NEWS RELEASE
July 24, 2024
In an investigation report released today, Conflict of Interest and Ethics Commissioner Konrad von Finckenstein found that Ms. Annette Verschuren failed to comply with some provisions of the Conflict of Interest Act while she was Chairperson of Sustainable Development Technology Canada (SDTC); in particular, she failed to comply with subsection 6(1) (decision-making) and section 21 (duty to recuse) of the Act.
Finding one
After Ms. Verschuren was appointed to SDTC in June 2019, she continued to serve on the boards of the Verschuren Centre for Sustainability in Energy and the Environment, which she founded, and the MaRS Discovery District.
With respect to most funding decisions involving projects nominated by the Verschuren Centre or MaRS, Ms. Verschuren declared a potential conflict to SDTC's Board of Directors, and abstained from voting on the decisions. On four occasions, it appears she did not abstain from decisions that benefitted companies nominated by or associated with the two organizations. While she mostly abstained, she did not recuse herself in any of these cases.
Finding two
Throughout her tenure, Ms. Verschuren remained Chair, CEO, and majority shareholder of NRStor Inc., a company she founded. The Commissioner found that Ms. Verschuren failed to comply with the above-mentioned provisions when she participated in SDTC's March 2020 and March 2021 decisions to give COVID-19 emergency relief payments to all companies, including NRStor, that had previously been approved for funding. While the original payments to NRStor were approved before she became Chairperson of SDTC, on these occasions, following incorrect advice, she did not recuse herself.
Clarification of recusal requirements
Simply abstaining instead of recusing falls short of the Act's requirements. Emergency situations do not make recusal requirements inapplicable. Public office holders must physically remove themselves from the location where the matter that requires recusal is being decided. Or, when the meeting is online, they must be moved to a separate virtual waiting room. This ensures their mere presence cannot influence the decision of others.
Finding three
There was no evidence that Ms. Verschuren failed to comply with section 9 of the Act. The Commissioner found that she did not use her position as Chairperson of SDTC to try to influence other Board members in those two decisions when she moved the motions for the payments. Doing so was simply a formality of her role as Chairperson.
Quotes from Commissioner von Finckenstein
“When a conflict of interest arises, recusal—not abstention—is the proper way to manage it. Instead of abstaining from decisions in which she had private interests, Ms. Verschuren should have recused herself. Recusal means leaving the room when the decision is being made. Her actions fell short of what the Conflict of Interest Act requires."
“It was clear that Ms. Verschuren took what she believed to be the right steps to manage her conflicts of interest. However, she did not meet the Act's requirements."
“Investigation reports such as this are educational tools that can help people who are subject to the Conflict of Interest Act understand how to prevent and manage conflicts of interest."
Additional facts
The Conflict of Interest Act applies to ministers, ministers of state, parliamentary secretaries, the Chief Electoral Officer, the Parliamentary Budget Officer, ministerial staff, ministerial advisers, most people appointed to their positions by the Governor in Council, some ministerial appointees, and any persons designated by the Governor in Council to be subject to the Act. They are referred to as public office holders.
Under subsection 6(1) of the Act, public office holders are not allowed to make a decision or participate in decision-making related to the exercise of an official power, duty or function if they know or reasonably should know that, in doing so, they would be in a conflict of interest.
Under section 21, they must recuse themselves from any discussion, decision, debate or vote on any matter in respect of which they would be in a conflict of interest. A recusal is more than simply abstaining from a vote.
As set out in section 4, public office holders are in a conflict of interest when they exercise an official power, duty or function that provides an opportunity to further their private interests or those of their relatives or friends, or to improperly further another person's private interests.
Under section 9, they are not allowed to use their position as public office holders to seek to influence a decision of another person to further their private interests or those of their relatives or friends, or to improperly further another person's private interests.
While the Act does not provide for any sanctions for contraventions found following an investigation (formally called an examination under the Act), a report is provided to the Prime Minister and released to the public to shed light on the activity examined.
Administrative monetary penalties, which the Commissioner may impose on reporting public office holders who fail to meet certain reporting requirements of the Act, are NOT applicable following an examination.
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