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16 septembre 1998
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Public Accounts -- Wed., Sept. 16, 1998

[Page 1]



10:00 A.M.


Mr. Howard Epstein


Mr. Hyland Fraser

MR. CHAIRMAN: Ladies and gentlemen, good morning. I will now call into session this meeting of the Public Accounts Committee. We had originally hoped to have with us today two witnesses, former Cabinet Minister Bill Gillis and also Ms. Sheila Butler, an employee of the Nova Scotia Gaming Corporation. As you will know, our intentions with respect to calling of witnesses was subject to availability of those witnesses. Ms. Butler was not available today. I gather she may not be available next week either so it may be a two week period before we are able to meet with her in order to talk.

We do, however, have Bill Gillis with us today, in company with his lawyer, Mr. Brian Church. He has indicated that his own schedule allows him to here for an hour and one-half this morning. He hopes we can finish up fairly close upon that time. So we will keep that in mind as we proceed. At the end of our time of talking with Mr. Gillis, we should then turn our minds to the question we started to discuss last week which is how the committee intends to proceed after this. So that is my intention at the end of that time. I will now swear in the witness and we will proceed.

Do you, Bill Gillis, swear that the evidence you shall give to the Standing Committee on Public Accounts touching on matters pertaining to the Nova Scotia Gaming Corporation shall be the truth, the whole truth and nothing but the truth, so help you God?



[Page 2]

MR. CHAIRMAN: Thank you very much. Mr. Gillis, welcome back to Public Accounts. I understand you have an opening statement for us. If you would like to read that into the record, that would be useful and then we will invite the members of the committee to ask questions.

MR. GILLIS: Mr. Chairman, committee members, ladies and gentlemen, before I get into this statement, which is short, I am sure you will here pleased with that. There is a typo. I know how to spell Premier MacLellan's last name. It is Mac. I have known lots of Macs in my constituency and in the province. So it is MacLellan on the third last paragraph on the first page, just for the record.

Mr. Chairman, committee members, ladies and gentlemen, I first of all want to introduce Brian Church, QC. He has already been referred to but with one lawsuit under way and another a possibility, I felt that it would be prudent to be accompanied by a lawyer.

Mr. Chairman, as you know, over the years I have attended a number of meetings of the Public Accounts Committee. I must tell you, however, that this is a different experience, answering the questions or trying to answer the questions, rather than asking them. So there we are. In coming here today, I want members of the committee to know that I do not have any particular axe to grind. I would like to make a brief statement, which I am doing, and afterwards I will do my best to answer your questions.

By way of background, I served as a Minister of the Crown for almost 13 years under three Premiers - Premier Regan, Premier Savage and Premier MacLellan. During that time, I tried to take the broad-brush approach in my ministerial responsibilities. I attempted to deal with policy matters. The administration of these policies were delegated to those who had the expertise to implement those policies.

In my comments today, I propose to discuss the period of time when I was Minister of Finance and then, as a result, Minister responsible for the Gaming Corporation, which was from June 27, 1996 until I retired in April of this year, April 8th. In my brief comments, I want to touch upon three matters and the items are, very briefly, items relating to the financial benefits of the Halifax casino to the province; two, as minister responsible for the corporation, whether or not I was out of the loop; and three, the meeting held on June 5, 1997 at the office of then Premier Savage.

With regard to item one, the financial benefits of the casino to the province, respectfully I suggest that Ms. Sheila Butler, CA, Chief Financial Officer of the corporation is the person to answer your questions. I had understood that she was coming today but I understand that has been put off. You will no doubt have that chance on a future day. She would have the kind of detail that I would never possibly have.

[Page 3]

The second matter I wanted to deal with relates to the allegation by Mr. Fiske that I was out of the loop. The former head of the Gaming Corporation made this suggestion when he appeared before this committee on July 8th of this year. Over the years, out of the loop was not my way of operating. It is was not my modus operandi. My approach was the opposite, to be in the loop as much as I could. In every case, I attempted to have a good working relationship with the deputy minister or agency head as well as other senior staff. As I mentioned earlier, I tried to avoid immersion in too much detail. Instead, consistently, I worked with senior staff to develop various policy options.

Frankly, I felt that I had a good working relationship with Mr. Fiske. Regularly, this gentleman and I met or talked on the telephone. In this regard, I checked my Day-timer for the period January 1997 until September 1997 at which time, as you know, Mr. Fiske left and with the exception of a bit of vacation time, Mr. Fiske and I were in contact on average of once per week, whether it was in person, meetings, or on the telephone. This occurred, notwithstanding the fact that I was very much involved in other duties, as Minister of Finance. For example, the implementation of the harmonized sales tax, the start-up date of which was April 1, 1997 - right in this period we are talking about - plus the preparation, the delivery, which was on April 17th, and defence of the 1997-98 budget.

The third item, there has been a great deal said about the meeting held on June 5, 1997 at the then Premier Savage's office. I want to point out that I arranged the meeting on June 5th. In discussions with Mr. Fiske, he indicated to me, before that date, that he wanted an opportunity to discuss the Halifax casino project with Premier Savage. It was part of my approach to this particular ministerial responsibility, I felt it was important that Mr. Fiske have access to the First Minister. It is a procedure I followed in other ministries over the years where the deputy minister or agency head, whatever, felt they wanted to make sure their views were made known, the pros and cons of various approaches. I did that in the past in other ministries.

Specifically, with regard to the June 5th meeting, in his appearance before the committee on July 8th of this year, as reported on Page 36 of Hansard, I believe Mr. Fiske stated, "He . . .", that is Dr. Savage, ". . . said the casino was Bernie Boudreau's project and he . . .", Dr. Savage, ". . . could not risk public knowledge of the arbitration hurting Mr. Boudreau's chances to win the leadership race.".

That is the quote. I recall the meeting relatively clearly and to the very best of my recollection, Premier Savage did not say anything in relation to the arbitration affecting Mr. Boudreau in the leadership race.

Mr. Chairman, this concludes my brief opening statement. At this time, I will do my very best to answer the questions put forward by the members of committee.

[Page 4]

MR. CHAIRMAN: Thank you very much. I intend to proceed as we have with many of the other witnesses, that is to say, I will go to each of the caucuses for 20 minutes and then we will go back for a second round afterwards of about 10 minutes or so. Mr. Dexter.

MR. DARRELL DEXTER: Good morning, Mr. Gillis.

MR. GILLIS: Good morning.

MR. DEXTER: I must say that, in your opening statement you referred to your length of time in this House and I would be remiss if I didn't say that there is probably nobody in the province that I would like to see a set of memoirs from than yourself, because you have been in some very interesting places at some very interesting times over the life of this province. I hope that when you get an opportunity to pursue that, that you do, because there is lots of information there that I am sure you would add to this province with.

MR. GILLIS: Thank you.

MR. CHAIRMAN: We could invite you to read them into the record at the Public Accounts Committee first. (Laughter)

MR. DEXTER: In preparing for your time here today, who did you speak with, Mr. Gillis?

MR. GILLIS: I spoke basically to Brian Church, who is doing legal work for me, and I mentioned the reasons, but really, other than that, I didn't speak to anyone else. Former Premier Savage called me once or twice to check my memory on that meeting, about what did I hear, what was alleged to be said, but I didn't call him to prepare. Basically to prepare, I talked to Mr. Church and read the transcripts of this august body.

MR. DEXTER: Did Mr. MacKay contact you as well, do you recall?

MR. GILLIS: No, he didn't, to the best of my knowledge.

MR. DEXTER: Mr. Thompson?


MR. DEXTER: I wanted to start, and I think, as you know, one of the points that has been made before this committee deals very specifically with the whole question of the memorandum to the Cabinet that was produced by Mr. Fiske. Are you familiar with that document?

MR. GILLIS: Oh, yes.

[Page 5]

MR. DEXTER: Do you have a copy of it there?

MR. GILLIS: There is a copy in the material that Mr. Fiske distributed to the committee, of which I have a copy.

MR. DEXTER: You note, I assume that you would agree with me, that it says on the top of this document that it was submitted by the Honourable William Gillis?

MR. GILLIS: I will put it this way, as you would know, Mr. Fiske, as chairman, had no right to put documents to Cabinet. Any time documents went, they obviously would require the name of the minister and this was an opportunity to put forward pros and cons. This is one of the reasons I talked to Mr. Fiske. He felt, as you know, very strongly and I worked with him to make sure some of these views, which were somewhat controversial I suppose, were put on a piece of paper. Now it turned out, I guess, that some lawyers felt that it hadn't been, I don't know if it was lawyers, but somebody said that the Gaming Corporation Board itself had not approved this position, and hence it was withdrawn.

But the way I did business was to see that the pros and cons of matters were advanced to Cabinet or Priorities and Planning, whatever the case may be. That is what this was.

MR. DEXTER: So you don't have a problem with the position that Mr. Fiske takes with respect to the preparation of this document? This was a document that you and he worked on, he says, I think, for many days.

MR. GILLIS: I don't have a problem. Like I say, I don't necessarily endorse each statement that is in it, because I wanted Mr. Fiske to have a free chance to express concerns that he had or approaches he might take. But, no. Mr. Fiske basically did the work but I did look at it a number of times, before the draft was completed.

MR. DEXTER: Do you agree that as the minister responsible for the Gaming Corporation, that you in fact had endorsed the decision to go forward to arbitration?

MR. GILLIS: I wouldn't say I endorsed, but coming up to the time before the change was made, it didn't seem an unreasonable approach to me. I didn't have a hard-and-fast view of it. It was one of the many things I was dealing with, think again about HST becoming implemented April 1, 1997, budget preparation, delivery April 17th, there were a lot of things on the go. I worked with people that were charged with the responsibility, Mr. Fiske was not only Chair, but essentially CEO. It seemed reasonable, but then apparently, other evidence came up and it was felt that to negotiate was better than to fight in court, instead of making lawyers rich, to try to get things done. This is what some people say, if you can settle rather than fight in court, you are better off. But I don't know. To answer your question, coming up, it seemed okay to me, but then there seemed to be new information.

[Page 6]

MR. DEXTER: I think you are making the point, you talked earlier about not being out of the loop, and at the same time, you talk about the fact that March, April and May of that year, I assume, were extremely busy months for you. You were preparing for the implementation of the harmonized sales tax, you were in budget preparation, and budget defence preparation, and in this memorandum, there is a section that sets out and says, the Minister of Finance, and in that section, it says, it became clear that during the briefing sessions with the Minister of Finance during the April, May period that Dr. Gillis had not been involved in the discussions related to the proposed terms of settlement.

This was a document that you took forward, surely something that so particularly deals with you, if it were in error, you would correct that before it would go forward.

MR. GILLIS: My position was I wasn't involved in every detail of it, because it is impossible. I had other responsibilities, and I didn't try to run the Gaming Corporation. I tried to take a high-level policy approach to it. Like I said, I allowed Mr. Fiske, who was writing this, to express the concerns he had. I see, you are on Page 10 of this, something to the effect that, had not been involved in the discussions relating to the proposed terms of settlement. Well, as advanced by Mr. MacKay and Mr. MacKeigan, I think it is pretty specific. In fact, I was not present, as you know, it is clearly documented, on the 21st of April when a meeting was convened and discussions were held involving some of the people, including Mr. Fiske.

MR. DEXTER: Were you present at the Cabinet meeting that apparently took place on the 22nd, in which this matter was advanced?

MR. GILLIS: I believe I was. Yes. It was a great honour for me to be a Cabinet Minister, and time goes by so fast, so I didn't miss many Cabinet meetings. I am quite sure I was there.

MR. DEXTER: Do you recollect this matter coming to Cabinet?

MR. GILLIS: Yes. I do.

MR. DEXTER: Do you recollect whether or not a decision was taken?

MR. GILLIS: Yes. I recollect that whatever was decided the previous day was ratified, and then whatever was passed on from there. That is my recollection.

MR. DEXTER: I guess we are going to see the record of that, and that has been requested.


[Page 7]

MR. DEXTER: Just to move on with that memorandum, there were some fairly serious questions, at least in the mind of the Gaming Corporation at that time, about what the cost of this was going to be to the taxpayer. On Page 9, in the proposal for settlement, this memorandum makes it very clear that the Nova Scotia Gaming Corporation did not support the proposal for settlement. Do you recollect that?

MR. GILLIS: I knew, obviously, there were different opinions by the time that meeting was held, and it went to Cabinet, and then apparently the Gaming Corporation was involved between the 21st and 22nd. I thought they were on side with the decision that was made not to litigate or not to have arbitration but to negotiate. It may be that, it is certainly in here, and this is all in hindsight, Mr. Fiske is saying that the Gaming Corporation didn't agree. Well, then again, the whole thing never did go formally to Cabinet, because the Gaming Corporation didn't agree with what was here. It is a pretty complicated and muddy thing.

MR. DEXTER: This is not in hindsight. This is prepared at the time, this memorandum.

MR. GILLIS: It is hindsight compared to the 21st or 22nd of April. It was done in August. So that is hindsight.

MR. DEXTER: And you say that this came back and was routed back to the Gaming Corporation after it had been passed on by you to the deputy minister, right?

MR. GILLIS: Deputy minister?

MR. DEXTER: Is that correct?

MR. GILLIS: Sorry, what deputy minister are you talking?

MR. DEXTER: To Thompson.

MR. GILLIS: Well, it would have been directed from Mr. Fiske and myself towards Cabinet through Priorities and Planning but I understand from reading the transcript that was there that questions were raised with the Gaming Corporation and the board said, look, we don't agree with this. So it never went forward.

MR. DEXTER: I believe that Mr. Fiske's recollection at least is that it was directed back to the Gaming Corporation along with Mr. Merrick's recommendation with respect to its acceptance or rejection of the direction of the shareholder which was the Government of Nova Scotia?

[Page 8]

MR. GILLIS: I don't really know because I wasn't involved in sending it back. Those people that were involved, Mr. MacKay, for example, Priorities and Planning could probably answer and he has already been here but I do know it never did become a document that was dealt with either at P & P or Cabinet. Eventually after a few weeks there was another much shorter memorandum put forward which is also in the material that Mr. Fiske released.

MR. DEXTER: So what you are telling me is that you would allow this document to go forward under your name despite the fact that it didn't represent your opinion?

MR. GILLIS: I tried to emphasize and maybe I am not making myself clear but I tried not to be autocratic in not allowing the head of this Gaming Corporation or a deputy in certain cases to put the pros and cons of certain approaches. Obviously, some of the approaches in there that were turned down were very strongly held by Mr. Fiske. There were also others that we, the government, the Gaming Corporation and the government get a settlement and that is in there too but I wanted them both to be there and let Cabinet have a look at them. That is the approach.

Just like in the other memorandum, if you look at it, that was put in there, it said, look, we're seeking direction from Cabinet. The minister requests direction from Cabinet. That is the way that this was being done.

MR. DEXTER: But in this case this is a Cabinet responsibility of yours and it lays out as part of the disadvantages that the extension that ultimately would be granted would cost the Nova Scotia Gaming Corporation $27 million?

MR. GILLIS: Mr. Fiske has said that. Other people have said that that is not so and it is a break even, or whatever. So, again, he was presenting and, obviously, it turned out I guess he didn't have the support of the other members of the board and that is the reason it was withdrawn but I wanted to give him a chance. He was quite concerned about this and I wanted him to allow this to be brought forward and this was why I worked with him on the draft and I didn't say to him, look, no, we're not going to do it, I'm not going to allow you to put this forward. I thought he felt strongly about it. This thing was kicking around for a long time, nothing was happening, and said, well, here is a way to put it all in front of Cabinet and let them decide. There were a couple of options in there. One was to proceed and one was to not proceed the way that we eventually did go. There were the two options.

MR. DEXTER: What explanation was given to you for the return of this document, if any?

MR. GILLIS: Well, the one that I understood was that it was basically Mr. Fiske's personal views and not that of the board and he was not a law onto himself at the Gaming Corporation. He was chairman of a five person board and the board hadn't endorsed the position he had taken at that point in time. That is my understanding. Therefore, the Priorities

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and Planning staff and from reading the minutes, that is what they apparently said, that apparently this doesn't reflect the opinion of the Gaming Corporation so you better rework it. That is my understanding.

MR. DEXTER: Well, I mean this information comes forward as a memorandum on behalf of yourself and Mr. Fiske and at some point in time it makes its way back to the Gaming Corporation. I guess the question is why is it that someone would ignore what appears to be a memorandum and recommendations from the minister responsible and the head of the Gaming Corporation and decide to take it back to the board?

MR. GILLIS: Well, again, I try to repeat that apparently one of the options and the view of Mr. Fiske was not the view of a board. He was apparently putting forward something that he believed himself, which he may or may not have been right, but it really isn't the way, if you're a chair of a board, that you just on your own take a position and bring it forward.

So, apparently they felt that it wasn't the accurate position of the board notwithstanding that it was in a draft or a memorandum that was sent on but never was dealt with. It is a different thing, I think if we were dealing with a memorandum that was dealt with by Priorities and Planning and dealt with by Cabinet and passed, that is one thing but that is not the case. It was never debated in Cabinet.

MR. DEXTER: This particular memorandum?

MR. GILLIS: No, because it never got there.

MR. DEXTER: Right, and you pointed out that this was prepared after the meeting of April 21st and after the Cabinet meeting of April 22nd?

MR. GILLIS: Yes. It was prepared in August.

MR. DEXTER: That's right. So at this point in time the deal still has not been ratified and Mr. Fiske asserts in his testimony that even as late as August, when this is going forward, that you're advising him that Cabinet probably won't ratify what he refers to as the Boudreau deal?

MR. GILLIS: I don't think I said that. I just said, here, you put the case on a piece of paper and I'll put my name on it so it will go to Cabinet for discussion. But with discussions, I understood, between Priorities and Planning, and Mr. Fiske, it was determined it was not the legitimate opinion of the Gaming Corporation and, therefore, it didn't go forward.

[Page 10]

MR. DEXTER: In his testimony here last week Dr. Savage talked about what the ramifications of this arbitration were for the Gaming Corporation and for the Province of Nova Scotia. He said it was his opinion at that time that ultimately this could result in the loss of the building of the permanent casino. Had you come to that conclusion?

MR. GILLIS: I don't know if I ever did but one of the frustrations I had as minister is things seemed to drag on and on and on and on. We weren't getting anywhere and time was going by. With the requests being made for extensions and all the arguments about who is in and who is out of money, it just seemed, one way or the other, you should either arbitrate it and get on with it or negotiate it and get on with it. It just seemed it was getting nowhere.

MR. DEXTER: But in this case there was a commercial arbitration that was set for April 22nd. It was going to go forward and it was going to conclude this matter definitively and, in fact, it would conclude it in all likelihood far before the date on which it ended up being concluded, which was many months later in September 1997. If you wanted the matter dealt with and over with, the opportune thing to do at that time was to simply let the arbitration go ahead, wasn't it?

MR. GILLIS: That certainly was an option and, like I say, coming up to it, it didn't seem unreasonable to me, but apparently new information was made available. I think you had Mr. Merrick and Mr. [Carl] Holm here and Mr. MacKeigan - I don't know if he has been here or not, I guess he has - and they had indicated that it would be better to go the negotiation way rather than arbitration. So the meeting was held, the decision was made, it was brought to Cabinet and then we went from there.

MR. DEXTER: Mr. MacKeigan in his submissions, in fact, says that up until the time of the meeting on April 22nd, he felt that the Gaming Corporation was in a no-lose situation and, in fact, he puts that in a letter as late as August 20th and says that it wasn't until well after that meeting that Mr. MacKeigan raises additional questions. At the time of the arbitration, the opinion of the solicitor for the Gaming Corporation was that they couldn't lose the arbitration.

MR. CHAIRMAN: I think that was Mr. Merrick.

MR. DEXTER: That was Mr. Merrick.

MR. GILLIS: Like I say, arbitration might have been the way to go but the meetings were held. Mr. Fiske was at the meeting. A decision was made. Mr. [Carl] Holm and Mr. Merrick, who were the solicitors, reporting directly to the corporation were part of the agreement and that was the decision. I didn't have any strongly-held views on it. This thing was drifting and not getting anywhere. Let's get on with it and then this was the way to go, negotiate and get on with it. Eventually they did start construction and what not, although there's not a lot of activity right down there this morning I don't think.

[Page 11]

MR. DEXTER: But you were the minister at the time?


MR. DEXTER: And what is being told to you by the lawyer on behalf of the Gaming Corporation is that they can't lose this. They can't lose it. If you're briefed on the position of the Sheraton, the position of the Sheraton as contained in Mr. Merrick's documents is not that the casino is ever going to stop in its construction. Their brief says that the only thing they were looking for was an extension of time which is ultimately what they got as a result of the decision to reach the terms of settlement that were reached. You have a professional architect who was engaged by the corporation and his recommendation in Merrick's documents says that at absolutely no juncture did the Sheraton Corporation comply with its responsibilities under the terms of the contract. Why, knowing all of that, do you just not go ahead with the arbitration?

[10:30 a.m.]

MR. GILLIS: Well, you will appreciate, I was the minister responsible but ultimately, the terms of settlement and so on are approved by Cabinet, as a whole. I don't run the show, as you would appreciate. That is the way it works. The Premier, as in other files, took an interest, as his own testimony indicates, whether it be Pharmacare, you name it. He has been involved with briefings and budgets and all the rest of it. The Executive Council Office was involved and they had advice and a decision was made. Like I say, I had lots of other things to work on so I felt that it would work this way as well as the other way. So I didn't feel as Mr. Fiske felt. He had his views. You don't always get your own way as a minister or maybe as a deputy or a department head.

MR. DEXTER: I see I have been given the time sign.

MR. CHAIRMAN: We will move now to the PC caucus.

MR. JOHN LEEFE: Mr. Chairman, I, too, would like to welcome my former colleague, Mr. Gillis, back to this Chamber. We all have new experiences in life, and as he has already remarked, this is a new one for him. I know that he had a very fine reputation as chairman of this committee and I am sure that he wants to do his very best to assist the committee in its deliberations today.

My recollection, Mr. Gillis, is that you and Mr. Fiske were both elected to the Legislature in the fall of 1970.

MR. GILLIS: We were elected on the same day.

MR. LEEFE: Yes, and you both served in Premier Regan's first Cabinet.

[Page 12]

MR. GILLIS: Yes, we did.

MR. LEEFE: Although Mr. Fiske did leave Cabinet prior to the 1974 general election.

MR. GILLIS: I believe Mr. Fiske resigned from Cabinet during roughly say 1973, something like that.

MR. LEEFE: Did you know Mr. Fiske prior to your both coming to this place?

MR. GILLIS: I don't believe I did.

MR. LEEFE: But at least since 1970, you both would have had a relationship; it would have varied, from time to time through the years, particularly after Mr. Fiske left Cabinet, but I would assume that when you met Mr. Fiske in your capacity as the minister responsible and his capacity as the chairman, it was not the first time you had seen each other since he had left Cabinet in the early 1970's?

MR. GILLIS: Oh, we knew each other and, as I indicated in my statement, I felt that we had a reasonably good working relationship. But, like I say, everybody has their own approach as a deputy or a head of a department and the approach he would have taken in that department was different than other people that I worked with - Bob Moody, Gordon Gillis, Bill MacDonald, you name it, John Smith, you name it, over the years, Doug Parks, Everett Mosely. I can go back, way back.

MR. LEEFE: So you and Mr. Fiske have known each other for . . .

MR. GILLIS: Adam wasn't on that list, by the way.

MR. LEEFE: You and Mr. Fiske have known each other for these past 28 years and from time to time have probably had the occasional social contact, as any of us would; you and I with each other outside the House, as former colleagues.

MR. GILLIS: To be honest, I didn't see a lot of Mr. Fiske over the years. Maybe in one of his businesses, I might have, if he were involved, it may have been the Dresden, the Heather, I might have seen him but, you know, we didn't socialize together.

MR. LEEFE: You didn't play cards every Wednesday night?


MR. LEEFE: Okay. I have heard Mr. Fiske described - and this is certainly my experience of Mr. Fiske, it is perhaps not quite as close as yours as a consequence of your having worked directly with each other in the two capacities, first as a Minister of the Crown

[Page 13]

and then in his capacity with the corporation, but I have known him as a person who I have met around here from time to time. I have always subscribed to the assessment of him as an honest and forthright person who holds himself to very solid standards with respect to both his personal and his public conduct. Would that be your view of Mr. Fiske, in the relationships you have had with him?

MR. GILLIS: Well, he seemed to be an upstanding person. I never had any reason to question his personal integrity.

MR. LEEFE: You have quoted for us the statement made by Mr. Fiske on July 8th at the meeting here in the Chamber with respect to the June 5th meeting, and I am referring of course, to the quote, "He . . .", that is Dr. Savage, ". . . said the casino was Bernie Boudreau's project and he . . .", Dr. Savage, ". . . could not risk public knowledge of the arbitration hurting Mr. Boudreau's chances to win the leadership race.". Then you go on to say in your opening statement, "I recall the meeting relatively clearly and to the very best of my recollection, Premier Savage did not say anything in relation to the arbitration affecting Mr. Boudreau in the leadership race.".

The statement that Mr. Fiske attributes to the former Premier strikes me as a very provocative statement, if in fact it was made, and that is what we are trying to come to grips with, as you would appreciate. It strikes me that it is so provocative that had I been in attendance at that meeting, I think I would remember yes or no, it was or was not said. Can you help us move any further beyond your words, to the very best of my recollection, to a definite yes or no?

MR. GILLIS: I don't have a photographic memory.

MR. LEEFE: It's pretty good.

MR. GILLIS: Well, it's not bad. I have said I am quite sure it wasn't said. But I don't think it is fair to the committee or fair to the public for me to say absolutely that it wasn't, but I am almost certain it wasn't said. I think I expressed it there. It just wasn't said, to the best of my knowledge.

MR. LEEFE: Not in your presence?

MR. GILLIS: Not in my presence, to the very best of my knowledge.

MR. LEEFE: Did you arrive at the June 5th meeting before Mr. Fiske, at the same time or after Mr. Fiske arrived?

[Page 14]

MR. GILLIS: I can't recall that detail. As far as I know, we would have arrived at roughly the same time, but I really don't remember that. I did point out, I arranged the meeting. It was again another attempt to make sure that the Premier, in this case, was up to speed and aware of Mr. Fiske's strongly held views on this matter. But no, I can't remember. I don't particularly remember going to or missing or coming late or anything like that, I was there on time as far as I know.

MR. LEEFE: Do you recall if you left the meeting prior to or about the same time or after Mr. Fiske's departure?

MR. GILLIS: To the best of my knowledge, I would have been there until the meeting was over, and would have left roughly at the same time. I might have stayed, for example, with the Premier, or whoever I might have been meeting with, but I am quite sure I didn't leave before Mr. Fiske.

MR. LEEFE: You are more sure that you didn't leave before him than you are sure that you didn't arrive?

MR. GILLIS: I would say that as far as I know, I was there for the whole meeting. It is like the polling, 99 times out of 100 or 95 times out of 100, whatever. I was there for it all, as far as I know.

MR. LEEFE: Of course, if your recollection is not 100 per cent accurate, and recollection sometimes is and sometimes isn't, there is always the possibility that such a statement could have been made in your absence. Neither you nor I know that.

MR. GILLIS: To the best of my knowledge, I was there for the whole meeting. To the very best of my knowledge, no such statement was made while I was there, but I can't speak about whatever discussions Dr. Savage or Mr. Fiske might have had before or after, be it an hour or days, either one way or the other, but I wasn't there.

MR. LEEFE: We have established that Mr. Fiske is a person who is honest and forthright, and it is your clear recollection now, or your best recollection, that you were there for the full time that Mr. Fiske was there; yet, Mr. Fiske has told us that Premier Savage tied the fortunes of the casino project to Bernie Boudreau's leadership aspirations. You tell us that no such statement was made, to the best of your recollection. Why would a man of high moral rectitude under oath say that such a statement was made, when in fact, in your experience no such statement was ever made? I can't understand it. You have known him longer than I have, can you fathom that?

MR. GILLIS: I can't answer the question. I just don't know. I suppose that is why there are people like Mr. Church and Mr. Epstein and Mr. Deveaux and Mr. Dexter that are in law, and why there are courts and judges, to try to ferret out. I am sure this is not the first

[Page 15]

time that there has been evidence given about a certain matter that is diametrically opposed. I can't explain it. I can't attribute any motives to Mr. Fiske. All I know is what I know. There you are.

MR. LEEFE: I will pass on, Mr. Chairman, to my colleague.

MR. CHAIRMAN: Mr. LeBlanc.

MR. NEIL LEBLANC: Mr. Gillis, maybe I could ask another question in regard to that meeting. I think that if I recall Mr. Fiske's testimony, he made mention of the fact that the Premier had been gotten at; I guess the assertion was that someone from the Sheraton had been lobbying the Premier's Office to intervene. Can you speak in regard to that comment?

MR. GILLIS: I frankly don't recall that. I know that both of them have talked about it, but I frankly don't recall the gotten-at thing either, to tell you the truth. Like the other matter that your colleague raised, it is something that you would certainly tend to remember, but I didn't remember the first allegation about helping the arbitration and Mr. Boudreau, and now on this, I didn't remember that. But whether that was said in my absence somewhere, I don't know. I don't recall it being said in my presence.

MR. LEBLANC: You were saying in your testimony that you had read Mr. Fiske's testimony, is there much of that that you agree with?

MR. GILLIS: Is there much of it I agree with? It is like everything. There are matters like that, like on the allegation against Dr. Savage and other things, whether I believe it or not, I know how relevant, but the honourable gentleman thing, I never heard anything about that. That was something that seemed very different, I never heard anybody, he never mentioned it to me, to my knowledge. We met or were talking all the time. There were some things in there, but I didn't try to do an analysis to check which seemed credible and which didn't.

MR. LEBLANC: The memorandum that you signed, that Mr. Fiske reports that you and he together prepared and it was sent on to Cabinet, you mention that it was sent back. Was that sent directly to Cabinet or was that sent to P & P?

MR. GILLIS: I believe, as was normal, it was sent - I believe it went to P & P.

MR. LEBLANC: You made mention that P & P sent it back because of the fact that the board of the Gaming Corporation hadn't ratified it, is that correct?

MR. GILLIS: That was my understanding. It is in the testimony that P & P . . .

[Page 16]

MR. LEBLANC: How would P & P be aware of that? If I recall, in my previous experience, when it is sent forward to P & P, it almost appears as if someone didn't like the memorandum - and I am just trying to understand this - they didn't like the tone of it, didn't like the direction of it and wanted it re-established. I'm not sure how P & P would be aware of the fact that this wasn't prepared from the board, because it was signed by the minister, would have been signed by the chairman of the board and ratified. Can you explain that?

MR. GILLIS: It is my understanding that it is quite a normal practice under Priorities and Planning that there would be discussions between officials of P & P and the department or agency involved about what they were putting forward, so they would understand when they are writing a critique or whatever, it is in the testimony. If we check the records here, somebody said that when officials - and there may even be a name mentioned - called and talked to officials at the Gaming Corporation, it was then determined that the Gaming Corporation board had not ratified the position that was being advocated so strongly by Mr. Fiske. That is my understanding.

MR. LEBLANC: You also mention the fact that you are a hands-on politician. I can't remember the exact quote you used in your testimony here . . .

MR. GILLIS: I tend to be in the loop, rather than out. As you may know, I have worked at my job, whether it was 15 years in purgatory (Laughter) I mean in Opposition, or in my constituency or things like that. I tried to do the same as a minister.

MR. LEBLANC: Purgatory, that's a good word.

MR. GILLIS: It may be old-fashioned these days, but there it is.

MR. LEBLANC: Can you explain to me, in any of the other issues that you have been involved with, have you had the Premier's Office intervene to the extent that they have intervened in this one? The fact of the matter that there was a personal involvement from the Premier's Office, there was a hiring of a solicitor from the Premier's Office, and you were involved with other contentious issues such as the HST implementation which is a very serious policy question for this government.

Can you explain why there was interference, involvement, or whatever term you want to use, from the Premier's Office, specifically to this issue?

MR. GILLIS: All these things are like a continuum and it depends on the situation. The Premier's Office - the buck stops there with the Premier and sometimes they get more involved than in others.

[Page 17]

On the HST, since you mentioned it, certainly I was required and my senior officials to do a number of briefings, not just to P & P and Cabinet but to the Premier. Also, another example would be the offshore. I mean, as I recall over the past five years, the Premier's Office was so concerned that eventually the responsibility came under the Premier.

I don't think it is anything unusual that the Premier, on a matter of a $100 million construction project and the casino, and the relationship with ITT Sheraton would become involved. I don't think it is really out of the way, given the experience that I have had. That is only in my own bailiwick and I'm sure there might be other examples elsewhere.

MR. LEBLANC: So you're saying that $100 million construction was a concern that the Premier got involved into it.

MR. GILLIS: Well, I . . .

MR. LEBLANC: Just before you answer, if you wouldn't mind, is it your understanding that the heart of the arbitration was whether or not the construction of the casino would take place, a permanent casino? Is that your understanding of it?

MR. GILLIS: I wouldn't necessarily say that but I think one of the concerns in relation to arbitration versus negotiation was, when is this thing going to get moving when it is supposed to be? There are dates set to have a permanent casino done. They keep getting shifted and let's get a decision and get on with it. I don't know if - I can't answer that because that is more a question for Mr. Merrick and Mr. [Carl] Holm who are senior counsel advising the corporation. I can't answer that.

My broad view of the broad brush approach was, look, this was going on and on, and time was passing. The $100 million guarantee was being paid but at some point that's over and you want to know if you're going to have the casino, if that decision was made to have it, so let's get going with it. I don't know if it was anything that was crucial to the arbitration but that was part of it, just delays.

MR. LEBLANC: Well, as minister responsible - and I know as you sit here today that you take all your responsibilities very seriously, Mr. Gillis - I want to go back to the point I just brought up. Was it your understanding that the arbitration was the whole question as to whether they would proceed with the permanent casino?

I am bringing the point up because last week, Dr. Savage mentioned that that was the reason that they had to go to negotiation because the whole thing was up in the air and we had to get it going. Perhaps you could just think of that one more time and answer that question again.

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MR. GILLIS: Well, I think I tried to answer it. I think there was more to it than just building the casino because there were other disputes on rents and other matters, financial matters in some detail - I'm sure Ms. Butler can tell you all about them - in dispute between the Gaming Corporation and Sheraton. I think the construction, the delays and not getting on was part of it.

I cannot definitively answer that because you had Mr. Merrick, Mr. [Carl] Holm and these other people, Mr. MacKeigan - and again, as I say, I was doing other things at the time and I didn't spend all my time and I didn't have the time.

MR. LEBLANC: I think, in retrospect - I believe that the testimony that Mr. Merrick gave said that the construction of the casino was not an issue. It was more the other matters that there were there.

MR. GILLIS: That may be true.

MR. LEBLANC: I go back to the fact that the Premier intervened, his office intervened, whether it was Mr. MacKay or whether it was Dr. Savage directly. Mr. MacKay was the person who made the intervention. They hired Mr. MacKeigan. Were you notified of that happening before it occurred?

MR. GILLIS: I do not believe I was. I became aware that he had been engaged but, I mean, it is not unusual. I'm sure consultants are hired - whether it be lawyers, engineers or whatever - for various reasons by the Premier's Office and with all the demands in the Premier's Office, they did not necessarily tell me in advance.

MR. LEBLANC: Mr. MacKeigan was hired - it was my understanding - and I think the mention of $10,000 was paid for his services. Is it your understanding - did he provide legal opinion to yourself as minister?

MR. GILLIS: He did not report to me. He was engaged by the Executive Council.

MR. LEBLANC: I think Mr. MacKay's comment made mention that he basically was hired to give his advice to the Premier's Office as to how we could bypass arbitration and have a negotiated settlement.

We asked the Premier last week - and I know I am getting at the end of my time and I just want to maybe get your opinion on it. By bypassing arbitration they basically gave in on all the major points that the Sheraton wanted. I go back to the point as to what advantage it was for the Province of Nova Scotia to bypass arbitration and have a negotiated settlement whereby we gave all the points that they were looking for? The arbitration was going to happen the day after the intervention came from the Premier's Office. What were the

[Page 19]

advantages to the province to have a negotiated settlement when the construction was not at risk and the fact of the matter that we gave up on all the points that the Sheraton was asking?

MR. GILLIS: First of all, I don't think it's true and there are others who have testified that the Sheraton didn't get everything they wanted. Now, that may be presented by certain people in certain testimonies but I mean it is obviously quite muddy whether they got what they wanted or didn't get, or if it was a saw-off, or whatever, but it would seem to me, as I said earlier, part of it was that this thing was going on and on month after month and nothing was happening and this was a way to deal with it. Arbitration, as I indicated, was one way to do it. I didn't disagree that that was a possibility but also, with advice apparently, there was another way and that's what happened and the terms of settlement were signed.

MR. CHAIRMAN: We should move now to the Liberal caucus for continuation of questioning. Mr. Fraser.

MR. HYLAND FRASER: Thank you, Mr. Chairman. Welcome, Bill.

MR. GILLIS: It's good to be here. It's good to see my MLA in action.

MR. FRASER: I'm going to go back, Bill, to the relationship you had with Ralph Fiske during your term as Minister of Finance when he was Chairman of the Gaming Corporation. What was your relationship? I know you did testify that he talked to you and you to him I guess once a week or so. Can you just briefly elaborate on that?

MR. GILLIS: It was a business relationship, just as in Finance, Mr. Moody was my deputy, Mr. Fiske was my deputy, or agency head in that case, and we had a businesslike arrangement where we tried to meet and discuss matters and it, obviously, wasn't just matters relating to the casino and the Sheraton. There was aboriginal gaming. There was the proceeds of monies going to charities from the Sydney casino. There was Atlantic Loto where Nova Scotia was trying to get their fair share on all this stuff. So we met. Mr. Fiske would suggest agendas. I would suggest agenda items and we would meet and discuss these things. We had a businesslike relationship.

MR. FRASER: Would he want to seek your opinion on certain things that he was thinking about or would he be asking you, do you think I should proceed this way or that way, or would he just report on negotiations going on, that sort of thing?

MR. GILLIS: I think we had some give and take. I think he talked, depending on what it was, Atlantic Loto, on how to proceed to get Nova Scotia's fair share and this is what I think. Do you think this is a sensible way to go? We would talk about it. I would give him my view. I wasn't the final authority, I didn't hold myself out as the final authority but we discussed it and, you know, met as I said as necessary.

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MR. FRASER: If you didn't agree with something he was wanting from you in a specific item, or whatever, what was his cheer if you said, well, I don't think this is what you should do in this case?

MR. GILLIS: Well, I never try to judge people on their cheer or their humour but, you know, I think it's fair to say Mr. Fiske, given his background as a successful businessman I believe over the years and I think he was chief executive officer and president of his own companies, I think he tended to make decisions. I'm not sure that being in government was just his favourite way of doing business and maybe the facts were so involved and you had to consult with P & P and Cabinet, you know, was a little bit difficult for him. I think it might have been reflected back in the 1970's when he had concerns at the time, I think it was over Sydney Steel. I don't remember the details. He had strongly-held views and, again, it might reflect the fact that Mr. Fiske has his way of doing business, which all of us do.

MR. FRASER: When he would bring something to your attention, did you get the feeling it was from the board or would it be specifically on his own?

MR. GILLIS: Well, I had always assumed it was from the board. That's the way it was set up and he was the chair of the board. I assumed over the years, or at the time, that it was from the board, not some personal approach of his.

MR. FRASER: So you always had the feeling when he would bring something to your attention that basically he was speaking on behalf of the board and not necessarily on his own?

MR. GILLIS: Yes, you know, he was coming to me as chairman of the board and acting CEO, I assume that was the approach, that he had the approval of his fellow board members.

MR. FRASER: Yes, Bill, you've been in government for many years and you testified I guess for 13 years in Cabinet and your approach to ministering was the broad brush approach, trying to keep a finger on everything. Through the time did you ever have any concerns that things may not have been going well at the casino or did you just as part of your day-to-day work feel comfortable with what was going on there?

MR. GILLIS: One of the concerns I did have was delays, that it didn't seem that we could get decisions. It seemed hard to get decisions and get on with the matters, to solve disputes and, you know, any time you have partners, as there were partners in this case, I mean you do have disputes but it seemed very difficult for these disputes to be solved.

MR. FRASER: On the April 21, 1997 meeting between Dr. Savage, Mr. MacKay, Mr. Fiske, Mr. [Carl] Holm and Mr. Merrick, Dr. Savage has testified that that was a briefing session concerning the arbitration. Were you there? Were you invited?

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MR. GILLIS: No, I was not there.

MR. FRASER: Why wouldn't you be there?

MR. GILLIS: My job as an elected official is multifaceted. The most important part of it, as you know, is representing the 20,000 citizens of Antigonish Town and County. I live in Antigonish. I lived in Antigonish during the period that we're talking about and each Monday morning was set aside and appointments set up with individuals, or groups, who had concerns about government. I tried religiously to be present on Monday mornings with my constituents. It is all too easy, gentlemen and ladies, I tell you, to make excuses and say, well, look, I have to be at the big meeting somewhere and not pay attention to your primary responsibility. So in that particular case I was aware in advance there was a meeting coming up. I think I heard it maybe before the weekend but I told the Premier's Office that because I had meetings scheduled and my commitments and I couldn't be there. I assumed that Mr. Fiske would be there and it would be looked after, that they didn't need me at that particular meeting.

MR. FRASER: Mr. Fiske has testified that while Bernie Boudreau was Minister of Health and Chair of Priorities and Planning he remained very interested and involved in the casino file. How would you describe Mr. Boudreau's involvement in that file once he had taken over the Health portfolio?

MR. GILLIS: I asked Mr. Boudreau for a briefing at the time I took over Finance and the Gaming Corporation. It was a personal request. I made a request that I would like you to tell me what is going on so I'll know and not go in blind and we did that but, aside from that, that was it. I didn't particularly notice him being intrusive into the responsibility that I had. He had lots to do. He had the biggest budget of all and, as you know, there's been a controversy or two relating to Health over the past few years before Mr. Boudreau left politics. So I didn't think he was looking for something to do, twiddling his thumbs. He wasn't on my turf that I was aware of.

MR. FRASER: So he wouldn't have been involved in April 1997? At the time of arbitration he wasn't involved?

MR. GILLIS: Not that I know. He wasn't involved with me, that's for sure but he was also getting into the leadership race at that time. So I think he had plenty on his mind and around that time he left Cabinet anyway.

MR. FRASER: Thank you, Bill. Mr. Chairman, I can pass it on to my colleagues here.

MR. CHAIRMAN: Mr. MacKinnon.

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HON. RUSSELL MACKINNON: Thank you, Mr. Chairman. Mr. Gillis, it is good to see you again. As I was just waiting my turn to ask some questions I was reading through this document that was supplied by Mr. MacIntosh, Mr. Fiske's lawyer, and I guess it is refreshing to see how a solicitor for a client can be so helpful for the Public Accounts Committee by providing a list of a potential line of questions for all members of the committee. It is rather unusual when you consider that individual is the same one who is suing the government.

Mr. Gillis, Mr. Fiske on a previous date had indicated that the government interfered with the Gaming Corporation in his attempts to negotiate with Sheraton and yet the evidence that has been provided by every other witness that has come before the committee has suggested that Mr. Fiske had asked the government to intervene and that seems to be your testimony today. So that would conclude that at no point in time you were out of the loop as Mr. Fiske has suggested. Is that correct?

[11:00 a.m.]

MR. GILLIS: Well, a couple of examples would be, to try to keep Mr. Fiske informed and into the loop, was the request for the meeting on June 5th, which I helped to facilitate, and also, I helped to facilitate a meeting with the new Premier MacLellan in July, after he was sworn in. Again, it was an effort to work with Mr. Fiske to make sure that the Premier in each case was familiar with the issues and the concerns that he had as chairman.

MR. MACKINNON: On July 8th of this year, when Mr. Fiske appeared before the committee, I believe he made the quote, with reference to Mr. MacKay, and the quote indicated that, ". . . Mr. MacKay had the audacity to tell Minister Gillis that he didn't need to know what was going on with respect to the Sheraton negotiations.". Do you recall Mr. MacKay ever making such an observation?

MR. GILLIS: I read that and reread it a number of times. I frankly don't remember it and I don't know what meeting is referred to. There may have been such a meeting, and it may have been said, although I think I would have remembered it, but I don't remember the meeting involving Mr. MacKay, Mr. Fiske and I to start with, aside from the alleged comments. I am not aware of it.

MR. MACKINNON: Yourself personally, did you ever feel excluded by Mr. MacKay or anyone else involved in this entire process?

MR. GILLIS: No, I didn't feel excluded. Like I say, I had lots of work to do and I was working on these other matters. They wanted a briefing, they had the briefing. I was at the Cabinet meeting the next morning relating to the same matter. I continued to meet with Mr. Fiske. Nobody is perfect. I suppose in an ideal world, you would never miss anything. I would have scrapped my constituents, say, you figure out your own problems, you don't need

[Page 23]

me as your MLA and I would have been up here. Come up Sunday night, drive up, and be all gung-ho with my ministerial responsibilities, I didn't do that. I stayed in Antigonish and came up. But I didn't think that was a grievous sin.

MR. MACKINNON: You testified that when Mr. Fiske would approach you on certain matters, let's say that memorandum, you presumed that these representations were because he was speaking on behalf of the board as a whole, but yet, indications from testimony of Ms. Gordon and so on seem to indicate that Mr. Fiske was doing things on his own. Perhaps it is an unfair question for you to try . . .

MR. GILLIS: I have been asked unfair ones before.

MR. MACKINNON: . . . to guess as to what Mr. Fiske's rationale would be, because I have sat here and I have listened right from day one. He has suggested that ministers have interfered, but yet in his own testimony, he has indicated that he asked ministers to participate in the process. He has indicated that he signed an affidavit of confidentiality, sworn secrecy, and yet, he tables all these documents from the Gaming Corporation, and so on. He indicates that he is speaking on behalf of the Gaming Corporation, and yet the evidence seems to point to the contrary. Did you have any sense that this is what you were dealing with, contradictions?

MR. GILLIS: No. Not really. I certainly don't want to imply any motives to why he might have taken those approaches. Like I said, I had a reasonable working relationship. I knew Mr. Fiske's style. It was different from other styles that I had worked with, different agency heads and departments, but I wasn't really aware of this. It is more in hindsight that it has come out that maybe in the case of the memorandum that it was his view more than the board's view.

MR. MACKINNON: I guess in summation, how would you describe your role in the casino file during your entire tenure as Minister of Finance?

MR. GILLIS: I tried to do as I have always done, a workman-like job on it. I did what I had to do. I stayed in regular contact with the person responsible. I reported to Cabinet as necessary. I brought forward documents when required to ratify terms of settlement or a memorandum to discuss what they should be. To be honest, it wasn't the be-all and end-all for me. I wasn't enthralled totally by gaming, and it wasn't something that I dreamed about and would be thinking about going to Las Vegas or something. I had a job to do, I was the Minister of Finance and with that Minister of the Gaming Corporation, and to the best of my ability, I did the job as best I could.

MR. MACKINNON: One final question. Mr. Fiske has suggested that the cost to the Nova Scotia taxpayers was somewhere in the vicinity, I am not sure of the exact figure, of $25 million or $30 million. Would you agree with that assessment?

[Page 24]

MR. GILLIS: I don't honestly know. I know that, reading the transcript and all the rest, there are views that it is neutral or maybe it was even the other way. I think that is a matter, if Ms. Butler is coming on a future day, I think she would be better to answer those questions than I would be, because there is a lot of numbers thrown around, and I don't think it is anything like that, but I don't honestly know.

MR. MACKINNON: Simply put, as Minister of Finance, you weren't aware of any $30 million loss?

MR. GILLIS: No. I wasn't aware of it, but again, I wasn't into all the details.

MR. CHAIRMAN: Mr. Samson.

MR. MICHEL SAMSON: Mr. Gillis, back to the memorandum prepared for Cabinet, which was prepared but never actually submitted. Mr. Fiske, in his testimony before us, has claimed that the memorandum was personally drafted by himself, Sheila Butler and you. He claims that actually you were, ". . . intimately involved in the specific drafting of the document.". Is that accurate?

MR. GILLIS: It has been my style in terms of something that has my name on it to not just rubber stamp it. I did take time to try to make changes in it, the way things were presented, the grammar, and other things. But again, I think the basic thrust of it were those presented by Mr. Fiske, the basic options. He was the one that developed them and put them forward. The answer is yes, I spent time looking it over, it wasn't just rubber stamped and my name typed on it.

MR. SAMSON: Would you agree with the assessment that you were intimately involved, which seems to go more toward the idea that you sat down there with him and said, let's put these ideas together, you and I, Ralph, and put them down on paper. You seem to be more indicating to us that you read over it beforehand, made a few changes, grammar, style and that . . .

MR. GILLIS: No. It was more than that. Intimate in the sense that I wanted to make sure that he had the chance to put forward some of the options, including his option, which was at variance from what seemed to be the policy of the government of the day. I think it is honest to say that I was involved intimately, whatever, I don't know, but I was part of making sure that he had the chance to put that forward. I think I also asked to make sure that there was a second option outlined, there was not just one way to settle this matter. In that sense, I suppose you could term it intimate, I don't know. I did work with Mr. Fiske and Ms. Butler on it, and I spent personal time on it.

[Page 25]

MR. SAMSON: Mr. Gillis, you have already testified as to what your belief of the role of a chairman is, and the fact that you were under the belief that this memorandum and Mr. Fiske's opinion were a reflection of the board's opinion. What was the relationship between Mr. Fiske and the Board of the Gaming Corporation at the time? Where you aware of how the relationship was working there?

MR. GILLIS: Not really. That is something you would either have to ask Mr. Fiske or other members of the board. I don't know. I assume they met and got along, but I really don't know about it. I assume it was a functional board, that is all I know.

MR. SAMSON: Mr. Boudreau, when he testified before us, described Mr. Fiske at this stage with his view on how arbitration should go forward, he described him as unbending, unyielding, uncompromising. What was your view of Mr. Fiske at this time?

MR. GILLIS: I think I indicated earlier, Mr. Fiske had strongly held views. Maybe it came from his background in a non-governmental career. He had strongly held views, but I would rather stay away from those other adjectives.

MR. SAMSON: Were you aware of the fact that Mr. Fiske was calling Mr. Boudreau at this time, while he was Minister of Health, and asking him to intervene in this file with yourself and the Premier's Office?

MR. GILLIS: To the very best of my knowledge, I was not aware. This was obviously done, as far as I can recollect, on his own. I don't think I heard about it until I read about it here.

MR. SAMSON: And Mr. Fiske never, at any time, told you, look Bill, I am asking Bernie to get involved here to help me out?

MR. GILLIS: To the best of my knowledge, he did not.

MR. SAMSON: Mr. Fiske also claims that when the casino matter actually went before Cabinet in 1997 that you assured him that you would, ". . . describe the full history of the deal to Cabinet and strongly recommend against its approval.". Is this an accurate statement?

MR. GILLIS: I am not sure. Was this the big memorandum he was talking about or was this the shorter version that eventually came forward? I am not sure.

MR. SAMSON: I would say the famous Boudreau deal and when that went to Cabinet back in 1997.

[Page 26]

MR. GILLIS: Well, I do not know what the Boudreau deal is frankly. I hear lots of talk about it. The only thing that really did go to Cabinet was the memorandum, which Mr. Fiske tabled, which outlined the terms of settlement and sought Cabinet direction and then, eventually, an Order in Council putting those into effect.

I would say on that, I did try to make sure that Cabinet had a general idea that it was not black and white, that there were shades of grey and that certain opinions were strongly held, and Mr. Fiske and so on had advocated certain things, but this is what we have come down to, here are the suggestions as put forward, now, what is the Cabinet's will.

MR. CHAIRMAN: I have to move now. We will be another one-half hour, another three 10 minute sessions. Mr. Deveaux.

MR. KEVIN DEVEAUX: Welcome, Mr. Gillis, I appreciate your coming today. I know that my friend from the Tory caucus and I believe Mr. Fraser from the Liberal caucus already alluded to this issue. I just want to come back to it to some extent. You worked with Mr. Fiske in the 1970's. I guess you were both Cabinet Ministers. Is that correct?

MR. GILLIS: Yes, from the fall of 1970 to sometime into 1973.

MR. KEVIN DEVEAUX: The next time you would have dealt with him on a regular basis, business to business, would have been when you were Minister of Finance and he was CEO of the Nova Scotia Gaming Corporation?

MR. GILLIS: June 1996 to the end of September 1997.

MR. KEVIN DEVEAUX: I know in you answering Mr. Leefe's question, did you suggest that he was an honest man, Mr. Fiske was. I want to ask . . .

MR. GILLIS: Well, that is to the best of my knowledge. He came across to me as an honest man. I had no reason to believe otherwise.

MR. KEVIN DEVEAUX: I guess I want to get a sense as CEO of the Nova Scotia Gaming Corporation. Would you say he did his job? Based on your weekly briefings, would you say that he was diligent in performing his duties as CEO of the Nova Scotia Gaming Corporation?

MR. GILLIS: I think it would be fair to say that he worked at it, but his approach might be different than other deputies or agency heads, as I indicated earlier. Again, I pointed out that, coming from his background, not a career public servant, he might have had a little different approach and a little stronger-held views.

[Page 27]

MR. KEVIN DEVEAUX: My question though was, was he diligent in performing his job?

MR. GILLIS: Well, he showed up, as far as I know, and worked at it. When we had meetings, he was there. So, as far as I know, he worked hard at the job. I have no reason to doubt it.

MR. KEVIN DEVEAUX: I understand the difference, different managers, different deputy ministers, different perspectives and different ways of dealing with the people, but based on all your experiences with Mr. Fiske, whether it be in the 1970's or more recently, if I was to say that he was respected for the way he did his job, would you agree with that?

MR. GILLIS: Well, some people might respect it, others might not like that type of style where he had strongly-held views and maybe did not want to listen to others. It is like, my way or the doorway kind of thing. Again, some people like that style, but others do not.


MR. GILLIS: Well, I like a little more of getting different options, since Cabinets and governments and MLAs are elected, you bring the options, you can bring forward what you think is your favourite one, but you should give at least a fair shake to other options so that the elected officials, the Cabinet and the Premier know what they are choosing from.

MR. KEVIN DEVEAUX: I want to go back a little bit to, in your daily briefings or weekly briefings and discussions with Mr. Fiske, when would he have first brought to your attention his concerns about potential interference from others in government and also the potential losses to government if they signed the, as he called it, Boudreau deal?

MR. GILLIS: In terms of interference, as I recall, now you are going back in time, I do not think there was much ever raised until certainly after that April 21st meeting and maybe into the summer, and by the time we got to the memorandum in August, I think that is when it really triggered and he was mentioning these things. But I did not really hear much complaints. I did not hear, to my recollection, complaints from Mr. Fiske of interference.

MR. KEVIN DEVEAUX: What about the potential losses to the government?

MR. GILLIS: Well, there were numbers kicked around. I do not recall, early on, anything like the numbers that we eventually saw here. That came up by August.

MR. KEVIN DEVEAUX: I am asking that just because I am just trying to recall Mr. Fiske's testimony on July 8th where he makes a suggestion that he was speaking with Premier MacLellan and I believe you were present as well. He had raised concerns with the deal that the Savage Government was promoting and that he had been hoping that Premier MacLellan

[Page 28]

might not agree to approve that deal, that you were there and that you had intervened to help clarify exactly what were the issues and concern. Would you agree with that?

MR. GILLIS: Yes, as I said, I helped to arrange that meeting and the idea was to help Mr. Fiske have a chance to express some of his concerns to the new Premier and, hopefully, to mention some of the other options as well. I did intervene. If there seemed to be a lack of clarity in what he seemed to be concerned about, without pushing his view, necessarily, I tried to make sure that Premier MacLellan understood.

MR. KEVIN DEVEAUX: Mr. Fiske is saying in his testimony on July 8th - I believe it is Page 39 and I am just going to sort of summarize it - basically, he was hinting that there had been a major event in July 1997 that was influencing the Savage Government in its decision to approve the deal. In fact, what he meant was the leadership convention. He didn't actually say those words and he says on Page 39 of his testimony, "Premier MacLellan then asked what major event in July, I was referring to. At that point, Dr. Gillis intervened and explained that I was referring to the leadership convention.". Is that your recollection?

MR. GILLIS: I think so but I wouldn't have to be a rocket scientist to figure that out, that there was some major event in July. I think I tried to be helpful.

MR. KEVIN DEVEAUX: So at that point, prior to the three of you meeting, Premier MacLellan, yourself and Mr. Fiske, you had some knowledge of Mr. Fiske's concerns that the Savage Government had interfered for political reasons?

MR. GILLIS: I wasn't aware of allegations that the Savage Government had interfered for political reasons. This came up later. I never had heard about this, about helping Mr. Boudreau. This was new to me in testimony. I knew that Mr. Fiske had concerns.

MR. KEVIN DEVEAUX: You must have had knowledge of those concerns at that meeting because he said that he raised them at that meeting with Premier MacLellan.

MR. GILLIS: Well, yes, there may have been by that time. Now, you're into the end of July and you're coming up to when this memorandum was prepared. It was in August. He was making these allegations by this time, I think.

MR. KEVIN DEVEAUX: I think it was in September 1997 that Cabinet approved the settlement agreement, memorandum of agreement?

MR. GILLIS: Yes, right. The memorandum was dealt with first and then eventually the Order in Council was passed.

MR. KEVIN DEVEAUX: As the minister responsible for that settlement agreement, did you recommend to Cabinet that it be approved?

[Page 29]

MR. GILLIS: As I recall and as the memorandum that is in Mr. Fiske's package presents some of the things that are suggested and we asked Cabinet for direction, as I recall, I tried to indicate both sides. Here, you have your decision and Cabinet made . . .

MR. KEVIN DEVEAUX: So you took no position with regard . . .

MR. GILLIS: I don't think I took a hard position on it.

MR. KEVIN DEVEAUX: Right, okay.

MR. GILLIS: Cabinet had been working on the thing for months, or at least the Premier's Office had been, going back to April.

MR. KEVIN DEVEAUX: I want to go to the September 30th resignation letter. Mr. Fiske's letter was addressed to you, I believe, is that correct?

MR. GILLIS: It was.

MR. KEVIN DEVEAUX: All right. He raised some serious concerns in that letter. Would you agree with me on that?

MR. GILLIS: He raised some concerns and I tried to answer them in my reply which was done promptly.

MR. KEVIN DEVEAUX: Had you discussed the resignation letter with Premier MacLellan after it was submitted?

MR. GILLIS: I discussed it with Mr. Thompson in his office.

MR. KEVIN DEVEAUX: In retrospect now, do you think an investigation at that time, based on his concerns, should have taken place?

MR. GILLIS: I don't think so. I mean, I gave a copy right away to Mr. Thompson. He could read them and see them and presumably he may have discussed them with Premier MacLellan.

MR. KEVIN DEVEAUX: Mr. Thompson was the person he had concerns with, with regard to the issue.

MR. GILLIS: But remember, I had nobody else. I mean, Finance had nothing to do with it. I had a Deputy Minister of Finance who had nothing to do with the Gaming Corporation, so who else do I turn to but the Premier's Deputy Minister? He may have had an argument with Mr. Thompson but I have nobody else to turn to. I can't go to Ralph Fiske.

[Page 30]

MR. KEVIN DEVEAUX: You didn't discuss it with the Premier?

MR. GILLIS: Well, I don't know if I did or not but he's the Deputy Minister for the Premier's Office and surely that will do it.

MR. KEVIN DEVEAUX: If he is the person that Mr. Fiske had concerns with, wouldn't it make sense to discuss it directly with the Premier?

MR. GILLIS: Well, I left that up to Mr. Thompson to do that. He is a responsible Deputy Minister, the Chief of the Deputies, and I assume he would have done it. Again, the order was passed by Cabinet in the end and the Premier, with full knowledge that the resignation was accepted. I mean, it wasn't something that I was doing. I had no power to do it on my own.

MR. KEVIN DEVEAUX: My time is running out, I believe. I just want to clarify a couple of points here, Mr. Gillis. Based on your evidence here today, you have made it clear that you felt that Mr. Fiske was a diligent CEO of the Gaming Corporation. As you say, you had no reason to believe he wasn't an honest man. You had actually worked on the memo that he wanted to present to P&P. He had concerns with regard to interference. He had concerns with regard to the loss of millions of dollars but what I don't understand is, as the Minister responsible for the Gaming Corporation, why you didn't do anything to address his concerns or why you didn't do anything to address his concerns about losses of millions of dollars and interference?

MR. GILLIS: Well, I did try to give him the opportunity to bring it forward and he had previous opportunities at meetings I helped arrange with Premier MacLellan and before that with Premier Savage to make all these points. This is not the first time this has come up. Premier Savage, certainly his advisers, or at least Mr. MacKeigan and then the counsel for the Gaming Corporation was saying it wasn't so. So it is not black or white. I will tell you, this is a very muddled thing and nobody has, it is not a Ten Commandments thing where it comes down from the sky and it is all laid out and it is all one way, I will tell you.

MR. KEVIN DEVEAUX: I am putting this to you, you preferred to take the advice of the Premier's deputy minister and his lawyer over the advice of the person who has been hired to give you advice on the Gaming Corporation on whether the deal should be settled?

MR. GILLIS: It is not that I just accepted that but I also listened to Mr. Fiske and knew it was happening or wasn't happening for all those months. I didn't feel uncomfortable that let's get on with this and negotiate a settlement rather than go the other way because there were two choices and I am not saying the other one was wrong but this was another way to do it.

[Page 31]

MR. KEVIN DEVEAUX: But just so I am clear, you didn't take the advice of the person who was the CEO of the Gaming Corporation.

MR. GILLIS: Well, again, when eventually you find out it is not the view of the Gaming Corporation, it is one person's view, it gives you pause.

MR. CHAIRMAN: Mr. LeBlanc.

MR. LEBLANC: Mr. Gillis, I just want to pick up a little bit regarding what happened at the June 5th meeting. Supposedly there was a heated exchange in there between both Mr. Savage and Mr. Fiske. Can you recall what instigated the heated exchange?

MR. GILLIS: As I generally recall, Mr. Fiske had strongly-held views of how this thing should go. As we have all been through, we all know about that and he was putting it forward forcefully and Premier Savage, I think it is fair to say, is no shrinking violet himself so they locked horns a bit. I think it was as simple as that. I don't think it was quite as bad, in my recollection, as it has been portrayed by either of those parties but it heated up a little.

MR. LEBLANC: The reason I asked that is because I asked you a question earlier on today asking whether Mr. Fiske suggested that the Premier had been gotten at by Sheraton and you indicated that was not the case. I am looking at last week's testimony by the former Premier Savage. It says here on Page 37, "During this meeting, Mr. Fiske accused me of having been got at by the Sheraton people. This angered me as nothing like that had happened at all. I told Mr. Fiske, quite forcibly, that this was not true.". This is in direct contrast to what you just told us a while ago. Since you didn't recall this, I am asking myself as to - if I was at a meeting and someone accused that the Premier had been gotten at and I wouldn't recall that, I would say my memory is pretty well shot. So I go back to the point, can you recall whether or not Mr. Savage made the statements that Mr. Fiske attributed to him?

MR. GILLIS: I read what Dr. Savage did say about having been gotten at and I tell you, under oath, that I don't recall that being said. That doesn't mean it wasn't said but I don't recall it being said. It is as simple as that.

MR. LEBLANC: Thank you.


MR. ERNEST FAGE: Good morning, Mr. Gillis. I would like to continue on where Neil has left off and that is that June 5th meeting. To your recollection, who attended that meeting on June 5th?

MR. GILLIS: The June 5th meeting?

[Page 32]

MR. FAGE: Yes.

MR. GILLIS: My recollection is four people - then Premier Savage, Mr. Fiske, Mr. MacKay and I.

MR. FAGE: Again, I think it is crucial, what Neil has brought up. Some details of a number of meetings and recollection of who is at those meetings adds clarity to the situation for all of us legislators trying to determine. Now, Mr. Fiske's testimony under oath seems to be very clear in a lot of regards. Answers received last week and this week, are: to the best of my knowledge, I never rubber-stamped, I am not sure but I think. You made major decisions during that period - the terms of reference for the memorandum, all those types of decisions. The clarity draws into question the testimony - or puts at odds, I should say - that we have been receiving. I ask again, on that meeting of June 5th, which is vivid in other people's testimony, that there was a major debacle, a difference of opinion. Do you remember anything of that discussion? What happened at that meeting? If other witnesses see that as the focal point of that meeting, why don't you?

MR. GILLIS: Well, I thought I tried to answer. Maybe I am missing something but I thought from the previous testimony, one person said that there was interference in the arbitration to help Mr. Boudreau or to that effect. One person, Mr. Fiske, said that but reading what Mr. MacKay said and what the Premier said, they said, no it wasn't said. I am saying, to the very best of my knowledge, it wasn't said. But I am not God and I wouldn't want to say absolutely that it wasn't but to the best of my knowledge it wasn't. So, it seems to me there are three people saying one thing and one saying another so I think in a democracy, if it means anything, or maybe in a court of law even, if you had three witnesses testifying one way and one another, maybe there is some weight to that. So there you are.

On the other, I am being honest with you. I read what Dr. Savage said about being got at but I suppose the easy way would be to say, oh yeah, that was said and he was mad about it but I didn't remember that being said but the other, I believe I would have remembered had it been said. I don't. On the other, I am sure I would have remembered if Dr. Savage had said he was trying to help Mr. Boudreau in the leadership. I have spent part of my life involved with politics, I would have picked it up right away and I didn't.

MR. FAGE: Thank you. Returning to the deal in the arbitration settlement, earlier you mentioned there were things Sheraton did not get. What were those things, Mr. Gillis?

MR. GILLIS: I don't know. It may have to do with whether or not there would be penalties for delays but there are some things in that memorandum, the short form, that mentioned that's not what they were looking for. I am sure Sheila Butler could tell you all that stuff. There were some pluses and minuses, as I recall, in the broad brush. It wasn't all one way, to my knowledge.

[Page 33]

MR. FAGE: I think that is a critical point, too, because the plus and the minus, the amount of dollars, we have heard as high as $27 million quoted. That is the heart of why it should or should not have gone to arbitration. You, as the minister involved who consistently in your own report have said that you are hands-on, not hands-off, when asked the key, critical question of why the arbitration process did not proceed and that is what was in it that Sheraton didn't get, you are saying now, ask somebody who was involved in the Gaming Corporation. You, the minister responsible, have okayed this. When we go through this memorandum of understanding, is it hands-on or is it hands-off? It appears to be indicating quite strongly what Mr. Fiske says. If the terms of the deal are not recollected or clear to you, maybe it is indicating hands-off.

MR. GILLIS: Well, maybe but the public will judge me and history will judge me, whether I have worked diligently at my job because, as I said, I worked hard. I had other things to do, like a budget, like HST, like it or not, it is there. On this, it was not my impression that it was a major detriment, financially, to the province. Based on the information we had, the Cabinet discussion following the 21st meeting, it seemed the way to go. It was roughly six of one, half a dozen of the other. Again, I mean if I made a mistake, I did. I am human. I may well have made a mistake but I did the best I could on the day and if some - there are couple of you over there who have been ministers and you know what it is like. You have to make decisions and they are not always right. There are some of you over there who will be ministers some day, I wager, and maybe in the Chair, who knows? You will find, too, if you are honest and give it your best shot, that is all you can do.

MR. FAGE: I am certainly not discounting that and it wasn't intended in that light, Mr. Gillis, it was intended in the light that we certainly are aware that you had other major factors weighing on your mind; certainly the casino decision, all these meetings were held, the appraisal to make the decision, you needed good advice. We are wondering, as a committee, was that advice delivered or was it heeded? That was the intent of the question, not how the priority list of the casino deal is on your docket.

[11:30 a.m.]

MR. GILLIS: Well, I tried to listen to all the advice I could get on the matter. I met regularly and talked regularly to Mr. Fiske and certainly heard his views, which were purported to be the views of the Gaming Corporation. Also, I talked to the Premier and we had discussions eventually in P & P and Cabinet about it. So, I tried to do my job as best as I could. Now, whether it was the right decision, I don't know.

MR. FAGE: I think though it comes back to that critical decision and we will have to make up our minds here obviously from the testimony whether it was hands-on and you were in the loop. I have not received any definitive answers that have given me great comfort in any detail that this one was attracting your major attention.

[Page 34]

MR. GILLIS: Well, again, like I say, you will have to judge that or whatever, whether I was doing my job or not. I feel that I tried to make sure that Mr. Fiske's views were brought to two successive Premiers and to stay in touch with him, and work with him, and work on a memorandum such that has been brought forward although it eventually was rejected or returned, or whatever. I think I was trying to do my job, but I will leave it to the committee. That is for the committee.

MR. FAGE: That is the crux in my mind of the question, who was in charge, the Gaming Corporation, the Premier's Office, or the Minister of Finance. We have a lot of threads running in a lot of ways from testimony from different individuals. Thank you.

MR. GILLIS: Well, like I say, I tried to do my job but I am part of a larger mosaic and eventually the final decisions are made by Cabinet.

MR. CHAIRMAN: Over to the Liberal caucus, Mr. MacKinnon.

MR. MACKINNON: Mr. Gillis, at what point did you come to realize Mr. Fiske's opinion was not the opinion of the corporation board?

MR. GILLIS: I don't think I knew that until subsequently when I was - it may have been mentioned to me at the time when it was returned, but it may have been finally when all the witnesses and all the testimony was given.

MR. MACKINNON: So, that is why you would take Mr. Fiske's concern, as representative of the corporation, to the Premier's Office, into P & P and Cabinet and so forth?

MR. GILLIS: Well, I am sure I assumed that he was reflecting the views of the board, as chairman of the board. I did not have any reason to think otherwise. Apparently, it turned out that way in that one particular memorandum.

MR. MACKINNON: Did he ever give you any indication that it was his view and not the view of the board?

MR. GILLIS: Not really, no.

MR. MACKINNON: Okay, thank you.

MR. CHAIRMAN: Mr. Samson.

MR. SAMSON: Mr. Gillis, as Minister of Finance, at any time did you feel that the dealings and the conversations taking place between the Premier's Office was interference or that it was inappropriate for the Premier's Office to be involved with this $100 million casino?

[Page 35]

MR. GILLIS: Given the experience I have had over the years where the buck stops at the Premier's desk, it did not seem unusual that the Premier's Office wanted to be advised, be briefed and maybe even see the matter went to Cabinet and get on with the thing. I did not feel that I was being left out of it or somebody else in where they should not have been.

MR. SAMSON: Mr. Gillis, I am actually going to entertain one of Mr. MacIntosh's suggested questions at Page 2, Schedule "B", an interesting one, question No. 4. "Mr. Boudreau has described as ludicrous the suggestion that Dr. Savage would spend $30 million of taxpayers' money to give Mr. Boudreau some sort of vague advantage.".

Mr. Gillis, I ask you, at any time upon the completion of your term in public service as an MLA, were you part of or did you overhear any conversation that in any manner linked the settlement of Sheraton negotiations, either with Mr. Boudreau's leadership aspirations or any other matter that had potential political consequences?

MR. GILLIS: I never heard this until what I heard and read in Mr. Fiske's testimony. That is where it came up that he said this, that Dr. Savage was taking a certain course to help Mr. Boudreau. That is where I heard it first. That was in July.

MR. KEVIN DEVEAUX: Mr. Gillis, you have been asked a few questions about the legal opinions about arbitration, a negotiated settlement that I consider were unfair questions. Obviously, that is why you retain lawyers just to get a legal opinion. Some claims were made that Mr. Merrick actually, even right at the end, was still saying that arbitration was the best way to go. I would point the committee's attention to Page 9 of Wednesday, July 15, 1998 of Hansard where Mr. Merrick states, "Sixth, there were risks of losing the arbitration". He goes on to state, "I did express that view to the corporation and told them that it looked as if this was an open and shut case.". He goes on to say, "But as I reviewed more of the documentation and got a better feel for what had occurred between the parties . . .". Then he says, ". . . but whatever it was, it was my view that the evidence gave rise to a material risk that an arbitrator might consider that it was the Sheraton which was being unfairly treated and that, accordingly, an extension should be given.". Now Mr. Gillis, your decision to support the advice that you were given in regards to going with a negotiated settlement, was this based on legal advice, or was it based on mere politics?

MR. GILLIS: It was nothing to do with politics. There was no politics to it, as far as I was concerned. I never heard mention of it. I was trying to do the best I could. Some of these opinions were given and that was brought forward to Cabinet in April.

MR. SAMSON: Mr. Gillis, you have already spoken about this, but Mr. Fiske has talked about political operatives, people behind the scenes doing all sorts of things to undermine his credibility with the Sheraton. Have you, yourself, or are you aware of any member of your staff, or the Premier's staff, who intentionally dealt with Sheraton in order to undermine Mr. Fiske?

[Page 36]

MR. GILLIS: I can't speak for other people. Certainly, I didn't do anything behind Mr. Fiske's back to undermine him, in fact, I never spoke to any official of Sheraton as such.

MR. SAMSON: Now Mr. Fiske has claimed that Mel Thomas, in a conversation with him, alluded to the existence of this honourable gentleman. All of the witnesses who have appeared before us to date, not one has even been able to claim that they heard about this honourable gentleman, or that they have any idea who it might be. Mr. Gillis, has Mr. Fiske, or anyone else, ever made reference to the existence of this honourable gentleman and do you have any idea who this person might be, or that this person even exists?

MR. GILLIS: I have no idea. I didn't hear about it until it came up in Mr. Fiske's testimony. He certainly didn't mention it, to the best of my knowledge, to me during the many meetings and discussions we had. He didn't say this to me, that somewhere lurking out there, there was some mysterious so-called honourable gentleman or gentleperson, whatever, that was going to do certain things. I never heard of it before.

MR. SAMSON: Were you ever approached directly by any official of Sheraton or someone on behalf of Sheraton to give Sheraton whatever it wanted?

MR. GILLIS: I never had any discussions with any official of Sheraton, ever. The only discussion I ever had with anybody, long after this was over, after Mr. Fiske had resigned, on an HST matter I met with, in the presence of the acting chair, Ms. Gordon, the lawyer for Sheraton, Mr. Hayes. But other than that, I never discussed anything with anybody from Sheraton, none of the officials, Mr. Thomas or any of them.

MR. SAMSON: That is it, Mr. Chairman.

MR. CHAIRMAN: Was that in the context of pending arbitration, Mr. Gillis?


MR. CHAIRMAN: That last meeting that you just described between Ms. Gordon and yourself and Mr. Hayes.

MR. GILLIS: No. It was about HST being charged on the operation. Nothing to do with arbitration.

MR. CHAIRMAN: The reason I ask that is that there was a statement in the annual report of the Gaming Corporation this year that said that the Gaming Corporation and the operator had gone to arbitration over an HST matter.

[Page 37]

MR. GILLIS: I didn't know it went to arbitration. It was awhile ago since I left and this was last, say October, November, and Mr. Hayes was in touch with me. He said he wanted to meet about HST, this had nothing to do with the terms, that was all dealt with, as far as I know, the terms of settlement, it was all passed, and he wanted to talk HST because it was some financial drain on them. I said, I will meet with you provided the acting chair of the corporation could be present, and she was, and we met for a half hour, and that was that.

MR. CHAIRMAN: Have you any advice for this committee, Mr. Gillis, on the question of the possibility of improved statutory guidelines for the relations between Cabinet and the Gaming Corporation? You may recall from Mr. Fiske's original testimony, that he suggested that some changes might be appropriate. In retrospect, when you look back on it, are there any changes that you would suggest?

MR. GILLIS: I haven't really put my mind to that. There probably isn't any Statute in the world that can't be improved. You have suggestions before you, it may well be worth looking at some of those. The transparency matters, for example, I was responsible for the prosecution service, and I was very conscious of that, giving direction to the prosecution service, which I did not do, but I knew how it worked. There may be other models that could be looked at.

MR. CHAIRMAN: Mr. Gillis, thank you very much. Perhaps what we will do now is adjourn just for five minutes. Then I will ask the committee to come back, and we could have a discussion about procedural matters, how we intend to go ahead. Thank you for appearing today.

[11:40 a.m. The committee recessed]

[11:57 a.m. The committee reconvened.]

MR. CHAIRMAN: We will now reconvene to see if we can sort out some of the procedural matters. Let me outline very broadly what I have in mind in terms of procedural questions that I think we now have to deal with. One is with respect to the Gaming Corporation. We have outstanding a question of what witnesses we wish to continue to hear and I'll come back to that in a moment. The second point, again with respect to the Nova Scotia Gaming Corporation issue, is how we propose to deal with the information that has come before us, that is to say are we proposing simply to leave the material on the record or do we wish at all to turn to the question of writing a report based on the material that we have heard.

I think those two questions would deal with anything that is immediately in front of us with respect to the issue of the Nova Scotia Gaming Corporation and then the last matter, which we don't absolutely have to decide today but we certainly have to deal with, is the question of other topics that we wish to deal with as a committee. You will recall that we've

[Page 38]

had a number of suggestions made at our earlier organizational discussions. We have heard already, of course, about the P3 schools. It may be we'll want to turn back to that again. There is the QE II. There are other suggestions out.

So those broadly are the three areas of procedural matters that I would invite the committee to begin to comment on and let's turn first to the question of witnesses. If I may outline where I think we are with respect to that, we decided last week that we would like to hear from Sheila Butler. She was not available today. Our motion was subject to witness scheduling and availability and we can I think continue to leave it in the hands of the committee clerk to try to find when Ms. Butler is available. There are other questions that have to be grappled with in terms of witnesses and one is the question of whether we wish to invite anyone from the casino operator to testify. Earlier on in our proceedings there was a discussion of the possibility of inviting Premier MacLellan to come testify and I think we also have to consider whether we wish to hear again from Mr. Fiske.

Now, there are several different considerations that would clearly apply in terms of who we want to schedule as witnesses. One is the consideration of whether we need additional information, where we can reasonably look to seek information that the committee needs to thoroughly canvass the issues. The other is the question of fairness. Fairness is a consideration in the sense that anyone who has been named or talked about in the proceedings might want to appear before the committee and speak. Another consideration, of course, is the amount of time that we've spent on this. So with that preliminary observation with respect to witnesses, can I hear comments from members of the committee as to their thoughts as to how we should proceed? Mr. LeBlanc.

[12:00 p.m.]

MR. LEBLANC: Mr. Chairman, this has evolved over a long period of time and every witness that comes forward, upon their leaving, we go through our information and we think of questions that we should have asked which would have been pertinent. We get correspondence from Mr. Fiske's lawyer stating the questions that should have been asked at that point that weren't asked. It goes on and on but I think that for myself, and I think for our caucus, that the last witness - and we have one more witness called and that's Sheila Butler and she's the one who can perhaps put a quantitative figure on what this has cost, or how it has been handled, and I think that's what our caucus would like to bring forward.

The other evidence that has been brought forward and we're having quite a bit of a dilemma as to how to get all the information from the witnesses in the time-frames that we have, the questioning, and more and more this is turning out to be a court case. I refer, especially even yesterday, to the letter that was received from Mr. Fiske's solicitor. I think it was about a 15 page letter. It is getting more into, I guess in a sense, legalese type of arguments back and forth, and I don't really believe that the Public Accounts Committee is

[Page 39]

the forum that this can go forward from this point on. I think we have brought much of the points to light.

Now we come to a point, or an impasse I guess in a sense, as to where we go from here but I think there are serious statements that have been made, serious questions that haven't been answered to my satisfaction, that I think that perhaps this committee should give consideration to, that perhaps this be referred to someone outside of the political realm, someone perhaps and I make a suggestion that even a retired judge, who could take the information, ask the pertinent questions and take it out of this arena. I think we have done the job as much as we can and we still have one more witness that I would really like to hear from and that's Sheila Butler. I am making this suggestion today and I think it is only fair to the members of the other caucuses that you give notice of it and I'm doing it now, that perhaps the following week when we do have Ms. Butler before this committee, or perhaps even if it is the following week, that we would be prepared to discuss this and not just throw it upon the committee right now to make a decision.

But I believe there are some serious concerns that have been brought up that haven't been answered to my satisfaction and the satisfaction of our caucus. We are political animals as such and this is a political forum but at the same time it's getting to the point that there are many questions I wish I could go back and ask and to have all the witnesses come forward before the Public Accounts Committee again and upon their testimony subsequently have more questions which will go on and on, I think that perhaps this is a forum that we could consider and I'm open to other ideas and something that will be quick. I don't want to create a long expensive public inquiry type of situation but I think that will be the way to go.

Even the Liberals have mentioned that there are people who have been named and whose integrity has been questioned and even for themselves, that this would be in support of what they are talking about.

MR. CHAIRMAN: Thank you. I now have an additional piece of information. The clerk of the committee tells me that the most up-to-date information from Ms. Butler is that she may not be available until our meeting of October 7th, if we want to schedule one then. That pushes it ahead a bit but that's where we are. So it's about three weeks. Mr. Leefe.

MR. LEEFE: September 30th is a day that our caucus would not be available so October 7th would be fine with us.

MR. CHAIRMAN: Mr. Dexter and then Mr. Samson.

MR. DEXTER: I wanted to follow up a little bit on what Mr. LeBlanc has had to say because he makes a valid point which is that there are outstanding questions that perhaps have not been answered and perhaps will never be answered by this committee.

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MR. CHAIRMAN: We could recall everybody.

MR. DEXTER: There are conflicting pieces of information that have come before this committee. We have spent a great deal of time on this. Over and above the 15 or 20 hours of testimony we have all invested a great deal of time in making ourselves familiar with all the documentation, spending a considerable amount of research time in drilling down deeper to these issues.

I believe that this is an opportunity for us to put forward a report on behalf of the committee that sets out what we heard by way of evidence, that could set out what we see as some of the conflicts, and what some of the unresolved questions are by way of a report. It doesn't have to be a tremendously lengthy document, but it would serve as a vehicle if we decided to say, look, we want to do something more with this, as Mr. LeBlanc has suggested, then at least there is a foundation document to proceed from. I would suggest that we ought to take it upon ourselves to, at the end of the testimony of the last witness, issue some kind of report.

MR. CHAIRMAN: Mr. Dexter, on the issue of further witnesses, are you in agreement with the point I took Mr. LeBlanc to make, that he is suggesting we hear from Sheila Butler and then not hear any further witnesses? Did I correctly understand you, Mr. LeBlanc?

MR. DEXTER: I would make one more point on that, which is, if there is additional information that someone wishes to submit to the committee, that they would be open to be able to do that. It may be that the Sheraton interests would want to come before the committee, and if there was a written request, I would think that that ought to be honoured as well.

MR. CHAIRMAN: Mr. LeBlanc again, did you . . .

MR. LEBLANC: I agree. I'm not trying to limit the debate; however, the Public Accounts Committee, there are other issues that we would like to talk about, whether it is Nova Scotia Resources Limited, and on and on. We have taken four to five months of this, but I would suggest that if anyone - and this is a public forum and hopefully they are hearing what we are saying - wants to make written submissions to the Public Accounts Committee, that we would accept them gladly.

It has to come to a final point, and it hasn't as of yet. I believe, with the amount of witnesses that we have, if we bring more witnesses in, it will create more need for someone else to come in to refute what they are saying, and we are going on and on. I think that, unless something changes, our caucus's view would be that Sheila Butler would be, at this point in time, the last witness.

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MR. CHAIRMAN: Mr. LeBlanc, did you or any member of your caucus wish to comment on the point Mr. Dexter raised and commented on, which was the question of a report?

MR. LEBLANC: I have no problem with a report. I think, in the report, that we could come up with some of the concerns that we have in regard to this. It comes down to what form do we prepare a report, and perhaps we could have an in camera meeting. I'm not sure just what, but something where our caucuses could perhaps sit down and take a look at what questions are concerning us, that we could put into a brief, and then we would at least have a synopsis or a summary as to what concerns we have that someone else could pick up and address. I have no problem with that.

MR. CHAIRMAN: Okay. So this is a possibility, but to be discussed further. Mr. Samson.

MR. SAMSON: Mr. Chairman, I'm in complete agreement with Mr. LeBlanc, to having Ms. Butler be the next witness before us. I agree with his earlier submission that it wouldn't be appropriate at this point to expect the caucuses to come to a final decision on how we want to wrap up this deal. I would suggest that after we hear Ms. Butler's testimony, at that point the committee sit down and decide where it wants to go from here. This will give each caucus a chance to review it, see what the options are for the committee and see how we wish the committee to proceed. I certainly agree with leaving the door open.

If, for some reason, there is some sort of alarming testimony from what Ms. Butler will have to say, that the committee has the right to look into this further, if necessary. But on the other point, that no decisions be made at this point, that we wait until that date to come to a decision as to which direction we wish to take.

MR. CHAIRMAN: That seems a fair summing up of what seems to have emerged from the discussion, and that seems also, of course, a fair way to proceed. That said, then I guess where we are left is that we will try to schedule Ms. Butler for October 7th. I take it that that will be our next meeting date. In the meantime, we can all continue to think and perhaps have informal discussions about the other aspects of this. I guess, as Mr. LeBlanc suggested, if anyone comes forward - or perhaps it was Mr. Dexter - really wanting to speak, we will relay that immediately to the committee.

I suppose, unless we want to have a discussion now about other topics that we want to move to, then we might hold that off for informal discussion, or does anyone want to now move definitely to picking the next topic for investigation? I will remind you that what we have discussed before are: the QE II; Nova Scotia Resources Limited; I think the Y2K problem has been raised; you remember that the Department of Finance had requested to make a presentation about accounting methods; and I think Sable gas was also mentioned.

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Unless anyone feels like engaging in any of those at the moment, we might just continue to think. Mr. Samson.

MR. SAMSON: I would suggest that you put a memorandum out to each member, outlining those specific topics that you just talked about, and once again, that will give us until October 7th as caucuses to decide which direction we wish to take and which witnesses we might want to call on those particular issues. I think that would be more appropriate at that time than now.

MR. CHAIRMAN: Yes. Although it would be useful, of course, if we could decide as much in advance of October 7th as possible, even if we decide only informally, so that we can begin to line up witnesses for that following week, October 14th.

In any event, that seems just fine, and thank you all for your attention. We stand adjourned.

[The committee adjourned at 12:11 p.m.]