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Merritt-based electric truck company's concerns lead to auditor general investigation

Truck maker blows whistle

Should a company that administers provincial government grants also be offering and soliciting grant application services to grant applicants?

That is the root of concern raised by a nascent electric truck company from Merritt that has found itself in the middle of a controversy over how low-carbon innovation grants are being administered.

“There is definitely a conflict of interest for a grant-writing company to also be a grant-administering company,” said Theron Groff, chief marketing officer for Edison Motors, which is hoping to scale up its electric heavy-duty truck production and had applied for grants to B.C.’s Ministry of Energy, Mines and Low Carbon Innovation, via accounting and business services firm MNP.

On Monday, those concerns led government to announcing it has requested the auditor general of B.C. investigate CleanBC grant administration, including a review of MNP, the firm that both administers certain grants and offers companies services to draft their grant applications.

B.C. Premier David Eby said Monday he generally agrees with Groff’s assertion.

“So, in general, there should be separation between a grant administrator and a company that supports with grant applications,” Eby told Glacier Media.

The issue first arose in the B.C. legislature on April 3 at a public accounts committee meeting. There, BC United opposition MLA Jackie Tegart for Fraser-Nicola called on the auditor to undertake an examination of the CleanBC go-electric grant program for “any potential conflict of interest relating to program administrators charging success fees to successful applicants who use their advisory services.”

In response, on April 5, the ministry reportedly stated there were “no technical violations” from MNP because the grant application services it was offering were not for the grants MNP was administering. And so, at first, the BC NDP declined Tegart's committee request.

Subsequent to the government’s explanation, Edison’s founder and CEO Chace Barber posted a video on social media April 6 to share his experience applying for the grants.

Barber claims Edison is the only company in B.C. building heavy-duty electric trucks and his company applied for a commercial vehicle innovation challenge (CVIC) grant.

Barber said Edison was declined by MNP, which was contracted to administer the grant — one of several other CleanBC grant programs MNP states on its website it administers.

Barber said MNP simultaneously reached out to Edison for a service to apply for other grants, offering Edison a “success fee” of 20 per cent of the grant’s value.

Barber said he raised concerns, in person, with the ministry’s office of possible “corruption” in late February and was “personally annoyed” that Energy Minister Josie Osborne had told opposition MLAs last week she sought evidence of problems in the program.

“We were in her office to talk about these things,” said Barber.

Barber said Edison was then disinvited to a promotional event by Plug-In BC, which is a government-funded lobby group for vehicle electrification.

What was not clear from Barber was whether the grant application services offered were for grants MNP was administering.

Groff, via email, clarified to Glacier Media, “We are unable to speak with certainty on the record about whether MNP offered to apply (on behalf of Edison, for a fee) for any grants that they administer.”

Groff clarified further that Edison has applied for MNP-administered grants while also using MNP application services for another grant.

Regardless of how direct the perceived conflict of interest may be, Groff says there is a problem with the system.

“Would it not be possible to play a ‘you scratch my back, I will scratch yours,’ with other companies that either administer or apply for grants?” asked Groff.

“Also,” said Groff, “how is it at all fair that a company that is being paid by the government to administer grants, can also take 20 per cent of a grant? Is 20 per cent off our carbon tax-funded grant supposed to go to lining the pocket of a grant company?” he asked.

On Monday, Eby affirmed he is seeking to ensure the grant program is operated fairly.

“It's critically important to me and I know, to all applicants and all British Columbia, that when people apply for government funding, that they get a fair shot and then proposals that are chosen are chosen because they're the best proposals.

“So, to ensure that certainty for all British Columbians based on information that's been brought forward to the provincial government, we're ensuring that the auditor general has the resources and tools necessary to independently look at this and make sure that not just in this particular program, but generally, that we're putting in place all safeguards to ensure we're hitting that goal of fairness for all applicants,” said Eby.

On Monday, MNP responded to the developments out of Victoria but said it could not comment on specific applications to grant programs it administers, such as Edison’s.

“We are aware of an allegation that one of our teams working in the province of B.C. in our grant management service line acted in the capacity as both the administrator and grant application consultant on the CleanBC grant program. These allegations are false and misleading,” stated MNP.

“Many firms provide grant administration and grant writing services to assist clients. Professional services firms that provide these services, including MNP, have policies and procedures to address potential conflicts of interest,” said MNP with respect to administration and services related to the same grant.

“With respect to grant application services, small and medium businesses that do not have the internal resources to complete these applications often engage a third party to assist them with their application. Professional services firms, including MNP, can assist clients in their pursuit of federal, provincial, and other grant programs when requested for programs where these firms are not the administrator,” added MNP.

On April 9, the auditor general's office confirmed the investigation request. The office is to "undertake an examination of the administration of grants by MNP LLP under the Advanced Research and Commercialization Program and the Commercial Vehicle Innovation Challenge," stated spokesperson Nicholas Johnson.

Editor's note: This article was updated April 9 with new information.



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