Controversy over grants program may destroy WE, Kielburger brothers tell parliamentary committee

OTTAWA – The Kielburger brothers say the WE organization they built up “like a small little house” as teenagers is facing financial ruin because of controversy over a federal government student volunteer program.

During a combative and occasionally chaotic four-hour hearing before the federal finance committee, Marc and Craig Kielburger blamed “misrepresentations” by the media, critics and politicians for the controversy in which they’ve been embroiled for the past month.

“This has been something that may destroy 25 years of work to build a national charity in this country, partially because of mistakes that we made, we acknowledge and we apologize. But frankly, significantly because of inaccurate and false information is circulated to the advantage of various groups,” Craig Kielburger told parliamentarians.

Both brothers faced wide-ranging questions from Liberal and opposition MPs regarding their ties with the Trudeau government, WE’s “labyrinth” corporate structure and how they managed to win a deal with the federal government to manage a student volunteer grant program worth up to $912 million.

Over the past month, the ethics commissioner announced he is investigating both Prime Minister Justin Trudeau and Finance Minister Bill Morneau for their involvement in the decision to outsource the Canada Student Service Grant (CSSG) to WE Charity Foundation.

Both men and their families have close ties to WE. The Toronto-based organization has paid for speeches by Trudeau’s wife, mother and brother in the last decade, whereas one of Morneau’s daughters currently works for the organization.

Morneau also admitted to reimbursing $41,000 last week in unpaid travel expenses to WE for sponsored travel back in 2017.

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In response to questions by Conservative MPs, the Kielburgers stated that they had no record of payments to the prime minister’s mother, Margaret Trudeau, before November 2015, that is when Justin Trudeau was elected to this country’s highest office.

“Our needs continued to grow and we needed somebody to speak on the issue of mental health. Madame Trudeau came as somebody who’s very focused on that issue,” Marc Kielburger responded to Conservative MP Michael Barrett.

From their opening statements, it was clear the Kielburgers were in crisis management mode and that they consider themselves and WE as collateral damage of a political scandal. They also denied any link between the CSSG deal and ties between Liberal politicians and WE.

“The fall-out now from this political process has resulted in serious challenges that risk the entire organization and 25-years of work,” Craig Kielburger mentioned in his opening remarks. He later referred to WE as a “small little house” his brother Marc and him started building up at ages 17 and 12 respectively.

“We would have never picked up the phone when the civil service called, asking us to help young Canadians get through the pandemic, if we had known the consequences,” he later added, emphasizing the point he would repeat many times later that it was the federal government — not WE — that made the first contact regarding the CSSG.

Tempers began flaring when NDP MPs began aggressively questioning the Kielburgers about WE’s corporate structure, including the fact that the CSSG agreement was officially signed with WE Charity Foundation, which has no assets.

“So you chose the shell company structure” to run the deal, said MP Peter Julian.

“It is not a shell company. I just want to stress again this is an inaccurate statement. The foundation is a registered charity. And so, characterizing it as a shell company is factually incorrect,” Marc Kielburger responded.

The Kielburgers did admit that WE’s corporate structure was unnecessarily complex, but blamed Canada Revenue Agency rules for forcing them to create a for-profit enterprise (ME to WE) that works parallel to WE Charity.

The Kielburgers also regularly insisted that WE “would have made no profit” from the contribution agreement with the government because the money would have only served to cover expenses.

“We did this to be of service to the government, not for the government to help us and it is incredibly unfortunate the fallout that has occurred,” Craig Kielburger said.

That claim was met with incredulity by opposition MPs, who argued that profit wasn’t necessary for an organization to still be advantaged by a deal that would allow them to hire new staff at the government’s expense, for example.

Tensions ran highest between the Kielburgers and both Conservative and NPD committee members towards the end of the four-hour meeting.

That was particularly apparent when Conservative MP Pierre Poilievre asked if WE had ever hired investigators to snoop into two CANADALAND reporters’ lives, and then said the Kielburgers could be found in contempt if they refused to answer.

“We’ve been here for four hours and now you’re threatening us. We feel that this is not appropriate,” responded Marc Kielburger all the while referring to lawyer letters that had been posted to Twitter.

• Email: cnardi@postmedia.com | Twitter: ChrisGNardi