KPMG suspends its partnership with WE Charity

28 July 2020 2 min. read
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Accounting and consulting firm KPMG has joined a wave of corporate partners that are suspending or reviewing their relationship with WE Charity, which has been at the centre of a cronyism scandal in the federal cabinet.

KPMG Canada has partnered with WE Charity for the last decade, sponsoring a career training program, supporting the charity’s social entrepreneurship centre, and delivering pro bono advisory services.

We Charity (formerly Free The Children) was founded in 1995 by philanthropists Marc and Craig Kielburger, and focuses on international development and youth empowerment. The charity is known for its celebrity-studded, stadium-sized WE Day youth empowerment events which recognize the impact students and youths have made on local and global issues.

Elio Luongo, CEO of KPMG Canada, previously served as the co-chair of WE Day in Toronto.

KPMG suspends its partnership with WE Charity

“KPMG in Canada has decided to suspend its relationship/sponsorship with WE,” Kevin Dove, a KPMG spokesman, told The Globe and Mail on Friday. “Given the organization is pausing its operations to reassess its focus and we had no further engagements planned with them, we agreed with WE to suspend our relationship.”

KPMG is joining a number of other companies which are suspending or opting to not renew their partnerships with WE, including Telus, Virgin Atlantic Airways, and Loblaw. WE said in a statement that it had reached out to its corporate partners to proactively pause its related partnerships.

The charity has been embroiled in a scandal since June, when the federal government announced WE Charity would run the $912 million Canada Student Service Grant. WE would receive up to $43.5 million to administer the program, which gives post-secondary students paid volunteer opportunities to make up for dwindling summer job prospects during the pandemic.

It soon emerged that Prime Minister Justin Trudeau’s mother and brother received $250,000 and $32,000, respectively, for speaking engagements at WE Charity in the last four years. The PM failed to recuse himself from discussions related to the contract award.

Finance Minister Bill Morneau also had family ties to the charity, with two of his daughters having worked for the charity (one in a paid contract position, and one as a volunteer). Morneau likewise failed to recuse himself.

Mario Dion, Ethics Commissioner of Canada, is currently investigating the matter.

The contract award was cancelled earlier this month, and has focused a critical eye on WE Charity’s organizational structure and the ties between its charitable and business arms. There are numerous related but legally separated entities in the WE family, including ME to WE, a Kielburger-owned, for-profit enterprise which offers socially conscious products, leadership training, and travel experiences.

The charity said in mid-July that it will make governance and structural changes, refocus on its initial mandate of international development, and hire a consulting firm to conduct a review.