Carney’s Government Just Let $34 Million in “Green Slush Fund” Money Walk Away

Mark Carney likes to talk about discipline. He’s the former central banker who promised Canadians a government that would spend less on itself and respect every tax dollar.

So here’s a simple test of that promise: when money goes out the door to people who were never supposed to get it, does this government try to get it back?

The answer, it turns out, is no.

What Ottawa Quietly Admitted

In a written reply to an Order Paper question from Conservative MP Luc Berthold, Industry Minister Mélanie Joly confirmed that roughly $34 million paid out by Sustainable Development Technology Canada (SDTC) went to five projects that were ineligible for the money. The government will not try to recover a cent of it, as the National Post reported.

The reasoning, in the government’s own words: “as a matter of fairness and sound stewardship of public funds, it was determined that further pursuit of recoveries was not likely to be successful, and not in the public interest.”

Read that again. Not chasing money that was handed out improperly is being called “sound stewardship.”

According to the Toronto Sun, the reply says the decision was made in consultation with legal counsel and that the board found the recipients had negotiated and performed their agreements “in good faith.” No details were released about which projects got the money or what they were.

A Scandal Canadians Already Paid For Once

SDTC was a federally funded foundation meant to back new clean technology. In June 2024, Auditor General Karen Hogan found significant lapses in governance and stewardship of public funds there.

Her audit report found that 10 of the 58 projects she examined were ineligible, and that those 10 received $59 million. She estimated that about 1 in 10 of the remaining Start-up and Scale-up projects approved in the audit period were also ineligible. She also found 90 cases where the foundation’s conflict-of-interest policies were not followed, connected to nearly $76 million in funding.

The fallout was enormous. SDTC was shut down and its work folded into the National Research Council. The House of Commons public accounts committee unanimously expressed “extreme concern with the blatant disregard of taxpayer funds” and called on the government to recoup the money, according to the National Post.

That was an all-party position. Liberals included.

The Numbers Got Smaller. The Answers Didn’t Get Clearer.

After the Auditor General’s report, a newly appointed SDTC board ran its own review. Per the National Post, it looked at 158 projects with help from “three independent third-parties” who have not been identified.

Despite reviewing roughly three times as many projects as the Auditor General, that review found only five ineligible projects, not ten. The government hasn’t publicly explained the gap in a way taxpayers can check, and a spokesperson for Innovation, Science and Economic Development Canada declined to name the recipients.

So the review that shrank the problem was carried out by unnamed reviewers, it cleared recipients who remain unnamed, and it led to a decision based on legal advice nobody has seen. That’s not accountability. That’s a closed door with a “trust us” sign on it.

Liberal MPs Shut Down the Debate

On October 8, Conservatives on the public accounts committee moved a motion saying that recovering the $34 million is in the public interest. It never came to a vote.

As The Hub reported, Liberal MPs Jean Yip, Tom Osborne and Kristina Tesser Derksen voted to adjourn the meeting. The Conservative members and the Bloc Québécois member voted against.

The Liberal arguments were telling. Tesser Derksen called the $34 million “1.6% of the total funding that was managed by SDTC.” On naming the companies, she said it “would result in a bit of a witch hunt.” Osborne said the recipients’ names were kept private because they “were not found to have committed any wrongdoing.”

The Hub also noted what didn’t happen: no member tabled the legal advice or the board’s reasoning, and a question about whether any of the five recipients were linked to board members with conflicts of interest went unanswered.

Why This Matters

Supporters of the decision will say the recipients acted in good faith and a lawsuit might fail. Maybe. But Canadians have no way to judge that, because the government won’t show its work.

If the funding agreements truly gave Ottawa no way to claw back ineligible payments, that’s a failure worth explaining. If they did, then walking away is a choice. Either way, the people paying the bill deserve to know which companies got the money, what the legal advice said, and why a review by unnamed reviewers should overrule the Auditor General’s count.

This is a Carney government decision, signed by a Carney minister, defended by Carney’s MPs. “It was the last government’s mess” doesn’t cover it. Cleaning up that mess was the job, and this government chose to close the file instead.

A government that won’t chase $34 million in ineligible payments, won’t name who got it, and votes to stop the conversation isn’t showing discipline. It’s showing Canadians exactly how much their money is worth to it.