioner noted that this organizational shortfall, coupled with incorrect legal advice, contributed to Verschuren’s deviations from established conflict management practices and subsequent violations of the Conflict of Interest Act.

In response to these findings, Innovation Minister François-Philippe Champagne announced in June plans to dissolve SDTC and transfer its funding responsibilities to the National Research Council over the coming year. This decision followed a scathing report from the auditor-general, which identified serious governance deficiencies within SDTC and highlighted numerous instances where funded projects were deemed ineligible.

Michael Barrett, the Conservative ethics critic who instigated the investigation into Verschuren and also raised concerns about another SDTC director, Guy Ouimet, characterized the situation as emblematic of widespread mismanagement within what critics dubbed the “Trudeau government’s billion-dollar green slush fund.”

Verschuren’s career spans leadership roles at Michaels Canada and Home Depot Canada before venturing into green technology with NRStor Inc. Her involvement with SDTC began in 2019, during which she concurrently served on the boards of the Verschuren Centre and MaRS Discovery District, both organizations supporting emerging businesses through investments and other forms of support.

The ethics commissioner’s findings mark the culmination of months of scrutiny, including committee hearings and external investigations, into allegations of misconduct and operational lapses at SDTC. While the report primarily faults Verschuren for her ethical lapses, it also underscores systemic deficiencies within the organization that contributed to the breakdown of proper governance and adherence to legal requirements.

Moving forward, the dissolution of SDTC and the transfer of its responsibilities to the National Research Council signify a significant overhaul in Canada’s approach to funding green technology initiatives. Critics hope this restructuring will address longstanding concerns about transparency, accountability, and the effective stewardship of public funds earmarked for advancing sustainable innovations in Canada’s economy.