Question Period Note: ALLEGATIONS OF FINANCIAL MISCONDUCT BY BLACK BUSINESS AND PROFESSIONAL ASSOCIATION BOARD OF DIRECTORS

Members of the Black Business and Professional Association have called for the Board of Directors to be removed and replaced, amid allegations of financial misappropriation of government funding.

• The Government of Canada is committed to empowering Black communities in Canada by investing in the Black-led organizations that serve them.
• We are aware of the call from members of the Black Business and Professional Association to replace the Board of Directors and allegations linked to the appropriateness of funding decisions.
• The Government of Canada always takes allegations of this nature seriously.
• The Government of Canada remains dedicated to operating with integrity and transparency when managing grants and contribution agreements and expects funding recipients to do the same.
• Should the Government of Canada determine that funds it provided directly to an organization were used inappropriately, it will respond using the tools at its disposal.

If pressed:
• We strive to ensure that funding provided to Black-led organizations are used to empower Black communities through fair and transparent processes.
• This commitment illustrates not only our trust in Black-led organizations, but also the trust afforded to us from Black communities in Canada.
• It is our understanding that the organization is undergoing an independent review and forensic audit into the allegations of financial misconduct.
• As we await the results of this audit, the Government of Canada is reviewing funding provided to the organization in question to ensure that related expenditures align with the provisions of the agreement signed by the recipient.
• Pending the results of the review, we will respond appropriately to maintain the integrity and transparency of our grants and contributions agreements.

Black Business and Professional Association Allegations
• Founded in 1983, the Black Business and Professional Association (BBPA) is a Canadian non-profit organization that seeks to promote equity and opportunities for the Black community, particularly in the areas of business, employment, and education.
• On April 24, 2024, Toronto-based entrepreneur Chandran Fernando called for the immediate resignation of the BBPA's current board of directors, accusing them of financial misconduct.
• The board of directors is alleged to have used government grants and sponsorship donations to award contracts to companies linked to former president and CEO Nadine Spencer, without following proper procurement and conflict of interest procedures.
• According to CBC reports, in March 2024, a group of BBPA members demanded the disclosure of all relevant documents to facilitate an independent financial and operational audit. In April 2024, a subsequent letter sent by a lawyer retained by these members also alleged that the BBPA submitted inaccurate financial filings to the CRA.
• According to reports from the CBC, at least $1.5 million was allegedly awarded to companies associated with former board members, including EQ Brands, run by former CEO Nadine Spencer, and Uran Rez Solutions, run by former board member Roderick Brereton. Based transaction records, the BBPA allegedly did not disclose approximately $869,000 in related party transactions on financial statements to the CRA for 2022 and 2023, which is a requirement when a charity pays staff members monies outside of their salary.
o Both Ms. Spencer and Mr. Brereton have released statements that deny wrongdoing.
• While the Board of Directors has not provided a direct response publicly, the CBC cites a March 21 email to members, in which board chair Ross Cadastre denied the allegations “regarding misappropriation of funds.” Subsequent statements from the Board to CBC confirm that an “independent review will be completed by a forensic auditor and an independent third-party firm with expertise in charity and non-profit law and governance,” and that “board chair Ross Cadastre and director Rustum Southwell are temporarily stepping down while the external review and forensic audit take place to prevent any potential conflict of interest.” The Board has also affirmed that it “will not be commenting on anything that may be subject to the external review and forensic audit."
• In light of these allegations, Denham Jolly, the founder of the BBPA, released a statement to CBC, supporting the calls for independent audit, and for the current board to step down, as “a critical first step to restoring transparency and accountability within the BBPA.”
• The daughter of Harry Jerome, a Canadian sprinter and the namesake of the annual award ceremony hosted by the Black Business and Professional Association, has sent a cease-and-desist letter to remove his name and likeness from the award ceremony until the organization is cleared of the allegations.
Funding History for Black Business and Professional Association
• In 2020, the Supporting Black Canadian Communities Initiative established a group of National Funders to support capacity-building in Black-led and Black-serving community organizations.
• The National Funders are four high-capacity organizations, which employ their on-the-ground expertise to distribute funding to community-based organizations through open and transparent calls.
o In 2022, the BBPA received a total of $81,875 from Tropicana Community Services during the National Funders’ first call for proposals, to support efforts to build the sustainability of BBPA’s governance structure.
• The calls for proposals are independently developed and assessed by the National Funders to ensure that investment decisions are made by Black-led organizations in a manner that best serves and empowers Black communities.
• Through the Capital Assistance stream, the SBCCI provided Black-led organizations with up to $100,000 to support capital projects such as purchasing work-related equipment; and/or undertaking renovations and retrofits of existing community and workspaces. This investment was to help organizations more effectively deliver programs and services to the communities they serve.
o The BBPA also received $94,250 in 2022 through the SBCCI Capital Assist to fund the purchase of equipment. Information regarding completed capital assist projects is provided to the public online via the Open Government Portal.
Departmental Integrity Measures
• The Department employs different integrity measures for the streams under the Supporting Black Canadian Communities Initiative, customized to each funding arrangement.
• As per the Capital Assistance Agreement and other grant agreement managed by ESDC, recipients must maintain accurate records of grant expenditures and retain them for three years post-project.
o They must allow Canada access to these records for verification purposes. The Auditor General of Canada can request project-related information within three years for inquiries.
o Recipients must submit progress reports during the project and a final report within 60 days post-project, with the obligation to revise if deemed unsatisfactory. Recipients must cooperate with Canada in project evaluations, including participating in surveys and providing contact information of involved parties with their consent.
• The National Funders’ agreement outlines procedures to ensure compliance by third parties with their obligations under agreements, including monitoring sub-projects, auditing financial records, providing support to third parties, resolving breaches, and recovering overpayments.
o The National Funders must provide reports of monitoring and audits to Canada upon request. If Canada wishes to audit a third party's financial records, the Recipient must cooperate and take necessary steps to enforce access to records, including legal action if required.
o Additionally, the National Funders must conduct periodic visits and audits to verify claimed costs by Third Parties to ensure that claims incurred were in accordance with their agreement.

Permanent Forum on People of African Descent
• In 2018, Canada endorsed the UN International Decade for People of African Descent, which runs from 2015 to 2024. This initiative, centred on recognition, justice, development, and fighting discrimination, helps the Government build frameworks to empower Black communities and advance our work to combat racism, discrimination, and xenophobia faced by those of African descent. In February 2024, the Government of Canada extended the federal Government’s commitments under the United Nations International Decade for People of African Descent (UN Decade) until 2028.
• During the third session of the Permanent Forum on People of African Descent, held in Geneva from April 16 to April 19, 2024, Minister Khera attended and provided remarks at a side-event, organized by Dr. Jean Augustine, former Minister of Parliament, entitled “Glass Ceiling and Glass Cliffs: Advancing employment, leadership and entrepreneurship for Black women.
• The event discussed the intersectional experiences of Black women in the workplace in Canada, and featured a panel of speakers which included Nadine Spencer, the former CEO of the Black Business and Professional Network.
• As the Government of Canada remains committed to remove barriers resulting from systemic and anti-Black racism, the Minister noted in her remarks, her appreciation for the knowledge and experiences shared by all the panel members during this event.

• As part of the commitments under the United Nations International Decade for People of African Descent, the Government of Canada has invested over $200 million to empower Black Communities through the Supporting Black Canadian Communities Initiative (SBCCI).
• The Black Business and Professional Association (BBPA) is a Canadian non-profit organization that seeks to promote equity and opportunities for the Black community, particularly in the areas of business, employment, and education.
• The Black Business and Professional Association received over $176,000 through investments from the Supporting Black Canadian Communities Initiative through its Capital Assistance and Capacity Building streams.
o A total of $94,250 in Capital Assistance funding was provided by the Department, while $81,875 in Capacity Building funding was provided through SBCCI National Funder Tropicana Community Services.
• On April 24, 2024, Toronto-based entrepreneur Chandran Fernando led a members’ call for the immediate resignation of the BBPA's current board of directors, accusing them of financial misconduct.
• The BBPA members are demanding the disclosure of all relevant documents to facilitate an independent financial and operational audit. The Board of Directors has not yet publicly responded to these allegations.