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WE Charity saw resignations, departures from senior ranks before landing government contract – CBC.ca

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A charity under scrutiny after receiving a contract to administer a $900 million government program has gone through an organizational upheaval over the past few months, CBC News has learned.

The chairs of both the Canadian and U.S. boards of directors for the WE Charity resigned in the spring. The vast majority of the other board members in the two countries have been replaced as well, and staff have been laid off in response to the COVID-19 pandemic.

The flurry of changes began about two months before the federal government announced WE was the only organization in Canada able to administer the multi-million dollar Canada Student Service Grant initiative.

Changes at the top

The reasons for the resignations in WE’s upper ranks remain unclear. The former Canadian chair of the board of directors, Michelle Douglas, tweeted that she resigned on March 27 and that “almost all” of those on the Canadian and American boards resigned or were replaced around the same time. She declined to explain why when approached by CBC News.

An earlier tweet from Douglas does hint at a push for more transparency from the organization.

In April, a tweet from Douglas directed at WE co- founders Marc and Craig Kielburger raised questions about work done in Kenya. WE said it had provided “life-saving #COVID19 prevention information” to more than 84,274 people in Narok County.

“Great work @WEMovement. But what are the details? How is it possible to have managed to reach so many? Such a specific number. Wow! How did you do it? Share info on your efforts so they can be replicated by others!”

Many board members approached by CBC News did not respond to a request for comment. A few indicated that their terms on the board had simply come to an end. But filings with the Canada Revenue Agency show all the board members’ terms were slated to run until Aug. 31.

The WE Charity’s new board chairs say the organization simply sped up planned changes “in order to best position the organization to respond to a predicted multi-year global pandemic.”

That statement comes from a letter from the two new chairs — Canadian Greg Rogers and American Jacqueline L. Sanderlin — which WE shared in response to questions from CBC News.

Most board members have been replaced

The letter states that, as WE was approaching its 25th anniversary, many board members had been in place for more than five or 10 years. The letter says the organization decided to undertake a strategic review to focus on future priorities and to “address issues such as diversity, inclusion and range of competencies.”

WE maintains separate boards of directors for Canada and the United States, but the two boards meet jointly as a “North American Board of Directors.” The letter says that WE reduced the number of spots on its board and replaced the majority of its members. Of the 14 people who made up the North American board, only three remain.

Most of the new board spots “are now filled by persons of colour, including the U.S. Chair,” says the letter.

“Any transformation of this kind naturally invites some challenge. Overall, we believe the renewal process has strengthened the two Boards and will help to guide the organization moving forward.”

First layoffs, now ‘short term’ hires

Around the time board members were departing, WE also began to lay off staff.

Two sources with knowledge of the organization describe the number of layoffs as significant. WE did not answer CBC’s question about the number of staff who have lost jobs.

WE’s operations would have been particularly vulnerable to the effects of the pandemic. One of its most prominent activities is “WE Day” — a series of events that bring together thousands of students to celebrate youth leadership. COVID-19 has made such gatherings impossible.

Charities everywhere have seen donations dry up as individuals and businesses focus on their own financial woes.

ME to WE, the charity’s for-profit sister company, sells international travel packages that promise cultural immersion or volunteer experiences — things like helping to build schools abroad. Most of that company’s profits are donated to the charity.

“Due to the impact of COVID-19, like many others, we were forced to lay off employees, especially from our global service travel and live events division,” WE said in a media statement.

Now that WE is administering the Canada Student Service Grant program, the organization has “invited former staff to apply for open short-term contract positions.”

Hundreds of people will be needed to run the grant program and hiring is still underway, the organization says.

The federal government has said it has “currently allocated” $19.5 million to WE to run the Student Service Grant program; $5 million of that sum is intended for other not-for-profits involved in the program.

The precise amount WE receives, however, will depend on how many students participate. The initial goal was to offer 20,000 placements; as of Tuesday the government said it already had received 28,500 applications.

Prime Minister Justin Trudeau has defended the decision to give the contract to WE. He said WE’s networks across the country made it the right choice and the organization itself won’t make any profit from the contract.

“Quite frankly, when our public servants looked at the potential partners, only the WE organization had the capacity to deliver the ambitious program that young people need for this summer that is so deeply impacted by COVID,” he told reporters Monday.

‘Insulting to our members’

The Public Service Alliance of Canada, which represents some 140,000 public servants, pushed back against that claim.

“Mr. Trudeau’s claim that WE Charity is the ‘only one’ that can administer the new grant program is not only factually wrong, it’s also insulting to our members,” said PSAC National President Chris Aylward. “PSAC members have worked hard to support the government’s rapidly evolving response to the pandemic and remain committed to continuing doing so.”

The Conservatives are now asking Canada’s procurement ombudsman to review the $912 million program. They made a similar request of the auditor general.

“Outsourcing a $900 million-dollar program designed to pay students and recent graduates for volunteer work to a third party raises justifiable concerns and a number of questions,” said three Conservative MPs in a letter to the ombudsman.

They also pointed to five other sole-source government contracts handed out to WE and asked that those contracts be reviewed.

Sophie Gregoire Trudeau on stage during WE Day UK 2020 on March 04, 2020 in London. (Gareth Cattermole/Getty Images)

The Conservatives note that Trudeau and his family have numerous personal connections with WE. The prime minister has appeared at many WE events, while his wife Sophie Grégoire Trudeau is an “ambassador and ally” of WE and hosts a podcast with the group focused on mental health. Trudeau’s mother has also done work with the charity.

WE insists no member of the Trudeau family receives an honorarium for work with the charity, though Grégoire Trudeau has had her travel expenses covered.

Trudeau has not shied away from his connections to WE.

“I have worked with WE in the past,” he told reporters Friday, “because I believe strongly in promoting opportunities for young people.”

Trudeau said he and his family will continue that work in the future.

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Hong Kong freezes listed shares of media tycoon Lai under security law

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Hong Kong authorities on Friday froze assets belonging to jailed media tycoon Jimmy Lai, including all shares in his company, Next Digital – the first time a listed firm has been targeted by national security laws in the financial hub.

Also among assets targeted were the local bank accounts of three companies owned by him, Hong Kong’s Secretary for Security John Lee said in a government statement.

The statement, issued after the market close, said Lee had issued notices “in writing to freeze all the shares of Next Digital Limited held by (Jimmy) Lai Chee-ying, and the property in the local bank accounts of three companies owned by him”.

Lai was sentenced to 14 months in prison for taking part in unauthorised assemblies during pro-democracy protests in 2019.

He faces three alleged charges under a sweeping new national security law imposed by Beijing, including collusion with a foreign country.

The move against his assets was also made under the security law, which criminalises acts including subversion, sedition, collusion with foreign forces and secession with possible life imprisonment.

The decision by authorities to use the law’s powers for the first time to target a Hong Kong listed company could have repercussions for investor sentiment.

There have been signs of capital flight since the law was imposed last June, to foreign countries including Canada, according to government agencies, bankers and lawyers.

CLAMPDOWN

Beijing said it imposed the law on the former British colony to restore order after months of pro-democracy, anti-China protests in 2019.

However, critics say the law has been used by China‘s Communist leaders to suppress freedoms and pro-democracy campaigners – scores of whom have been arrested and jailed, or have fled into exile.

The chief executive officer of Next Digital, Cheung Kim-hung, told the Apple Daily that Lai’s frozen assets had nothing to do with the bank accounts of Next Digital, and that their operations and finances would not be affected.

The firm’s employees pledged to continue to “uphold their duty and keep reporting”, in a statement posted on the Facebook page of Next Digital’s trade union.

Under Hong Kong stock exchange filings, Lai is Next Digital’s major shareholder and holds 71.26 percent of shares that were worth around HK$350 million ($45 million) based on Friday’s closing share price.

The value of the other “property” assets frozen by the authorities was not immediately clear.

Next Digital runs the Apple Daily, Hong Kong’s most influential pro-democracy newspaper that has long been a thorn in the side of Hong Kong and Chinese authorities.

Senior Hong Kong officials have recently warned Apple Daily about its coverage and have spoken of the possible introduction of a “fake news” law. Critics say this is all part of an ongoing crackdown on the city’s media.

The Taiwan arm of Apple Daily said on Friday it would stop publishing its print version, blaming declining advertising revenue and more difficult business conditions in Hong Kong linked to politics.

($1 = 7.7658 Hong Kong dollars)

(Reporting by Twinnie Siu, Jessie Pang and James Pomfret; Writing by James Pomfret; Editing by Andrew Heavens and Gareth Jones)

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Wall St sees chance of higher bid for Kansas City Southern from Canadian Pacific

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Wall Street is expecting Canadian Pacific to raise its offer for Kansas City Southern even at the cost of more debt to win the bidding war with larger Canadian railroad rival Canadian National.

In the latest twist to the takeover saga, the U.S. railroad operator on Thursday accepted Canadian National’s $33.6 billion offer, leaving Canadian Pacific just five business days to make a new offer.

Analysts said Canadian Pacific was unlikely to let go a chance to be the first railway spanning the United States, Mexico and Canada easily even though it had said it would not leverage its books to outbid Canadian National.

“If CP is willing to compromise a bit more on the leverage ratio, it could…match or potentially beat CNR’s latest offer,” Scotiabank analyst Konark Gupta wrote in a note.

It all started in March when Canadian Pacific agreed to buy Kansas City Southern in a $25 billion cash-and-stock deal, but Canadian National topped the offer in April.

Canadian Pacific’s shares have added about 3% since its March 21 offer, while Canadian National has fallen about 9% from its April 20 bid.

This gives Canadian Pacific room to cut down the size of any potential debt that it would need to outbid its rival. As of Thursday’s close, the implied value of its offer rose to $286 per share from $275 per share, according to Gupta.

That is just $39 per share below Canadian National’s offer of $325 per share. To match it, Canadian Pacific would need to stretch its leverage ratio to as much as five times, from about four times currently.

It had a long-term debt of about C$8 billion ($6.61 billion) as of March 31, while it was C$13 billion for Canadian National.

A final outcome for either combination would still hinge on a regulatory approval by the U.S. Surface Transportation Board (STB), which oversees freight rail.

“The true power in this saga remains where it always has been…with the STB,” Cowen analyst Jason Seidl wrote in a note.

Shares of Kansas City Southern were down 1% and Canadian National 3.5%, while Canadian Pacific was up about 1% in early trading on Friday.

($1 = 1.2096 Canadian dollars)

(Reporting by Ankit Ajmera in Bengaluru; Editing by Arun Koyyur)

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Italy lifts COVID quarantine for EU, UK and Israel from Sunday

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-Italy will scrap mandatory quarantine from Sunday for visitors from the European Union, Britain and Israel who test negative for COVID-19, the government said on Friday as it looks to give summer tourism a boost.

With vaccine roll-outs picking up pace in the EU, more countries are looking to ease travel curbs and restrictions on the hospitality sector to help it recover from the pandemic.

“We have been waiting for this move for a long time and it anticipates a Europe-wide travel pass,” Tourism Minister Massimo Garavaglia.

The EU plans to start a unified system recording COVID-19 vaccinations, tests and recovery from June to allow more movement.

People entering Italy from these countries have so far been requested to quarantine for five days and test both before arrival as well as at the end of their isolation period.

Quarantine for other countries, including the United States, is longer.

Entry restrictions on those coming from Brazil will remain in place, the health ministry said.

The government also extended the so-called COVID-tested flights to cover some destinations in Canada, Japan and the United Arab Emirates. There will be no quarantine for those who test negative upon arrival on these routes, as well as on certain flights to Rome, Milan, Naples and Venice.

Although asked to supply a negative swab before travelling, passengers of these flights will be tested upon arrival and, if negative, exempted from quarantine.

Travel between Italy and much the rest of the world has been severely restricted for months as the government sought to contain resurgent coronavirus infections.

However, cases have declined steadily in recent weeks thanks in part to an increasingly effective vaccination campaign.

The national health institute (ISS) said on Friday the “R” reproduction number had fallen to 0.86 from 0.89 a week earlier. An “R” rate above 1 indicates that infections will grow exponentially.

Italy has recorded nearly 124,000 deaths due to coronavirus, the second-highest number in Europe after Britain. As of Monday, 19 of Italy’s 20 regions will be designated as “low-infection” zones and only one as a “medium-risk” one.

Prime Minister Mario Draghi’s government is also due to discuss on Monday easing or abolishing Italy’s nationwide 10 p.m. curfew.

(Reporting by Maria Pia Quaglia and Angelo Amante, editing by Giulia Segreti and Gabriela Baczynska)

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