The charity at the centre of a political firestorm in Canada has announced it will shutter its operations in the country, the latest in a scandal that has placed prime Justin Trudeau at the centre of a parliamentary and ethics investigation.
Citing sustained damage to its brand, as well as the economic effects of the coronavirus pandemic, brothers Craig and Marc Kielburger announced plans to scale down the operations of the WE Charity in Canada. The brothers, who co-founded the charity, also announced they would leave the organization.
“Covid-19 disrupted every aspect of our work,” the brothers wrote in a letter on Wednesday, adding that WE was “in the middle of political battles and misinformation that we are ill-equipped to fight”.
The organization has extensive ties to a number of powerful figures in government, including the prime minister’s family.
In July, WE confirmed that Trudeau’s wife, mother and brother had been paid for appearances at charity events over the years. Margaret Trudeau, the prime minister’s mother and wife of the former prime minister Pierre Trudeau, has been paid nearly C$250,000 (US$182,000) since 2016 – far more than any other family member.
This relationship came under scrutiny after WE was selected to administer a C$900m student-work program in June.
As part of its closure, the organization plans to sell its Canadian assets to help pay for existing operations around the world, including its WE Charity hospital and projects in Latin America, Asia and Africa. The for-profit affiliate, ME to WE, which generates money through retail sales and travel programs and leadership courses, will also continue to operate.
“We saw what was happening to our organization, but also what could happen to our partners and sponsors. So we reached out to them to let them know that we didn’t feel they should be dragged through the process,” Craig Kielburger told CTV News. “And the simple math is now the charity is spending more than it’s bringing in.”
The closure of operations in Canada represents a shocking turn of fortune for the charity. Founded 25 years ago by the Kielburger brothers, WE was initially intended to direct charitable giving to children in developing countries around the world. But in recent years, the charity has become an influential presence throughout the country, known for its high-energy “WE Days”, where students pack stadiums to hear motivational speakers and musical performances.
Under the terms of the student-work program deal, the charity was to be paid at least C$19.5m. Amid questions over a potential conflict of interest, the government and WE Charity said the cancellation of the contract was “mutually agreed” on 3 July.
The scandal also ensnared former finance minister Bill Morneau, who had included more than C$40,000 in travel expenses with the charity. Two of Morneau’s daughters had also either worked or volunteered for WE Charity.
Both Trudeau and Morneau apologized for their conduct in the affair and say they should have recused themselves in the decision making process.
“I wish that, in hindsight, that we had done things differently around the WE Charity,” Morneau said, stepping down from his post as finance minister soon after.
Opposition parties say they will resume investigations into the deal between Trudeau’s government and the charity when parliament returns in late September.