‘Not in the public interest’: Liberals won’t try to recoup $34 million paid by ‘green slush fund’ to ineligible projects

OTTAWA — The Liberal government says it will not try to recover any of the at least $34 million in ineligible funding paid out by the so-called “green slush fund,” saying such efforts would not be in the public interest.

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Industry Minister Mélanie Joly quietly made the revelation in a response tabled last week to questions by Conservative MP Luc Berthold on the now defunct Sustainable Development Technology Canada (SDTC).

SDTC was a scandal-plagued cleantech fund derogatively referred to as the “green slush fund” by Conservative MP. It was dissolved in 2024 by then industry minister François-Philippe Champagne after a scathing report by the Auditor General on the organization.

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In the response, Joly said roughly $34 million was paid out by SDTC to ineligible recipients who applied and performed “in good faith.”

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“Therefore, as a matter of fairness and sound stewardship of public funds, it was determined that further pursuit of recoveries was not likely to be successful, and not in the public interest,” reads the document.

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In a statement, Berthold and colleague Aaron Gunn lambasted the decision, which they said flies in the face of the will of MPs of all political stripes. In 2024, the Commons Public Accounts committee unanimously expressed “extreme concern with the blatant disregard of taxpayer funds” called on the government to recoup them.

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In her 2024 report, Auditor General Karen Hogan found that of the 58 SDTC-funded projects she audited, 10 were ineligible for such funding totalling $59 million.

Furthermore, she found 90 cases where an SDTC board member participated and voted in a discussion about a contract despite being in a conflict of interest.

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Hogan also found the organization had serious governance issues.

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“It’s not always clear that funding decisions made on behalf of Canadian taxpayers were appropriate and justified,” she wrote of SDTC.

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At the time, SDTC leadership only partially agreed with some of the key findings in Hogan’s report. It disagreed with some of her findings on funded project eligibility.

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The report not only led to the dissolution of SDTC (whose activities were folded into the National Research Council), it also sparked multiple parliamentary committee studies, a call by Conservatives for an RCMP investigation and a months-long logjam in the House of Commons over access to documents.

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Joly’s response tabled last week sheds new light on what happened to SDTC after Hogan’s report.

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It reveals that SDTC decided to conduct its own review of 158 projects it funded, including those audited by Hogan. The review included “three independent third-parties,” which are not identified.

Despite reviewing three times more projects than Hogan, the foundation concluded that only five (compared to Hogan’s 10) were ineligible for the funding they received.

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Those projects received $34 million in total funding from SDTC since 2017. The document does not identify them and a spokesperson for Innovation, Science and Economic Development Canada declined to do so.

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Joly’s response said the review found the five funding recipients negotiated and performed “in good faith,” suggesting blame for the error lied entirely with SDTC.

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In a statement, ISED spokesperson Alison Reilander explained that a new SDTC board appointed after Hogan’s audit launched an “enhanced process” to re-evaluate funding recipients’ eligibility. She also noted that the auditor general’s office “did not examine the technological merits of the projects.”

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“The enhanced review included a detailed reassessment of all the projects, supported by independent third-party reviewers,” said Reilander.

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“As a result of the enhanced review process, five projects were determined to be ineligible for funding under the terms of SDTC’s contribution agreement with the Crown and one project was found to have been awarded funding to support certain ineligible costs.”

In a separate statement, Hogan’s office declined to comment on the results of SDTC’s eligibility review.

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“To maintain our independence, we do not comment on the government’s policy decisions or provide opinions or assessments on matters beyond the information contained in our published audit reports,” wrote spokesperson Jayita Phulsunge.

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National Post