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Liberal Patronage: $330 Million in Questionable Allocations at Canada’s Green Tech Agency

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16 minute read

The Opposition with Dan Knight

What we learned from the committee is as clear as it is disturbing: Liberal ministers and appointees at SDTC have been funneling taxpayer dollars to friends under the guise of green technology funding.

In a damning House of Commons Public Accounts Committee (PACP) meeting, details emerged that Canada’s flagship “green” agency, Sustainable Development Technology Canada (SDTC), funneled hundreds of millions of taxpayer dollars into companies connected to Liberal insiders. An Auditor General’s report shed light on the staggering scale of this apparent Liberal patronage scheme, revealing that $330 million was awarded to projects with board members tied to the SDTC itself. Another $59 million found its way into initiatives that didn’t even meet SDTC’s green-tech mandate, fueling accusations of political favoritism and cronyism within Prime Minister Trudeau’s government.

Opposition MPs, led by Conservatives Rick Perkins and Michael Cooper, along with Bloc MP Nathalie Sinclair-Desgagné and NDP MP Richard Cannings, took turns dissecting former Liberal Minister Navdeep Bains’ role in appointing Annette Verschuren as SDTC’s board chair. Testimony from the hearing, corroborated by statements from SDTC’s CEO, revealed that Bains reached out to Verschuren multiple times about her appointment, despite his claims of following an “open, transparent, and arm’s-length” process. Yet, when grilled by the opposition, Bains repeatedly invoked “process” and shifted blame onto the Privy Council Office (PCO), claiming he merely encouraged a diverse pool of applicants.

But the evidence doesn’t line up with the former minister’s narrative. Witnesses testified that Assistant Deputy Minister Noseworthy had informed SDTC CEO Leah Lawrence of Verschuren’s appointment even before it was finalized, indicating a behind-the-scenes process driven by Liberal influence. These revelations throw the credibility of the appointment process into question, suggesting it may have been less about selecting qualified candidates and more about ensuring loyal Liberal allies held key positions.

The committee’s findings, sparked by the Auditor General’s investigation, expose a serious issue of conflicts of interest within SDTC’s funding operations. This is a public agency with a mission to advance sustainable development, yet the Liberal government’s management seems to have turned it into a cash machine for insiders. The Auditor General’s report has revealed a troubling pattern of funding allocations going to companies with board connections, undercutting the government’s credibility on environmental stewardship and transparency.

What we learned from the committee is as clear as it is disturbing: Liberal ministers and appointees at SDTC have been funneling taxpayer dollars to friends under the guise of green technology funding. This isn’t just a lapse in oversight; it’s a systematic approach that prioritizes insider deals over real environmental progress, putting the Trudeau government’s commitment to transparency and sustainability squarely in doubt.

Opposition MPs Call Out Lack of Accountability

During this pivotal Public Accounts Committee meeting, opposition MPs went on the offensive, exposing a deep pattern of evasion and mismanagement in how taxpayer dollars were funneled into the hands of Liberal insiders under former Liberal Minister Navdeep Bains. Conservative MPs Rick Perkins and Michael Cooper led the charge, calling out Bains’ deflections and demanding straight answers. They pointed to the $330 million awarded by Sustainable Development Technology Canada (SDTC) to projects connected to its own board members, questioning why this blatant conflict of interest was permitted under Bains’ watch.

Perkins and Cooper’s approach was blunt. They challenged Bains on his repeated reliance on vague, bureaucratic defenses, pointing out that as minister, he had a duty to exercise oversight on SDTC’s operations. Perkins in particular questioned Bains about his involvement in appointing Annette Verschuren as chair of SDTC’s board. Despite Bains’ claims that he couldn’t “recall” specific discussions with Verschuren, evidence surfaced that he contacted her multiple times prior to her appointment. For Perkins and Cooper, this level of involvement, coupled with Bains’ repeated refusal to acknowledge conflicts of interest within SDTC, painted a damning picture of a Liberal minister who prioritized insider appointments over accountability to Canadian taxpayers.

Bloc MP Nathalie Sinclair-Desgagné and NDP MP Richard Cannings focused their questioning on the government’s failure to ensure responsible oversight of SDTC’s environmental funds. Sinclair-Desgagné highlighted Bains’ “arm’s-length” defense as an excuse, given the testimony indicating that senior officials had preemptively informed SDTC’s CEO about Verschuren’s appointment, suggesting an internal network of influence rather than a transparent, merit-based process. She called out the apparent detachment of Bains from SDTC’s operations, underscoring how his office either ignored or bypassed red flags.

NDP MP Cannings raised critical points about the hypocrisy of a government that claims to champion green innovation while allowing SDTC to devolve into a taxpayer-funded favor bank. Cannings pointed out that SDTC’s funds, meant for real environmental progress, were instead granted to projects with questionable ties and little sustainability impact. For Canadians concerned with climate action, Cannings’ questions laid bare the truth: the Liberal government’s commitment to “green” initiatives is far weaker than their dedication to keeping insiders funded.

This unified front by Conservative, Bloc, and NDP MPs highlighted the same disturbing trend: a Liberal government that talks about accountability and climate action but delivers neither, choosing instead to use taxpayer funds to benefit those closest to the party.

Bains’ Defense: Hiding Behind “Process” and Arm’s-Length Excuses

When faced with tough questions on SDTC’s mismanagement, former Liberal Minister Navdeep Bains clung tightly to procedural defenses, repeatedly deflecting responsibility to the Privy Council Office (PCO) and downplaying his role as minister. Bains insisted that the PCO alone was responsible for vetting board members, suggesting his involvement was “hands-off” and strictly procedural. Yet, opposition MPs saw right through this tactic, viewing it as a clear attempt to dodge accountability.

Throughout the hearing, Bains deflected pointed questions by portraying SDTC’s oversight as out of his hands, claiming his office only followed standard processes. He avoided addressing why his appointee, Annette Verschuren, landed the SDTC board chair role despite potential conflicts of interest, with millions later flowing to companies linked to board members. By painting himself as a mere bystander to PCO’s vetting process, Bains sidestepped responsibility for ensuring taxpayer funds went to projects with genuine environmental merit, rather than those benefiting Liberal insiders.

When pressed about specific discussions surrounding Verschuren’s appointment, Bains leaned on what can only be described as selective memory. Asked about his personal involvement, he claimed he “couldn’t recall” multiple key conversations — a response that only raised eyebrows among committee members. Testimonies from SDTC’s CEO and other witnesses indicated Bains contacted Verschuren several times, yet his failure to acknowledge this directly cast doubt on his narrative of impartial oversight.

Opposition MPs argued that Bains’ procedural evasions were thinly veiled attempts to cover for what looks like a Liberal patronage pipeline. His refusal to answer clearly and his dependence on “I don’t recall” responses drew sharp criticism, with opposition leaders labeling it as a standard Liberal tactic to avoid admitting responsibility. The result? A testimony that shed little light on how SDTC was run but spoke volumes about the government’s willingness to dodge accountability whenever insiders are involved.

Inclusion and “Transparency” Won’t Save Liberals from Accountability

Throughout the Public Accounts Committee hearing, Liberal MPs Jean Yip and Francis Drouin took on a clear mission: protect Navdeep Bains at all costs. Instead of addressing the mountain of allegations around SDTC’s blatant cronyism and taxpayer waste, Yip and Drouin turned the hearing into a platform for Liberal talking points, spinning tales of “transparency” and “diversity” that conveniently dodged the actual corruption in front of them. Let’s be clear: hiding behind “inclusivity” doesn’t make the Liberals less corrupt, nor does it absolve them of responsibility when taxpayer money is at stake.

Jean Yip’s questioning gave Bains endless opportunities to recite the “open and competitive” process that supposedly led to Annette Verschuren’s appointment as SDTC board chair. Yet she never asked about Verschuren’s Liberal ties, or why so many millions were awarded to companies connected to SDTC board members. Yip’s focus on “inclusion” and “diverse voices” on the board was a distraction — a slick attempt to shift attention away from the Auditor General’s findings and avoid the reality that those “diverse voices” are well-connected Liberal insiders benefiting from your money.

Francis Drouin was right there to keep the narrative going, pivoting to SDTC’s supposed “green mandate” and giving Bains a platform to tout his government’s commitment to sustainability. But let’s call it what it is: a cover. By talking up sustainability and diversity, Drouin helped Bains avoid explaining why SDTC mismanaged $330 million on projects tied to its own board members, and why an additional $59 million went to ineligible initiatives. This wasn’t accountability — it was damage control, plain and simple.

Yip and Drouin’s interventions were textbook Liberal tactics: deflect, divert, and dilute the discussion. They may have repeated “transparency” and “inclusivity” all they wanted, but these buzzwords are nothing more than a smokescreen for taxpayer-funded favoritism. For Canadians watching, it was an unmistakable display of damage control — the Liberals doing everything they can to dodge real accountability while your tax dollars keep flowing to their inner circle.

Broader Implications: A Systemic Liberal Culture of Avoiding Accountability

The revelations from this Public Accounts Committee meeting show us something far darker than the mismanagement of a single agency. They expose a deeply entrenched system where Trudeau’s Liberal government doesn’t just waste taxpayer money — they use it to reward political cronies and shield insiders from accountability. This isn’t just negligence; it’s the Trudeau Swamp in action, a well-oiled machine funneling your money to friends and allies under the thin cover of bureaucratic “process.”

At the center of this scandal is a strategy the Liberals have perfected: hide behind procedural jargon and “arm’s-length” defenses to dodge any responsibility. The moment former Minister Navdeep Bains took the stand, you could see the tactics at work. Facing questions on how Sustainable Development Technology Canada (SDTC) turned into a cash cow for Liberal insiders, Bains and his fellow Liberal MPs defaulted to the same tired script — insisting every questionable allocation, every insider appointment, was just “routine process.” They claim “independence,” they claim “transparency,” but the evidence paints a different picture: Liberal insiders filling key roles and pulling the strings to channel your money into their pockets.

This scandal isn’t an isolated incident. It’s a glimpse into a troubling pattern, where taxpayer funds — meant for genuine public service — have become Trudeau’s political currency, up for grabs to those with the right connections. And make no mistake: Navdeep Bains’ refusal to answer real questions isn’t just about protecting himself. It’s about preserving a whole Liberal network that thrives on government patronage, hidden behind bureaucratic red tape. The Liberals have turned “process” into a shield, protecting ministers from facing the consequences of their actions.

The stakes couldn’t be higher for Canadians. This isn’t just about misusing a few dollars — it’s about a government prioritizing loyalty over public good, rewarding insiders while millions of Canadians wonder where their taxes are actually going. Under Trudeau’s watch, the promise of accountability has become a punchline, replaced with cronyism and evasion. So here’s the real question: Is Canada governed for its citizens, or for an elite network of well-connected Liberal insiders? Because after this committee meeting, the answer seems painfully clear.

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Canada can – and should – crack down on trade-based money laundering

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From the Macdonald Laurier Institute

By Jamie Ferrill for Inside Policy

Neglecting to take decisive action enables organized criminal networks whose activities cause significant harm on our streets and those of our international partners.

Financial crime bears considerable political and economic risk. For the incoming Trump administration, the threat that transnational organized crime and the illicit financial flows pose to global financial stability is a top priority. The threat of tariffs by the Trump administration makes the costs to Canada in enabling global financial crime all too apparent. In addition to the cost of tariffs themselves, the associated reputational risk and loss of confidence in Canada’s financial system has implications for investments, credit, supply chains, and bilateral co-operation and agreements.

Canada’s proximity to major international markets, stable economy, high standard of living, and strong institutions and frameworks make it an attractive place to do business: for both legitimate and criminal enterprises.

Trade is a key contributing sector for Canada’s economic security. It represents two-thirds of Canada’s GDP, and exports alone support nearly 3.3 million Canadian jobs. Trade is also highly vulnerable to criminal exploitation. Ineffective oversight, regulatory complexity, and lagging technology adoption, coupled with a lack of export controls, make it possible to move vast proceeds of crimes, such as those from drug trafficking, human trafficking, corruption, and tax evasion through the global trade system.

These vulnerabilities are well-known by transnational organized crime groups. They are able to effectively move billions of dollars of dirty money through the global trade system every year, a method commonly referred to as Trade-Based Money Laundering (TBML).

While any statistics must be interpreted with caution, evidence shows that TBML is a prevalent method of money laundering.

What is it?

There are several types of Trade-Based Financial Crimes such as terrorism financing through trade, sanctions evasion, and simply trade fraud. However, the TBML definition is necessarily specific. Essentially here, TBML is a money laundering method: the processing of criminal proceeds to disguise their illegal origin. TBML involves the movement of value through the global trade system to obfuscate the illicit origin. This is usually done through document fraud: undervaluing, overvaluing, phantom shipping, or multiple invoicing. Different techniques employ different aspects of the supply chain. And TBML may be just one method used within larger money laundering operations.

By way of example, US authorities allege that two Chinese nationals living in Chicago laundered tens of millions of dollars for the Sinaloa and Jalisco Cartels. Drugs were smuggled into the United States and sold throughout the country. The proceeds from these sales were collected by the Chinese nationals. Those proceeds were used to purchase bulk electronics in the United States, which were then shipped – with a falsified value – to co-conspirators in China, who sold them locally. The legitimacy provided by the electronics sales and the trade transaction provide cover to “clean” proceeds from precursor crime.

Either the importer and/or the exporter of the goods can shift value. Chances here are the electronics shipped were undervalued: on leaving the country, they are declared at a (much) lower value than they are actually worth. The importer in China pays the undervalued invoice, then sells the goods for what they are worth. The profit from those electronics now appears clean, since it was used for a “legitimate” sale. The ensuing value gap can be transferred informally or stored as illicit wealth. The value has now shifted, without fiat currency leaving the country of origin.

But the cycle does not stop there. The value and money itself continue to traverse around the world, through various intermediaries such as financial institutions or cryptocurrency exchanges. It then goes right back into the system and enables the very crimes and organized crime groups that generated it in the first place. It is, in short, the business model of organized crime.

The Canadian problem

Ultimately, the proceeds of crime that have been legitimised through TBML (and other money laundering methods) supports the criminal enterprises that generated the value in the first place. In the example, these are prolific cartels who have been behind the fentanyl crisis, migrant trafficking and abuse, corruption, and widespread violence that destabilizes communities and undermines governments across North America and beyond.

With new actors, drug routes, and ways of doing business, the cartels are very much active in Canada. The Sinaloa cartel in particular has established a significant presence in Canada where it controls the cocaine market, manufactures and distributes fentanyl, and is embedded in local criminal networks. This increases Canada’s role as a strategic location for drug trafficking and a base to export abroad, notably to Europe, the US, and Australia.

Hells Angels, Red Scorpions, ’Ndrangheta, and other organized crime groups are also exploiting Canada’s strategic location using their transnational links. These groups are active in criminal activities that generate proceeds of crime, which they launder through Canadian institutions. From drug trafficking to extortion to human and sex trafficking, the foundation of organized crime relies on generating and maximizing profits. The proceeds generally need to be laundered; otherwise, there are direct lines back to the criminal organizations. They are, without a doubt, exploiting the trade sector; the very sector that provides so much economic security for Canada.

Canada’s regulation, reporting, and prosecution record for money laundering is notoriously weak. Its record for regulation, reporting, and prosecution for trade-based financial crimes, namely here TBML, is even weaker.

As financial institutions and other regulated entities face increased scrutiny following the TD Bank scandal and the Cullen Commission’s inquiry into money laundering in BC, more criminal activity is likely to be displaced into the trade sector and the institutions it comprises.

TBML is difficult for financial institutions to detect, especially given that 80 per cent of trade is done through open accounts. It exploits established trade structures that are meant to protect the system –like documentation and invoicing processes – by manipulating transactions outside traditional payment systems, which requires more sophisticated anti-money laundering strategies to address these hidden vulnerabilities.

Addressing the problem

Trade is a gaping vulnerability. Yet, it attracts minimal attention in countering transnational financial crime. Containing the fentanyl crisis for one requires a collaborative effort to bolster supply chains and the trade sector against financial crime. This means global cooperation, technological advances (such as blockchain technology), appropriate resourcing, more scrutiny on high-risk countries and shippers, and regulatory innovation.

But political will is in short supply. The federal government’s Budget 2024 and the resulting proposed Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorism Financing Act will grant CBSA new authorities to counter TBML, but limited resources to make good on them. And CBSA cannot do it alone.

Transnational organized crime and the illicit financial flows that support it poses a threat to global financial stability. The enabling of financial crime hurts Canada’s reputation abroad. With a new political regime emerging in the US, Canada cannot afford to be seen as a weak link. Loss of confidence in a country and its financial system has implications for investments, credit, supply chains, and bilateral cooperation and agreements.

By neglecting to take decisive action, we inadvertently enable organized criminal networks whose activities cause significant harm on our streets and those of our international partners. With profits as their primary driver, it is imperative that we scrutinize financial pathways to disrupt these illicit operations effectively.

Organized crime groups are not bound by privacy laws, bureaucracy, political agendas, and government budgets. They are continually evolving and staying many steps ahead of what Canada is equipped to control: technologically, geographically, strategically, logistically, and tactically. Without appropriate regulations, technological advances, and resources in place, we will continue to be a laggard in countering financial crime.

More systematic change is needed across regulatory frameworks, law enforcement coordination and resourcing, and international partnerships to strengthen oversight, close loopholes, and enhance detection and disruption.  It would be a low-cost signal to the Trump administration that Canada is committed to upping its game.


Jamie Ferrill is senior lecturer in Financial Crime at Charles Sturt University and co-editor of Dirty Money: Financial Crime in Canada.

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Energy

Coldest city in Canada at war with natural gas and common sense

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From the Frontier Centre for Public Policy

By Joseph Quesnel

Winnipeg City Council’s War on Natural Gas Shows the Need to Counter Special Interests

Some members of the Winnipeg City Council are determined to continue their reckless war on natural gas in buildings in Canada’s coldest city.

The latest move occurred at City Council when the City’s Standing Policy Committee on Water, Waste and Environment considered a motion to discuss options for moving away from not using natural gas heating in existing and new residential, commercial and industrial buildings. The lack of action placed the motion in limbo.

It ought to remain in limbo forever. Winnipeg City Council should instead enshrine energy choice. Winnipeggers who favour energy choice and sensible policy can take heart from the experience of other Canadian cities. More cities are fighting these natural gas bans. Vancouver City Council ended a natural gas ban in new buildings this summer after a group of councillors pushed back. They raised housing affordability concerns because homeowners and landlords are subject to costly retrofits with a ban on natural gas heaters, gas furnaces and gas boilers.

Unfortunately, a recent tied vote defeated the policy reversal. This organized opposition, however, shows what is happening at ground level: Average people pummeled by inflation and higher energy costs are finally fighting back.

Opponents of energy choice make exaggerated claims regarding the influence of the energy lobby in these debates, while they are tone-deaf about the actual organized interests at play. Environmental organizations such as the Pembina Institute are well-funded and always present at protests. They also funnel misleading information to local activists and politicians.

Manitoba Hydro has spoken out against natural gas bans for years. In 2021, the Crown electric utility said moving the province from natural gas to electricity as a home-heating source was unrealistic. Despite abundant hydropower, Manitoba does not have the generating capacity to support this switch. Manitoba Hydro said the grid cannot serve peak demand without natural gas. Meeting our energy needs without natural gas would require doubling the province’s generating capacity. This is the province’s utility saying this based on a simple analysis of the evidence, not a ‘right-wing’ economist.

The problem with these debates is that ideologically driven environmental organizations drown out reasonable voices. These groups are often behind local campaigns to deny energy choice. They are well-funded special interests ‒ often using foreign funding or even funding from our governments.

Individuals and organizations committed to energy choice must become active and counter these well-funded voices. Pro-energy choice voices must refute the misinformation spread by environmentalist interests. In municipal elections, they should promote candidates and even electoral slates that respect energy choice and sensible policy.

In the United States, some Republican-led states have successfully prevented localities from banning certain hydrocarbon-based heating infrastructure. However, their efforts are limited because a change in state-level politics could reverse the move to limit local governments.

Strong citizen-led local movements are the answer. They should always watch for policies that oppose energy choice. Such movements must be active in local politics, opposing these elitist environmental special interests. Reasonable Winnipeggers ‒ right and left ‒ must defend reasonable energy policies. This is not a partisan issue. It is never too late to stand up for sanity in the local fight for energy abundance and freedom for all.

Joseph Quesnel is a Senior Research Fellow with the Frontier Centre for Public Policy.

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