Probe of student program turns to Kielburgers

The co-founders of WE Charity argued before a House of Commons committee that the organization wasn't plucked to run a student-volunteer program because of any close ties to Prime Minister Justin Trudeau, laying out details about how much the endeavour would likely cost and why the charity used a seemingly complicated structure to manage it all.

Brothers Craig and Marc Kielburger opened four hours of testimony by saying they regret not realizing how the deal to have WE run the Canada Student Service Grant would be perceived given Trudeau's ties to the group.

They testified side-by-side before a webcam in a wood-panelled room, faces unnaturally white thanks to the camera's colour balance, peppered by questions from committee members scattered across the country.

The brothers said WE would have never agreed to take part in a federal student-volunteer program had they known it could jeopardize the work the organization has done over 25 years.

The duo were highly sought by opposition parties as part of a parliamentary probe into a volunteer program budgeted at $912 million, but which federal officials believed would cost $543 million — and that WE believed would actually cost far less.

WE Charity backed out of administering the program in early July amid a controversy over the Liberal government's decision to award the organization a sole-sourced contract.

Trudeau and his top aide, chief of staff Katie Telford, are to testify Thursday about the program and the deal with WE.

The Kielburgers said they haven't spoken with Trudeau or the Prime Minister's Office about the program.

The federal ethics commissioner has launched probes of Trudeau and Finance Minister Bill Morneau over their involvement in cabinet decisions on the project.

WE said it has paid Trudeau's family members speaking fees mounting to some $300,000.

"The image that you're giving here is that you're getting influence by the kind of power that you have so when you call, man, they call you," said New Democrat Charlie Angus.

Compounding problems for the finance minister was his admission last week that he had just repaid the organization more than $41,000 in travel expenses for WE-sponsored trips he and his family took three years ago.

Craig Kielburger said he spoke with Morneau in late April but the student grant program didn't come up — echoing Morneau's testimony last week. What did come up was a separate proposal WE submitted to Small Business Minister Mary Ng, Morneau and Youth Minister Bardish Chagger to help up to 8,000 youth open small businesses at a cost between $6 million and $14 million.

He said WE was less interested in the volunteer program and was "trying to advance our own proposal."

Opposition MPs have raised multiple questions about the due diligence conducted on the organization, arguing that testimony to date suggests the group had the inside track on the contract to run the program.

Liberal MPs on the committee repeatedly asked about WE's involvement with politicians of other political stripes, and funding from the previous Conservative government.

The volunteer program is supposed to provide grants of $1,000 for every 100 hours of volunteering, up to a maximum of $5,000 as part of a government aid program to help defray the cost of school in the fall.

WE was to administer the program and connect young people with service opportunities through an online platform that would have also paid WE a fee worth $43.5 million if the program reached its maximum potential.

The Kielburgers say there was no financial benefit for the charity.

"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 midway through the appearance.

A copy of the agreement filed with the committee this week noted that the federal government only planned to spend $500 million in grants, even though the Liberals touted the program as having a $912-million budget.

A spokesperson for Employment and Social Development Canada, the federal department overseeing the program, says the $543 million was what officials estimated it would cost to administer and pay grants to up to 100,000 eligible students or recent graduates — "the expected uptake of the program."

"If demand exceeded the number of grants funded in original (agreement), additional funding would have still been available for the program," spokesman Michael O'Shaughnessy said.

During testimony, Marc Kielburger said WE expected few students to actually reach the maximum grant level, with the majority volunteering between 100 and 300 hours.

He said WE estimated the true cost of the program to be between $200 million and $300 million — or roughly one-third of what the government said when Trudeau announced the program.

WE was paid its first fees of $19.5 million on June 30 — seven days after one of its arms, WE Charity Foundation, signed the federal deal on June 23.

Former board chair Michelle Douglas said the foundation didn't appear to have a purpose outside of holding real estate, nor did the board receive a satisfactory explanation for its existence. She added that she wasn't aware of it operating during her time on the board.

Marc Kielburger said the organization used the foundation as a vehicle to oversee the program on the advice of experts to limit the liability to WE Charity, since the government expected the group to assume full liability for all youth volunteers and partner non-profits.

He said ESDC was aware of how WE planned to use its various structures.

On July 3, the organization backed out of the agreement. It has promised to repay every dollar it received, about $30 million, but was still sorting that out details.

At the time, WE said a structure was largely in place for the federal public service to manage. In their opening statement, the brothers say there had been 35,000 applications and 24,000 placements. They say WE handed everything to the public service "hoping to save the program."

However, problems have emerged with what WE put in place and the government has yet to announce a timeline to let students access the program.