Companies connected to members of a federal crown corporation’s board of directors have received tens of millions of dollars in funding from the organization tasked with investing in new clean technologies.
A review by True North shows that Sustainable Development Technology Canada (SDTC), a foundation established and funded by the Canadian government, has been doling out money to companies its board members own or work for.
SDTC operates at arms length from the government but is funded by Innovation, Science, and Economic Development Canada (ISED). Its mandate is to advance clean technology innovation by funding clean tech companies and their projects.
However, an ISED report conducted by the consulting company Raymond Chabot Grant Thornton and leaked to True North found that the members of SDTC’s board have been funding companies with which they are directly involved.
A review by True North found several members of the SDTC board have vested financial interests in the companies the crown corporation has given seed money to in the last seven years.
Andrée-Lise Méthot was a member of SDTC’s board from July 2015 to September 2021, serving on the Project Review Committee, which reviews and approves funding projects before sending the proposal to the entire board.
Méthot is also a managing partner for the venture capital firm Cycle Capital, helping to found the firm in 2009.
During Méthot’s time on SDTC’s board, the crown corporation funded seven out of the 25 firms in which Cycle Capital is invested. These companies include MineSense Technologies, Spark Microsystems, GreenMantra Technologies, Concentric Agriculture, Polystyvert, and VueReal.
On May 2, 2017, SDTC’s board approved $2,250,000 in funding for Spark Microsystems. That same day, SDTC also approved $2,278,949 in funding for GreenMantra Technologies and $2,536,904 in funding for Concentric Agriculture.
On May 1, 2018, SDTC’s board approved $4,000,000 in funding for MineSense Technologies.
On June 27, 2018, SDTC’s board approved $8,500,000 in funding for VueReal.
On September 15, 2021, the same month that Méthot left SDTC’s board, SDTC approved $3,500,000 in funding for Polystyvert.
Companies in Cycle Capital’s portfolio, such as Agrisoma, Tantalus, EOCYCLE, and Airex Energy received money from SDTC before Méthot was appointed to the board.
Méthot has also been a corporate director for the biofuels and renewable chemical product company Enerkem since November 2014.
On February 2, 2016, SDTC’s board approved $12,000,000 in funding for Enerkem.
It is worth noting that SDTC had approved Enerkem for $63,600,000 in funding on November 28, 2014, the same month Méthot was added to the Enerkem board, though it was eight months before being added to the SDTC board.
Méthot did not respond to a request for comment from True North.
Guy Ouimet, an SDTC board member since 2018 who is also on the Project Review Committee, is also a managing partner at the venture capital firm Celtis Capital.
As a venture capitalist, Ouimet sits on the board of Lithion Technologies, a company that received $3,842,000 in funding from SDTC on August 29, 2018, just one and a half months after Lithion was incorporated.
When asked to comment on SDTC funds granted to Celtis Capital’s holdings, Ouimet said “I can only refer you to SDTC communications service.”
Ellen McGregor, an SDTC board member since 2015 who is also on the Project Review Committee, is the CEO and principal owner of Fielding Environmental.
Fielding is a founding partner of GreenCentre Canada, who collaborates with clean tech companies, helping them with research and hastening their arrival to market.
One such company GreenCentre collaborated with was Li-Cycle, which was granted $2,708,488 in funding on August 29, 2018 with GreenCentre listed as a “consortium member.”
Li-Cycle was also given $4,000,000 on August 17, 2020, though GreenCentre was not listed as a consortium member.
The Raymond Chabot report noted that the board almost always unanimously supports projects, and there is no evidence of disagreements, challenges, or vote mix.
Records from the meetings are not public, so it is not clear which committee members, if any, recused themselves.
The Raymond Chabot report also found that SDTC President and CEO Leah Lawrence had failed to declare a conflict of interest with a consultant, as both the consultant and Lawrence had ties to the clean tech firm Innovation Asset Collective.
According to the report, Lawrence created a backdated conflict of interest declaration between herself and the consultant under the advice of her external legal counsel.
In a statement to True North, SDTC said that its board members proactively disclose conflicts of interest according to the organization’s conflict of interest policy.
“SDTC’s Board Directors proactively disclose real or perceived conflicts of interest, and recuse themselves from discussions as appropriate. Please see our conflict of interest policy on our website,” the statement said.
However, the report by Raymond Chabot Grant Thorton said this policy has been “inconsistently applied.”
The “conflict of interest policy appears to not have been consistently followed for Seed Funding,” the report found, also noting that it “does not require board members and employees to declare conflicts with consultants, expert reviewers and other companies providing services.”