Canada drops efforts to recover $34M from SDTC green fund
Ottawa has officially abandoned efforts to recover $34 million in public funds incorrectly distributed by Sustainable Development Technology Canada (SDTC), concluding that pursuing the money is no longer in the public interest. According to parliamentary documents, a new board of directors at the shuttered green fund determined that further recovery steps carried little chance of success.
The Collapse of SDTC Recovery Efforts
The controversy surrounding SDTC dominated federal parliamentary proceedings throughout much of 2024, leading to a standstill over demands for investigative disclosures. The green fund was ultimately shut down in 2023 following an independent audit that confirmed significant administrative mismanagement. Although an official government investigation subsequently identified at least five distinct projects that failed to meet basic program eligibility criteria, the current administration has chosen to halt legal recovery operations.
Parliamentary documents signed by the office of Industry Minister Mélanie Joly indicate that the decision relies on formal legal advice obtained by the organization’s new leadership. This board concluded that the initial beneficiaries acted in good faith, despite earlier findings from federal watchdogs detailing systemic failures.
Contlicting Audit Findings on Public Funds
The decision to drop recovery efforts stands in sharp contrast to findings previously published by federal oversight bodies. An audit conducted in 2024 by the Auditor General of Canada examined a sample of projects and identified 10 ineligible undertakings totaling $59 million. That audit also concluded that the SDTC board of directors breached conflict of interest policies while approving tens of millions of dollars in contracts.
| Oversight Body / Official | Ineligible Amount Identified | Core Finding |
|---|---|---|
| Auditor General of Canada (2024 Audit) | $59 million (sampled estimate) | Identified 10 ineligible projects and multiple conflict of interest violations by the board. |
| Government Investigation | $34 million | Confirmed at least five projects failed admissibility criteria alongside unrecovered improper costs. |
| SDTC New Board of Directors | N/A (Recovery halted) | Concluded that recovery litigation lacks a realistic chance of success and opted against pursuing the funds. |
Political Reactions and Opposition Criticism
The choice to write off the millions has drawn sharp criticism from opposition lawmakers who tracked the scandal during its height in Parliament. Conservative MP Luc Berthold expressed strong opposition to the decision, arguing that individuals who received the funds will face no financial accountability.
“There are people who benefited from these sums who are going to get away with it, without paying back a single penny, without having to account to anyone. It’s unacceptable,” Berthold stated in an interview with Le Devoir.
Berthold further contended that transparency remains lacking regarding how the green fund distributed resources during its operational years, comparing the organization’s grant allocation practices to closed-network distribution.
Background Leading to the Shutdown
The winding down of SDTC follows a turbulent period marked by committee hearings and administrative departures. In June 2024, Simon Kennedy, then deputy minister of Innovation, Sciences and Economic Development (ISED), told a parliamentary committee that organizations failing to spend public money appropriately would face mandatory recovery actions to return funds to the Crown. Kennedy has since departed the public service.
Subsequent political transitions, including the prorogation of Parliament and federal elections held in 2025, shifted legislative priorities toward pressing trade disputes with the United States. With the file now closed by the current administration, the formal attempt to reclaim tens of millions in misallocated technology subsidies has officially ended.