No evidence backing truck-maker's allegations about zero-emission grants, B.C. auditor general finds

Auditor General Michael Pickup speaks in the press theatre at the legislature in Victoria, B.C., on March 19, 2024. (THE CANADIAN PRESS/Chad Hipolito)

British Columbia's auditor general found no evidence of a conflict of interest in the handling of provincial grants for the zero-emission vehicle sector, after an accusation by a truck maker earlier this year.

Auditor general Michael Pickup said the probe looked into accounting firm MNP's handling of Advanced Research and Commercialization grants, reviewing "a significant amount of information" from the company, government and applicants.

Pickup said the results show no evidence MNP wrote grant applications for clients, influenced the evaluation process to benefit clients or used its administration of the grant program to "recruit" clients for the company's other services.

"In the end, after our review, we found no evidence of a conflict-of-interest in the areas we looked at," Pickup told a news conference Wednesday.

None of the applicants, including the electric-hybrid truck-maker raising the allegations, had their applications written by MNP, he said.

"MNP was the program administrator," Pickup said of the investigation's findings. "They didn't score proposals or make funding decisions. We confirmed that all decision points in the award process required and received ministry approval."

In April, the provincial legislature unanimously directed Pickup's office to examine allegations by truck-maker Edison Motors that MNP was both administering the grants and offering services to help businesses with applications.

In response to questions from The Canadian Press, Edison Motors leadership said their team was "frustrated" but not surprised by the result of the audit.

The investigation "left out key questions and ignored key evidence," the company said in an emailed statement.

It said the auditor general's probe did not look at MNP's administration of other government grant programs or the firm's management of conflicts of interest.

The auditor's report said the review focused on the potential conflict of interest pertaining specifically to Edison's allegations and covered a period starting in 2018.

That's when B.C.'s Ministry of Energy, Mines and Low Carbon Innovation entered into a contract with MNP to administer the grant program in question.

Between March 2018 and 2024, the province paid MNP about $1.4 million by for its services administering the program, the auditor's report said.

Another statement from Pickup's office said the allegations from Edison, which is based in Merritt, B.C., suggested MNP "was offering to write grant applications in exchange for a success fee while also deciding who received grant funding."

At the time, MNP said the allegations were "false and misleading."

Premier David Eby said Wednesday that it was reassuring to know the investigation found the grant program had been handled properly in this case.

But he said it is a "good reminder" to the provincial government to have clearer communication in explaining grant processes to applicants and others.

Eby thanked Edison Motors for coming forward with their concerns.

"People have concerns like this about public spending, about where money is going, I want them to come forward," the premier said at an unrelated news conference.

"It allows us to have investigations and reviews, and find out what's happening and ensure that the public can have confidence."

Energy Minister Josie Osborne issued a statement saying the auditor general's office had no recommendations stemming from its review, and the province is "moving forward" with the grant program as normal.

She said the ministry would work to improve the information provided to applicants to ensure it's "clearer" that MNP's role is limited to day-to-day administration.

"British Columbians need to be able to have confidence that public funds are being administered appropriately and that grant programs are fair for everyone. And that is exactly what the auditor general found," Osborne added.

In addition to speaking to ministry staff and MNP, Pickup said his office reached out to all 99 unique applicants who submitted 151 applications in total, eventually receiving responses from 71 applicants accounting for 109 applications.

The report said those 71 applicants accounted for 91 per cent of all applications that were successful in receiving grant funding, as well as 95 per cent of those with funding decisions pending and 62 per cent of unsuccessful applications.

Pickup said he considers that a "high response rate" given the time constraint his office was working with to conduct the examination within a few months' time.

"Doing this work is not something you do in 100, 200 or 1,000 hours," Pickup said of the effort. "This represents more like 3,000-plus hours of meticulous work."

Pickup said he stands by the evidence, describing it as "clear on the three questions that we asked."

B.C. has committed about $50 million to the Advanced Research and Commercialization grant program under its CleanBC plan to "reduce transportation-related greenhouse gas emissions." 

This report by The Canadian Press was first published Aug. 28, 2024.