Photo courtesy of the National Research Council of Canada
Dian Cohen
Local Journalism Initiative
In 2001, the federal government created Sustainable Development Technology Canada (SDTC), a foundation specifically to invest in “technologies that will create economic and environmental prosperity for all Canadians.” According to the SDTC website, it “is the single-biggest investor in Canadian sustainability entrepreneurs.” Again, reading from the website, and the 2022-2023 Annual Report, 316 Canadian companies, of which 229 are still active, have been funded to the tune of $1.7 billion taxpayer dollars. (In the interests of transparency, they’re all listed on the website.)
Looks like a reasonable use of taxpayers’ dollars – a 72+ per cent success rate in environmentally and economically attuned companies in every province and every economic sector. The SDTC website says,” Every dollar SDTC has invested since 2001 has resulted in more than seven dollars in follow-on financing from the public and private sectors.”
So it is somewhat surprising to see in tiny print at the bottom of the website the following:
On June 4, 2024 the Government of Canada announced that SDTC will be transitioning to the National Research Council of Canada. The transition process is expected to take several months. In the interim, SDTC will be resuming full business operations. Please check back here for updates.
What prompted this is the Auditor General’s most recent report. According to Report #6, “Overall, we found significant lapses in STDC’s governance and stewardship of public funds… the foundation awarded funding to projects that were ineligible, conflicts of interest existed in some instances, and certain requirements in the Canada Foundation for Sustainable Development Technology Act were not met.”
The Report goes on to say that 10 projects were awarded $59 million even though they did not meet key requirements… we found 90 cases … representing nearly $76 million awarded to projects where the foundation’s conflict-of-interest policies were not followed.”
The enabling legislation requires that SDTC have a member council of 15. The Board of Directors reduced the council to 2. The A-G laid ultimate blame at the doorstep of the Minister of Innovation, to whom SDTC reports. No wonder Minister François-Philippe Champagne shut SDTC down – ‘transitioning’ the remaining money and all the employees (ex the executives that resigned) to the National Research Council.
Does the National Research Council have an exemplary record for doing its job? Not so much. It has been audited by the A-G three times, in 2004, 2007 and 2016. In 2004, NRC’s governance, management of projects, management of personnel, performance measurement and reporting were inadequate. In 2007, the A-G saw improvement but was still unhappy that half the seats on the member council were vacant. The 2016 audit was specifically focussed on mitigating the effects of severe weather. “Overall, we found that the federal government had not done enough to help mitigate the anticipated impacts of severe weather events… National Research Council Canada did not incorporate climate change trends into National Building Code updates, which could impact buildings and structures for decades to come. Although federal information and tools largely met departmental mandates, they did not fully meet decision makers’ needs…”
In a related story, the Public Policy Forum newsletter reminds us that at the height of the COVID-19 pandemic, Prime Minister Justin Trudeau made a $130 million dollar funding commitment to build a vaccine plant in Montreal to churn out Canadian-made Novavax COVID-19 shots by the end of 2020.
The National Research Council partnered with a private entity to set up Biologics Manufacturing Centre (BMC) Inc. as a not-for-profit corporation. BMC was completed on NRC land in June 2021 and certified by Health Canada as compliant with its regulations in July 2022. As of today, not a single vaccine has been produced at the facility. Meanwhile, the global demand for COVID-19 vaccines is plummeting. Even more worrying for Canada’s taxpayer investment is that Novavax is far and away the least desired of the vaccines available. Taxpayers are still funding the NRC for $17 million every year to keep the plant operational with about 100 staff on site. Novavax is still expected to use the plant, but the firm has already delayed that start three times.
Minister Champagne is counting on the NRC to do better than the SDTC. In a press release he said, “As a Government of Canada organization, the NRC is subject to rigorous and stringent oversight of its personnel and finances. This structure will help rebuild public trust while increasing accountability, transparency and integrity.”
Maybe the auditor general will get to it soon and let us know.
Meanwhile, the PM followed Ontario Premier Doug Ford in directing lots of other taxpayer funds: he handed Sanofi $50 million to help with its new vaccine manufacturing facility in Toronto and the PM handed them $20 million. It’s the largest biomanufacturing facility in Canadian history (at 200,000 square feet). It will employ 200 people and is intended to produce vaccines for whooping cough, tetanus and diphtheria for domestic and international use. Sanofi is building a second new facility in Toronto to increase production of a flu vaccine specifically formulated for people 65 years and older. It’s now scheduled to open in 2027 (a year later than originally planned when it was announced in 2021.)
Interestingly, last month Novavax and Sanofi announced an exclusive licensing agreement to commercialize COVID-19 vaccine and develop novel COVID-19-influenza combination vaccines. There’s no mention in the press release that any of these will be produced in Canada.