WE Charity grant agreement planned to spend roughly half of promised amount: documents

Despite pledges that a controversial federal student grant program run by the WE Charity Foundation would hand out nearly a billion dollars to Canadian youth for volunteer work, the terms of the agreement only laid out plans to spend roughly half of that.

Documents filed with the House of Commons finance committee on Monday reveal the wording of the contentious sole-sourced agreement for the first time but do not explain the apparent discrepancy between what the public was told would be spent and what pledges the deal actually laid out.

The funding agreement between the Canadian government and the WE Charity Foundation says Ottawa would commit a “total maximum amount” of up to $543.5 million.

Of that, $500 million was set to go to students, while the WE Charity Foundation would get $43.5 million for administering the program, which has now been cancelled amid backlash over concerns about conflicts of interest.

Prime Minister Justin Trudeau’s family members have received hundreds of thousands of dollars in speaking fees from the WE Charity, while Finance Minister Bill Morneau’s two daughters both have ties to the organization, one as a speaker and one as an employee.

Neither Trudeau nor Morneau recused themselves from cabinet discussions on the deal.

Both have said that was a mistake and are under investigation by the ethics commissioner.

READ MORE: Morneau says he’s made ‘significant’ WE Charity donations, just repaid $41K for trips

According to the documents, the $500 million amount earmarked for students was to be broken up across three cohorts of student volunteers, with the first cohort getting up to a maximum of $100 million in volunteer grants — depending on their hours worked and their eligibility.

The other cohorts, which were not guaranteed to take place, would receive a further maximum of $100 million and $300 million each.

The WE Charity Foundation, a real estate holding arm of the controversial WE Charity, would receive tens of millions of dollars in exchange for administering the program

The government paid out the first installment — $19.5 million — when the agreement was signed, according to notes on the wording of the agreement provided by the WE Charity to media.

Those notations on the original document state another payment worth $10.5 million for administering one of the secondary cohorts was also paid out on signing, and that WE Charity will return that money.

“This payment was made by the government to WE on June 30. It has not been drawn upon, and funds will be repaid by WE in full,” the notations made by WE Charity officials state.

“The details of repayment are presently being worked out with the government.”

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The notations made by WE Charity officials state as well that while the organization has incurred expenses since signing the agreement that it is eligible to claim federal reimbursement for under the terms of the agreement’s termination clause, it will not do so.

“WE has the right on termination without cause to claim reimbursement for all eligible expenditures incurred up to the date of termination,” the notations said.

“Notwithstanding this right, WE has advised of its intention to waive reimbursement of its eligible expenditures to date.”

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Conservative ethics critic Michael Barrett questioned the discrepancy between the promised amount and what was actually laid out in the terms of the agreement, and said the detail is one more example fuelling fears that due diligence was not carried out on the project.

“This entire scandal reeks of corruption at the highest levels of government. Conservatives will not rest until we get the answers Canadians deserve,” he said in a statement.

The release of the documents comes hours before the finance committee is set to meet to discuss plans to hear testimony from the founders of the WE Charity, Craig and Marc Kielburger, as well as the promised appearances at an unclear date by Trudeau and his chief of staff, Katie Telford.

The Kielburgers are set to testify on Tuesday.

Trudeau and Telford will give their testimonies on Thursday afternoon.