Before joining Toronto-based Avalon, Mr. Syed worked for AER for five years as vice-president of national and international relations, one of its highest-ranking executive positions. In 2019, he was censured by Alberta’s Auditor-General, and the province’s ethics commissioner, for financial mismanagement during his tenure at AER.
The allegations included profligate spending of public-sector funds, secretly setting up a for-profit venture within the public-sector entity and working with AER chief executive Jim Ellis to make sure they both would profit from it handsomely.
The side-venture, called the International Centre for Regulatory Excellence (ICORE), was disbanded about two years after it was launched. In total, approximately C$5.4 million in taxpayer money was misappropriated, investigations by public agencies concluded.
In an interview this week, Mr. Syed declined to comment on any of the specific allegations made around his time at AER. He said his focus instead was on Avalon’s “exciting” future and he would be happy to talk about that. He dismissed the AER controversy as insignificant and inconsequential.
“There was an investigation, it’s old news, the matter was resolved, and there was a finding of no wrongdoing,” Mr. Syed said. “And I refer you to the Auditor-General’s decision.”
When reached for comment by The Globe and Mail, Cheryl Schneider, executive director, engagement and communications with the Auditor-General, confirmed that there was, in fact, no decision by the AG that subsequently exonerated Mr. Syed.
Earlier this year, Mr. Syed was appointed president of Avalon Advanced Materials, a tiny mining exploration company that is attempting to both develop a lithium deposit in Ontario and build a lithium refinery in the province.
The federal government has made it a priority to strengthen Canada’s weak positioning in critical minerals. As part of that strategy, Ottawa is spending C$3.8-billion over eight years to support the industry, and it has doled out tens of millions to junior companies that are trying to build electric-battery metals infrastructure. Against that backdrop, scores of small critical-minerals companies are jockeying to attract a credibility boost in the form of a public site visit from a federal politician,which they hope will lead to funding.
Avalon won such a credibility boost last week by attracting a visit to the site of its proposed lithium refinery by the Federal Industry Minister and Indigenous Services Minister. Both Mr. Champagne and Ms. Hajdu spoke publicly, and posed for photos, as they enthusiastically plugged Mr. Syed’s company.
“You need to bring everyone here,” Mr. Champagne told Mr. Syed in front of the television cameras. “This needs to go viral.”
Mr. Champagne also told reporters that Avalon’s proposed plant is “one of the most promising” he’s ever seen in Canada.
Ms. Hajdu also spoke highly of Avalon, telling media, “We can grow the economy and we can protect the environment together and that’s what this project represents.”
As the event was winding down, Mr. Syed told The Globe that he was in “deep discussions” with the federal government and optimistic he’ll receive fundingfrom Ottawa for the project which has a capital-cost estimate of $850-million.
But given Mr. Syed’s checkered past at AER in such a high-profile public spending scandal, the presence of the ministers at Avalon’s site raises questions about how closely Ottawa is vetting the individuals behind small critical-minerals companies.
Richard LeBlanc, professor of law, governance and ethics at York University, said that it appears that the federal government “dropped the ball” on basic vetting standards, and evidently was not aware of Mr. Syed’s history at AER.
With not one, but two ministers showing up at Avalon’s facility, and talking positively about its future, the company earned a crucial vote of confidence from a key stakeholder.
“This is not someone grabbing your hand at a political event,” Mr. LeBlanc said. “This is something that is contemplated and staged. It’s laudatory.”
It also looks unlikely, he added, that the politicians checked the financial condition of the company, which would have revealed one that is on shaky ground.
In its most recent quarter, Avalon disclosed it is holding less than C$1-million in cash, flagged uncertainty about its ability to raise additional funds, and told investors it is a going concern risk.
Mr. LeBlanc said that neither Mr. Champagne nor Ms. Hadju can pass the buck, that due diligence should be done by the ministers, and they should be peppering their staff with tough questions about Avalon’s financials and its executive team.
“The tone is set from the top, by the ministers,” Mr. LeBlanc said. “You have to have personal accountability.”
Zeus Eden, press secretary for Ms. Hajdu, wrote in an e-mail to The Globe that seeing “as Minister Champagne was leading on the visit, we defer to his office.”
Audrey Champoux, press secretary for Mr. Champagne declined to answer whether Mr. Champagne knew about Mr. Syed’s history at AER.
In an e-mail to The Globe, he downplayed the significance of Mr. Champagne’s visit to the Avalon site. The main purpose of such visits, he said, is to learn more about new or prospective projects, as well as their effects on workers and the community.
“A presence from the minister should not be interpreted as an indication of financial support, or otherwise, for the company,” Mr. Champoux said.
Earlier in his career, Mr. Syed worked in government. From 2001 to 2003, he served as executive adviser to the director of communications for Liberal prime minister Jean Chrétien.
Mr. Syed stepped down from AER in 2019, and shortly after started working as a consultant on government affairs for Avalon. Last year, he was made an officer of the company and, in March, he was promoted to president, and has since become the public face of Avalon.
During his time at AER, the Auditor-General said that Mr. Syed ran up business travel expenses that were far and above what was deemed appropriate. One of his round-trip airfares from Calgary to Copenhagen and London cost C$8,089.
The Auditor-General’s report said that text messages between Mr. Ellis and Mr. Syed showed that many of their international trips were made under the banner of AER, but were actually to conduct ICORE business.