“The fallout from the Canada Student Service Grant has placed the charity in the middle of political battles and misinformation that a charity is ill-equipped to fight,” it said in a statement. “As a result, the financial math for the charity’s future is unclear.”
The announcement marks a dramatic fall for WE Charity, an education and international development charity founded by brothers Craig and Marc Kielburger as Free the Children in 1995. Its youth empowerment rallies, or WE Days, drew speakers including Prince Harry and Kareem Abdul-Jabbar.
But for months, the Kielburgers, whose work once earned them an appearance on “The Oprah Winfrey Show,” have found themselves on the defensive.
The controversy erupted in June when Trudeau announced that his government had picked the charity to administer a program that would offer grants to postsecondary students unable to find a job during the coronavirus outbreak if they volunteered in their communities.
The arrangement, under which WE Charity stood to earn up to $33 million, immediately raised eyebrows. Trudeau has spoken at several WE Days. His wife, Sophie Grégoire Trudeau, is an ambassador for the charity. There was no public bid.
Amid the outcry, the deal was severed. Parliamentary committees launched probes. The country’s independent ethics watchdog said it was investigating Trudeau — for the third time — for alleged breaches of conflict-of-interest laws. He has twice found the prime minister in violation of them.
It was later reported that the Toronto-based charity and its for-profit arm had paid Trudeau’s mother and brother hundreds of thousands of dollars to speak at its events from 2016 to 2020, and covered their expenses.
Then, Finance Minister Bill Morneau in July apologized after revealing before a parliamentary committee that he had just repaid WE Charity more than $30,000 in travel expenses incurred when he and members of his family traveled with the organization to Kenya and Ecuador in 2017.
Trudeau and Morneau have apologized for failing to recuse themselves from the cabinet discussions on the deal. Trudeau said in parliamentary testimony in July that the public service recommended the charity for the program and that he had initially “pushed back” against the recommendation.
Morneau abruptly resigned last month. He said he didn’t intend to run in the next parliamentary election and that the country needed a finance minister who could chart the country through a long-term recovery from the pandemic-induced economic crisis. Opposition lawmakers said the resignation was tied to the scandal.
Trudeau suspended Parliament last month, promising to come back on Sept. 23 with a post-pandemic recovery plan. The suspension halts the work of the committees probing the deal, fueling cries of a “coverup.”
WE Charity also has operations in the United States and Britain. It said in a statement that it would sell its assets to create an endowment fund that will be used to finish projects in Latin America, Africa and Asia.
Amid the controversy, the charity’s finances, real estate empire and governance model have come under scrutiny.
The Ontario government and several sponsors, including the Royal Bank of Canada and KPMG Canada, severed ties. School boards said they were reevaluating their relationship with the organization. The charity said in a statement that it forecast a loss of revenue “given the indeterminate length of time that political matters will continue.”
“The fallout now from this political process has resulted in serious challenges that risk the entire organization and our 25 years of work,” Craig Kielburger told a parliamentary committee in testimony that was often tense in July.
“We would never have picked up the phone when the civil service called asking us to help young Canadians get through the pandemic if we had known the consequences.”