1/ Morning. A few thoughts about yesterday’s WE testimony and what it tells us about how Ottawa makes decisions (sorry, this is going to go for awhile, feel free to mute if you're sick of the subject).

2/ Min. Chagger – a Minister without her own Ministry - clearly had *nothing* to do with the program because all key decisions were made between PMO/Finance and ESDC. She was sent in front of committee to distract from PMO/Finance role, I think. Felt a bit sorry for her.

3/ CSSG was clearly cooked up in PMO/Finance. ESDC only given a very general idea of what was being designed, about a week before, when asked to “provide options on service opportunities for students”.

4/ WE happened to have a proposal floating around YOW on similar kinds of lines at in early April, but more about social entrepreneurship than volunteering. Unclear what influence this document had on govt.

5/ On April 19 a PMO/FINMIN/ESDC team met to discuss service opportunities ideas. At this meeting, an unknown Finance staffer said “someone should call WE about this.” Subject of call seems to have more “what should we consider in designing this” than “can you run this”?

6/ On April 22, PM announced the student package including CSSG. Proposed scope of program seems to have taken ESDC by surprise, as did discussion later in day with Finance when they were told “get this up and running in three weeks”.

7/ The key to understanding the whole mess I think is in how ESDC chose to frame the problem they suddenly had in front of them. This is going to seem like a tangent but it’s really important to understand the constraints they thought they were working under.

8/ Frame 1 was that they thought the main difficulty in implementation was going to be recruiting students, not placing them. ESDC felt – from long experience with CSLP and other youth programs – that this was not a strength of any govt agency, hence a need to go outside.

9/ But go outside *specifically* with an organization that was a) down with youth, b) had a strong tech game and c) national scope. I think it is easy to see why, if you frame the problem that way, WE was considered such an obvious sole source.

10/ Now had they framed the problem differently, they might have got a different answer. If they had said “hey the problem isn’t getting students to volunteer, it’s placing them properly” then WE is not an obvious sole source at all.

11/ If placement were the issue, they would have gone to Volunteer Canada or someone like that. Someone who actually has connections in the sector, which WE doesn’t (a weakness acknowledged by WE when they tried to recruit VC as a partner.

12/ Frame 2 is the issue of “paying for/commodifying volunteering” at levels which in some cases might have worked out to less than minwage. They could have avoided this by tying compensation to a larger CSLP grant/tuition waiver. Why didn’t they?

13/ Quick answer I think is 1) CSLP isn’t national (PQ, NT, NU are all opted-out) and 2) program was not exclusively for students but also for recent grads (who would therefore not have been eligible for a PSE-based payment).

14/ (April was a long time ago but the hottest complaint in town back then was that many graduating students weren’t CERB eligible. Apr 22 announcement made them eligible for CESB instead & I think for sake of consistency they were include in CSSG even if it complicated delivery)

15/ Anyways, because of these two frames, I think ESDC had effectively locked itself in to WE as a partner on April 22 even before Craig Kielburger called Wernick and said “hey remember that old idea? Here’s a new one based on the PMO announcement”.

16/ (ok, yes, the PM’s conflict of interest. Wernick said she knew about Sophie and WE, but also that “it’s not the public service’s job to remind politicians about staying out of a conflict”, which I think is probably true).

17/ So, ok, now ESDC has decided based on its frames that it has to be WE and it has to be mostly about recruitment, and it can’t be a contract (too much time, competition requirements, etc), so it has to be a contribution agreement. This creates wrinkles.

18/ To simplify a bit, where running govt programs are concerned: In a contract, government tells you what to do, whereas In a contribution agreement they give you a certain amount of money and expect you to achieve general results. More flexibility for the recipient.

19/ In practice this meant govt formally renounced its desire to give a shit about how WE was getting/placing volunteers. Too much information, really, and they were busy putting out fires elsewhere. Being hands off was a feature not a bug.

20/ Now here’s where it gets interesting. We are told (can’t find source and it's not in the Apr. 22 backgrounder https://www.canada.ca/en/department-finance/news/2020/04/support-for-students-and-recent-graduates-impacted-by-covid-19.html) that CSSG was meant to be a $912M program. But the contrib agreement negotiated between ESDC and WE in effect was for a max of about $119.5m

21/ This is worth explaining in depth because Min. Chagger sure as hell couldn’t do it yesterday. Each position was worth max $5k. The contrib agreement was for 20K jobs. So max $100M in payment to students plus the agreement itself to cover admin costs = $19.5M so $119.5M total

22/ Three points: 1) a 19.5% admin cost is *really* high. 2) And that’s assuming everyone got max: if avg payment had been $3K we’re talking a 33% admin cost (wow). 3) hey, what about the other $800 million?

23/ On the last point: go back to tweet 8 and the issues of ESDC framing. They were skeptical about demand for the program. So – I think – what happened was that they decided to keep the amount of money limited, as a way of not overcommitting public $ (this is not a bad thing).

24/ We learned from Min Chagger that there was the possibility of a second contract, with slightly higher admin fees (I think I heard $22M but not sure), but covering the same number of placements. Still only comes to about $240M max.

25/ I think the only way we can reconcile a reputed $912M budget (anyone got a source on that?) and ESDC only really preparing to spend $240M max is that senior folks at ESDC thought CSSG was a batshit crazy idea and were trying to limit its scope.

26/ If you'll forgive this aside: I’m pretty sure I was the only person on April 22 to say out loud that developing a new national service program on a few weeks notice in the middle of a pandemic was indeed batshit crazy. Just sayin’ http://higheredstrategy.com/coronavirus-20-so-that-student-support-package/

27/ Anyways, you’ll note that in this whole story, PMJT does not come up once. You can explain the decision process without him or any of his direct reports having had anything to do with it (though this does not of course reduce the appearance of a conflict).

28/ What you get instead is a picture that the Kielburgers had a lot of access in Ottawa, both with public servants and politicians (and possibly their aides). Enough to shape (in part) the way programs are designed. How they got that access is an interesting question.

29/ Like Trudeau, the Kielburgers are celebrities. They to some degree fed off each other in the process of becoming celebrities. And so the relationship has a crony-istic feel to it, even if there is no quid pro quo. More of a grey zone than people think, I think.

30/ (Though, as someone- Jenni Byrne, maybe? - said yesterday: if the Kielburgers have that kind of access in Ottawa, shouldn’t WE be in the list of organizations in the registry of lobbyists (it isn’t)? Interesting legal question, I think)

31/ I think when you look at the testimony, the substantive conflict of interest stuff recedes in importance but the goofy program design process looms larger. Libs had other, less complicated options to get $ to students that did not lock them into signing no-bid agreements.

32/ So, the main lesson is: don’t design $1B high-touch, high-admin programs in three weeks in the middle of a pandemic because you will fuck it up. But also, maybe policy-making in this govt is too much in hands of political aides and not public servants.

33/ Again, thanks for reading, apologies for cluttering the feeds of those who don’t care about WE. Also: Ayo Akinola is a legend, and sumo is back at the Kokugikan in nine days (whoo!). Enjoy your day.