HALIFAX, WEDNESDAY, MARCH 10, 2004
STANDING COMMITTEE ON PUBLIC ACCOUNTS
8:00 A.M.
CHAIRMAN
Mr. Graham Steele
VICE-CHAIRMAN
Mr. James DeWolfe
MR. CHAIRMAN: I call to order this meeting of the Public Accounts Committee. Our guest this morning is Mr. Andrew Barker, the former President and CEO of the Nova Scotia Liquor Corporation. Thank you for coming this morning, Mr. Barker. I would like to begin by having the members introduce themselves, starting with Mr. Epstein.
[The committee members introduced themselves.]
MR. CHAIRMAN: Mr. Barker, as is customary, you may have up to 15 minutes for an opening statement, although by no means should you feel compelled to use all of that time. I would now like to invite you to say whatever opening remarks you wish.
MR. ANDREW BARKER: Mr. Chairman, I will definitely be very brief this morning. Good morning, first of all, to yourself and to other members of the committee. My name is Andy Barker and I joined the Nova Scotia Liquor Corporation on May 1, 2002. We moved down as a family from Ontario and I was in that position for approximately 16 months until September 22, 2003, at which time my contract expired or was terminated. I have since been looking for a job on my own time. Other than that, I'm not sure there is too much more I can say. I appreciate the opportunity to speak to the committee this morning and I will certainly try to answer any questions that you may have of me.
1
MR. CHAIRMAN: Thank you very much, Mr. Barker. Before commencing the questioning from the members, just two things I would like to say. First of all, Mr. Barker is a private citizen appearing before the committee voluntarily and I am sure that the members will take that into account in their questioning. The second thing is that today's session was set for three hours out of an abundance of caution in order to ensure that there would be no reason to have to call Mr. Barker back in future. Again, members shouldn't feel compelled to use all of the time simply because it is available. If members feel that they have asked all the questions they wish to, they don't need to use up the maximum time.
There is about 10 minutes of committee business to deal with at the end of the meeting and I will judge the time accordingly. So having said that, we will begin the rounds of questioning. I will continue with 20-minute rounds. The first 20 minutes belong to the NDP caucus, starting with Mr. Epstein.
MR. HOWARD EPSTEIN: Mr. Barker, welcome. It's nice to see you here and I wonder if we could just sort out one or two things. I want to be clear. You haven't requested to come before the Public Accounts Committee. Is that correct? You are here at the request of the committee.
MR. BARKER: I'm here at the request of the committee. That is correct.
MR. EPSTEIN: In fact, you are here at the request of the committee with the suggestion that we would issue a subpoena if you chose to ignore that request. Isn't that right?
MR. BARKER: Yes, that is correct.
MR. EPSTEIN: Okay, well, nice of you to accommodate us.
This is a follow-up meeting, of course, to one that we held back in October in which we met with the chairman of the board of your former organization of the NSLC. At that time, we had a long discussion, as a committee, with Mr. McCreath about the general operations of the NSLC but we really did focus, to a certain extent, on the relations between the board and yourself as president and what might have led to the board choosing to buy out your contract. I would like to turn to that, of course, but I wonder, first, could you tell us what it was that you were previously employed in doing?
MR. BARKER: Certainly, very briefly, I spent 17 years with Shell Canada, which is a major oil company across Canada. I then spent four years in the grocery business, in a regional grocery chain in Western Canada and I then spent three years in the pharmacy business in the Toronto market, looking after Canada, and then subsequently moved to Nova Scotia.
MR. EPSTEIN: You moved here because you were hired to be President of NSLC.
MR. BARKER: Yes, that is correct.
MR. EPSTEIN: Right. You were recruited through a headhunting company. Is that correct?
MR. BARKER: Yes, that is correct.
MR. EPSTEIN: So that must imply that there was a competition. Did you respond to an ad?
MR. BARKER: Yes, I did respond to an advertisement in The Globe and Mail.
MR. EPSTEIN: And what process did you go through to be selected?
MR. BARKER: The initial process was a video conference interview with the headhunting organization followed by two interviews with various board members and then subsequently a final interview where we basically were awarded the job.
MR. EPSTEIN: And how long did that take, that hiring process?
MR. BARKER: From the time that I first indicated my interest, I would say four months.
MR. EPSTEIN: And you entered into a written contract of employment with NSLC.
MR. BARKER: That is correct.
MR. EPSTEIN: And it would have specified remuneration and it would have specified a length of time. Is that right?
MR. BARKER: It specified remuneration and it specified various terms and conditions of employment.
MR. EPSTEIN: Was the contract of employment for a set period of time or was it indeterminate?
MR. BARKER: It was open-ended.
MR. EPSTEIN: Open-ended, okay. It had, I gather from Mr. McCreath's evidence to us in the Fall, a clause - I think he referred to it as Clause 5 - that would allow the board to terminate and buy out the contract. Is that correct?
MR. BARKER: The reason for that, interestingly enough, which was really at my request, was that I was concerned that if the direction of the corporation changed, moving my entire family down to Halifax, I wanted to make sure that we had at least some protection on the way back out if things did change.
MR. EPSTEIN: It is, in fact, not an unusual clause to have when we are talking about senior management people, that is that there would be an appropriate and fairly significant amount of compensation paid if an employer chooses to terminate the contract but chooses not to do so for cause.
MR. BARKER: I believe so, yes.
MR. EPSTEIN: Right. And you weren't terminated for cause.
MR. BARKER: Right.
MR. EPSTEIN: You mentioned the direction of the NSLC, or of the corporation, and that is an important issue. I am wondering if there was a mandate that you were given when you were hired. Was there something that emerged either from the interview process or from your early dealings with the board that really gave you some idea of what it was that you were being hired in order to do?
MR. BARKER: Probably the best way to summarize that is during my interviews with both the headhunting organization and with the board of directors, it was clearly portrayed to me that the organization had been in business for a long period of time. It was a good, solid organization with lots of great people but that there had not been any new blood brought into the organization for some time, if at all. The perspective that I was given at that point was that there was a need to bring a retailing and business focus to the board and to work with the board of directors, who at that time were relatively new, to develop a lot of the policies and processes and practices that would bring the Liquor Corporation, if you like, more to a modern organization. So under those auspices, that was really the mandate, of a global sense, what I came in for.
MR. EPSTEIN: Yes, could you just help us understand what that might have meant, a more modern organization? Was that fleshed out at the time you were being recruited or did it emerge perhaps more as time went on and you interacted with the board?
MR. BARKER: I think there was probably an initial understanding from both parties but I think over time it did evolve for certain as we looked at the various components of customer service, product selection, store design, a number of other initiatives that we worked through together and developed as we went forward.
MR. EPSTEIN: Were you given a reason by the board for their choice to terminate your employment?
MR. BARKER: Just to go back, I was notified - or invited, I should say - on the Friday by Chairman Peter McCreath to attend a meeting over at Tourism and Culture on Monday, September 22nd. I attended that meeting with Peter McCreath and with Director Bill Pyle, and at that point in time was informed that my contract was to be terminated and the meeting lasted a total of perhaps five minutes. So it was a very brief meeting. During that meeting, there was no discussion of any reasons or any terms and given my thinking of other things, I didn't think to ask.
MR. EPSTEIN: You were, I imagine, surprised. Is that right?
MR. BARKER: Surprised but also very disappointed. The organization has a tremendous amount of potential and I think lots of great things had started to happen and you continue to see those things happening today, but at the same time it would have been nicer to be part of those going forward.
MR. EPSTEIN: I'm sorry, who was at that meeting?
MR. BARKER: There was Chairman of the Board Mr. Peter McCreath, and Director Mr. Bill Pyle.
MR. EPSTEIN: So you had no advance notice that that was going to be the subject of the meeting.
MR. BARKER: No, that is correct.
MR. EPSTEIN: In this five-minute meeting, you weren't given any reasons. Were you subsequently given a letter that suggested any reasons?
MR. BARKER: No, the only correspondence I received was to formalize a discussion that in fact my contract was to be bought out and the terms and conditions of the original contract were going to be fulfilled.
MR. EPSTEIN: So essentially they exercised their option under this so-called Clause 5 . . .
MR. BARKER: Under Clause 5.
MR. EPSTEIN: . . . and they have paid you the appropriate amount of money under that clause. Is that correct?
MR. BARKER: That is absolutely correct.
MR. EPSTEIN: Okay, and now you are still looking for work.
MR. BARKER: Yes, that is correct.
MR. EPSTEIN: Have you made any public statements? I have to say, I haven't seen any but have you made any public statements about your interaction with the NSLC or what led to your termination?
MR. BARKER: No, I have not.
MR. EPSTEIN: Have you had a chance to see the Hansard record, that is to say the transcript, of the meeting that this committee had with Mr. McCreath back in October?
MR. BARKER: Yes, I have seen it.
MR. EPSTEIN: He's very complimentary about you. He speaks highly of your background, of your skills, and he says how personable you are and he says that in general you're a fine person to have dealings with and that you did a good job, but he also says that there was no, what he called, synergy between you and the board. I had a very difficult time, and I think all members of the committee had a very difficult time, trying to get anything that might be called a specific example out of Mr. McCreath when he came here.
Our concern is for the stability of the organization, which is an important part of the government and its delivery of services, and of course we're concerned about the unnecessary expenditure of money; by that I have in mind the money spent to recruit you through a headhunting firm and then of course the money spent, public dollars, to pay you the money under Clause 5. It's not at all obvious that this was a necessary expenditure of money. I'm wondering if there is anything you can say to us - and I will ask this in a very general way initially; we may get into more detail, of course - to help us understand what it is that Mr. McCreath might have been trying to convey to us by this idea of lack of synergy. Can you help us out here?
MR. BARKER: It's a difficult question from the standpoint that during that meeting on September 22nd, and subsequently, there's never been a discussion of actual reasons. I don't have any hard and fast examples or anything defined that I can give to the committee this morning. Mr. McCreath, I think, in that particular committee meeting that you spoke of, did make it clear that there was what he called a lack of synergy, and I think the board had a number of discussions and believed that as the organization moved forward it would be much more effective for the organization to have a different person at the helm, if you will. I think on that basis the board made their decision. I was not part of those board meetings, and therefore I would have difficulty really trying to recount back to what happened.
MR. EPSTEIN: You were a member of the board, though.
MR. BARKER: I was a member of the board, but on a number of occasions there were in camera sessions held which I was not part of.
MR. EPSTEIN: The board consists of nine people: seven of them are appointed and voting; two of them are essentially ex-officio, being yourself as president, and the deputy minister.
MR. BARKER: That is correct.
MR. EPSTEIN: There were some meetings that were held that were in camera but only consisted of some members of the board?
MR. BARKER: It may have been parts of meetings or entire meetings that were held in camera, which I did not attend.
MR. EPSTEIN: Were you aware at the time that there were in camera meetings going on?
MR. BARKER: Yes.
MR. EPSTEIN: Who would be excluded from those meetings, just you?
MR. BARKER: The only person I know of is myself. There may have been others, but I'm the only one that I know of for sure.
MR. EPSTEIN: Do you recall when these meetings were? How often did the board meet?
MR. BARKER: The board, as a rule, meets every month. There may be an exception during the summer period or something, but typically they meet every month.
MR. EPSTEIN: When did they start holding in camera board meetings?
MR. BARKER: From time to time there would be subjects on the agenda that they would have an in camera session on.
MR. EPSTEIN: Were you ever told what these subjects were?
MR. BARKER: No, I was not invited to participate, but I must say it's not unusual, from time to time, for a board to have an in camera session if they're discussing the CEO's
performance, or something of a more global sense where the CEO would be involved directly. Whether or not that was the topic, I can't tell you.
MR. EPSTEIN: Meaning they never told you that the reason they were meeting in camera without you, you being a member of the board, was to do with their view of you? You weren't told that?
MR. BARKER: I was not aware of what their agenda was, no.
MR. EPSTEIN: So, they didn't say anything about what the agenda was at these in camera sessions?
MR. BARKER: That's exactly right.
MR. EPSTEIN: The board would meet about once a month. How often was Mr. McCreath around? Were you in the same building, in the same offices?
MR. BARKER: No, the office for Mr. McCreath was in his home office, I assume, because he does have his own business. So he was not in Bayers Lake at the time. The board would meet every month, and Mr. McCreath was at every one of those meetings.
MR. EPSTEIN: Did he have any offices out at Bayers Lake?
MR. BARKER: At the time he had an office which he very rarely used.
[8:15 a.m.]
MR. EPSTEIN: Were you ever involved in going, with Mr. McCreath, through any of the facilities of the NSLC; that is, visiting outlets or visiting any of your customers or suppliers or dealing with staff in any way? Did you and he go around and meet any of your staff or any of the other partners in the business?
MR. BARKER: Yes, certainly. From time to time, we certainly spent time together in the internal offices of Bayers Lake. We also spent some time in stores, sometimes with licensees and sometimes with customers. But Mr. McCreath was not involved nearly, of course, to the extent that the management team was on a day-to-day basis.
MR. EPSTEIN: I'm just wondering to what extent he was involved in that kind of operational side of the business. Was he trying to educate himself?
MR. BARKER: I think there was a little bit of that, in terms of the education, and I think there was a little bit of just being a face to the corporation, to the customers and to give them an opportunity to provide feedback to him directly.
MR. EPSTEIN: He told us, I think, that he was involved something like 20 to 30 hours a week, as chair of the board, on the business of the NSLC. I'm wondering if you are able to tell us what that might have involved, to what extent you saw that, and also how you could compare it with your experience of chairs of boards of other organizations you've been at?
MR. BARKER: I'm not sure I can comment exactly how Mr. McCreath would have spent his time or how many hours a week. A lot of it would have been done outside of Bayers Lake. My involvement with it would have been just on the surface level of knowing that he had been to see some licensees, perhaps, or had been to a customer meeting or something like that. As far as his involvement, because he was situated outside of Bayers Lake, as I said, we did not see each other on a daily basis, although we did speak several times a week as a rule.
MR. EPSTEIN: Did he have staff of his own?
MR. BARKER: He has one assistant, that's correct.
MR. EPSTEIN: And where is that person located?
MR. BARKER: That person is located in Bayers Lake.
MR. EPSTEIN: What's the nature of this assistant; that is, what does this person do?
MR. BARKER: The assistant was not so much Mr. McCreath's as the board's assistant. She would be involved in taking board minutes. There would be board action items that would come up. There would be a need to research particular documents, pull together programs for board meetings, that sort of thing.
MR. EPSTEIN: Was there written communication between Mr. McCreath as chair of the board and yourself as president in the normal course of events?
MR. BARKER: We certainly frequently exchanged e-mails.
MR. EPSTEIN: I guess I had in mind - well, could you give us something of the flavour of that? What kinds of things would you be e-mailing about, apart from the mechanics of getting together?
MR. BARKER: Very often it was just an update for him, perhaps something had happened at one of the stores, perhaps there was a new product launch, perhaps there was a new event coming, just to keep him in the loop of what was happening. Quite often notes would go out asking him for thoughts, did he have any information, did he have any advice of a direction to move into. There would be questions from time to time around the board
members, are we going to be meeting at a certain time, what's the agenda. We would be putting programs together, that sort of thing.
MR. EPSTEIN: You must have dealt, in your previous work, with other chairs of boards, and clearly there's a continuum and style as to the extent to which chairs of boards are going to be involved in the operations of an organization. Can you help us place Mr. McCreath on a general continuum?
MR. BARKER: The challenge I have is that I've never before worked at a Crown Corporation, and I suspect that makes a difference right away. Secondly, the last chairman I worked with was a full-time position, and that individual was in the office probably 30 hours a week. So we saw each other virtually on an every-half-day basis.
MR. EPSTEIN: Now, in the end, I think what Mr. McCreath was telling us is that there was some kind of difference in vision that seemed to have emerged between yourself and the board. When we tried to get details from him about what that meant, he wasn't very specific. He came closest, I think, to talking about the necessity for making some kind of internal change. He spoke about the NSLC as being a tired organization, and he felt that some kind of shakeup was needed. Did the board express to you what it was that they had in mind when they talked in this way? Did they talk in this way to you?
MR. BARKER: Not directly. I think probably the point that you're making, though, would likely be correct, given the fact that shortly after I left the organization, two other vice-presidents were terminated as well. I suspect there were changes that the board wanted to move forward on faster than perhaps was happening at the time. But outside of that, I don't have any particular examples, no.
MR. EPSTEIN: He suggested that you had become captive to what he called the old culture of being averse to change inside the organization. Can you help us understand what that might have meant?
MR. BARKER: Perhaps to go back a little bit, if I may. The best way, probably, that I can summarize what I think may have happened was, when I first arrived at the organization, the first few months I spent speaking with customers, speaking with licensees, speaking with suppliers and speaking with the staff and just getting a general feel for the business. Shortly after arriving, we consolidated a number of executive positions, we reduced the number of executives and we realigned a lot of accountabilities, so that it made more sense, if you will, the way the business was to be run.
Further to that, three individuals actually left the organization, three vice-presidents left the organization and we subsequently hired two new replacement executives, if you like, for those positions. The team that was left was then developing as a strong team and no question there were skills that needed to be developed; as a team they needed to grow
together and we needed it to work, I think, in a way that brought the team together and gave us even more purpose to the whole thing we were trying to accomplish. The board, I believe, may have wished to move faster from the standpoint of removing more executives at the time.
MR. EPSTEIN: Were you part of the process of considering terminating any of the other executives at NSLC, was that part of the discussions between you and the board prior to them terminating you?
MR. BARKER: No, not directly.
MR. EPSTEIN: Mr. McCreath and the board hired a person who had been Mr. McCreath's executive assistant a little earlier in his employment history. If Mr. McCreath had come to you and said that he is proposing to do that, what advice would you have given him?
MR. BARKER: I don't know the individual at all, so one of the difficulties I have is that I am not aware of his skill sets. From what I understand he is doing a very good job. So he may well have been the best candidate but I can't very well speak to it.
MR. EPSTEIN: How would this relate to general public relations for the NSLC to have someone hired who is the former executive assistant of the chairman of the board?
MR. BARKER: Maybe I will just mention it the other way, that the organization definitely required a public relations or a communications focal point; in the past it did not have that and, therefore, it did not benefit from a lot of the branding, a lot of the public messaging, even a lot of the social responsibility initiatives of being properly publicized. So, as far as bringing in the position, I completely agree 100 per cent, in fact, we were moving in that direction at the time I left. Whether or not Mr. Perkins was the right candidate, I can't really comment.
MR. EPSTEIN: Can you see any downside to hiring . . .
MR. CHAIRMAN: Mr. Epstein, your time has expired. We will now move on to the Liberal caucus.
The member for Richmond.
MR. MICHEL SAMSON: Thank you, Mr. Barker, for appearing before us today. Mr. Barker, as you're aware, Caldwell Partners was the company that was employed to find a new President and CEO of the Liquor Corporation and they charged the taxpayers of Nova Scotia $125,000 to select you as the ideal candidate for this position. Your salary was $135,000 per year, plus a $600 per month car allowance. You worked for 18 months,
received a severance of $92,000, leaving taxpayers on the hook for $425,000. I'm sure you're well aware that Nova Scotians and taxpayers were alarmed to see this much money was spent to select you as the ideal candidate only to see after 18 months the board decide to terminate you with a severance of $92,000.
We are here today, as part of this committee, our mandate is always to determine whether Nova Scotians got value for their dollar and we are here to try to determine whether the expenditure of $425,000 overall was a value for dollar or was a good expenditure on behalf of Nova Scotians.
My colleague, the member for Halifax Chebucto has asked you some general questions and I've heard your answers and I now leave myself in the position of we're still trying to determine why you were terminated as President and CEO of the Liquor Corporation. That's still not clear and I'm sure as you're going out to seek new employment you will be asked by potential employers why were you terminated from the Liquor Corporation after 18 months and after a $125,000 search to select you as the best candidate. So, I would ask you today, when that potential employer is looking across at you in an interview and says, Mr. Barker, why were you terminated as President of the Nova Scotia Liquor Corporation by Mr. McCreath and the board of directors, what would be your answer?
MR. BARKER: I've chosen to take a very honest approach and when I do get asked that question, very frequently, you're absolutely correct, my standard response is that the board of directors decided to pursue a different candidate.
MR. MICHEL SAMSON: I know if I was the potential employer that was sitting across the desk from you, I would certainly say that's not good enough. If I'm going to hire you to be the CEO of our corporation or our business - and you've clearly got a great deal of experience working both, I believe you said, in the grocery business and in pharmaceuticals at the end - I would certainly expect a better answer than that. So, I would ask you again, if you were to be asked by an employer why specifically did the board decide to terminate you after only 18 months, what would be your answer as to why they decided to let you go?
MR. BARKER: It's very typical for CEOs to have termination clauses in their contracts. At this point, that's as far as I go. The termination of the contract did occur.
MR. MICHEL SAMSON: All right, we're going to ask a few more specific questions and see if we can't get a better idea. When you were hired, after it was decided that you would be the candidate to be the new president and CEO, was it made clear to you by the board that they expected a major shakeup at the head office of the corporation?
MR. BARKER: It was definitely made clear that the board wanted the organization to move forward rapidly and effectively, no question.
MR. MICHEL SAMSON: Were comments made by the board as to what they believed was the actual performance of the existing structure that was in place?
MR. BARKER: From the standpoint that the organization needed change and from the standpoint that the organization needed more modern business practices, yes.
MR. MICHEL SAMSON: Was it made clear to you that, as far as the board was concerned, in order to move forward in that direction a number of heads would have to roll in order to achieve that?
MR. BARKER: No, not specifically.
MR. MICHEL SAMSON: Were you given any specific names of individuals that, as far as the board was concerned, they were looking to you to find a way of getting rid of?
MR. BARKER: No.
MR. MICHEL SAMSON: Were you given specific examples of any specific employees in the head office that the board considered, based under past experiences, were no longer wanted in the head office of the Nova Scotia Liquor Corporation?
MR. BARKER: No, the comments were much more general. It was more around the case of the executive needs to change, the business needs to change, the business processes need to change. It was that type of comment as opposed to specific names or identification of individuals.
MR. MICHEL SAMSON: In your previous experience, when a board would give you those kinds of instructions about the need for change, would you interpret that from your previous experience to mean that you actually had to see heads roll in order to achieve that?
MR. BARKER: Not necessarily heads roll, but necessary to have a lot of change right away. One of the things that happens when you move into a new corporation is you get a chance to be highly objective because you're looking at everything for the first time. As part of that, quite often, it does result in a realignment of roles, perhaps a change in people, certainly a change in practices and in a lot of the business processes that are going on inside the corporation.
MR. MICHEL SAMSON: As far as you were concerned in the 18 months that you spent with the Liquor Corporation, as far as the head office was concerned, did you consider any of the employees in the head office to be what has been deemed by some to be incompetent?
MR. BARKER: There were employees who no longer wanted to be a part of a new process or the new direction and those people left the organization. As far as people who were incompetent, I'm not sure that I would look at it that way, no.
MR. MICHEL SAMSON: During your 18 months, did you at any time give performance appraisals of some of the executives or the employees at the head office of the Nova Scotia Liquor Corporation?
MR. BARKER: One of the processes that the Liquor Corporation had not done well in past years was performance discussions. One of the things that I brought in was a forced, if you will, annual performance appraisal process and guaranteed that every single employee would receive a performance appraisal every year. In fact, last year, we had 100 per cent participation. So, yes, I did give a performance appraisal to my direct reports and they to all of theirs.
MR. MICHEL SAMSON: Were you the individual who specifically gave the performance appraisals for the employees at the head office or how were the performance appraisals carried out, might be a better question?
MR. BARKER: The performance appraisals were done by levels, so that my direct reports, I did them, and their direct reports were done by each vice-president and then management and so on and so forth throughout the organization, including the stores.
MR. MICHEL SAMSON: Out of the performance appraisals, which you carried out, or that you did see carried out, did you consider them to be a balanced and accurate reflection of the work product and the performance of these employees?
[8:30 a.m.]
MR. BARKER: Yes, in virtually all cases individuals would have strengths and they would have areas that required further development, and they would have action items, if you like, or performance accountabilities going forward. That would be true with each of the individuals, and I would suspect throughout the organization as well.
MR. MICHEL SAMSON: As I'm sure you are aware, giving a good performance appraisal to an individual certainly is a bit of a defence mechanism for that individual from any future action based on terminating their employment. At any time did you feel that the performance appraisals that you were giving to any of the employees at the head office were
an attempt by you or by others to act as a defence mechanism to protect these individuals from future job action by the board of directors or by yourself?
MR. BARKER: No, as a matter of fact we worked very hard at instilling a culture, throughout the management teams across the organization, of being honest, of being open and being fair. One of the things that I think was very clearly recognized and brought through those discussions was a need to be honest with people right upfront. So they either decided to stay and have careers with the Liquor Corporation or decided to move on to other opportunities. There was no sense, in my mind, whatsoever of ever trying to create appraisals, if you will, that weren't truthful.
MR. MICHEL SAMSON: One of the statements made by Mr. McCreath, when he did appear before the committee, and I think it was alluded to earlier, was that he felt that upon your arrival you surrounded yourself with what the board considered, if I can summarize, maybe the dark forces at the head office, which were holding the corporation back and not allowing the corporation to move forward. Do you believe that when you did arrive that you did align yourself with these dark forces and therefore were partnering up with the efforts to not allow the corporation to move forward?
MR. BARKER: No, I would completely disagree with that comment. I think over the 16, 17 months I was with the corporation, the amount of change, employees would tell me, was equivalent to the last 20 years.
MR. MICHEL SAMSON: Looking at the comments made by Mr. McCreath, if I was a potential employer and I looked at the statements of a lack of synergy with the board, the fact that once you came in they felt you aligned yourself with the individuals who were holding the corporation back, concerns about performance appraisals that were given, I would be quite concerned about hiring you, Mr. Barker, for my own business under those circumstances. I ask you again, if your potential employer is reading the Hansard of the Public Accounts Committee and hearing the statements coming from Mr. McCreath, how would you address those specific comments to an employer who is looking at potentially employing you for their own business?
MR. BARKER: I think in my mind it's a question of fit. I don't think that at any point there's been any question about my credibility or credentials, going backwards or currently. I think probably the organization developed in a certain direction, and the board obviously felt that they wanted to proceed with a different candidate. That has no particular reflection on me.
MR. MICHEL SAMSON: One of the issues that was raised was apparently, through some of the reviews that took place at the Liquor Corporation, it appears there was an error made by one of the vice-presidents over the years, and apparently that error had cost the taxpayers an up to $3 million loss as a result of this. Were you ever made aware of any of
your vice-presidents having caused a $3 million error during their employment, who cost the corporation that lost revenue?
MR. BARKER: Is there a specific example that you're referring to?
MR. MICHEL SAMSON: Well, I believe the vice-president of merchandising was identified as having caused an error which had, in essence, cost the corporation $3 million, and there was discussion around this. Was that incident ever brought to your attention during your tenure, by the board or by anyone else?
MR. BARKER: One of the people who left the organization shortly after I arrived was the Vice-President of Merchandising and Marketing. In fact she was replaced, and new processes were brought in rather dramatically.
MR. MICHEL SAMSON: Were you aware of any issues that the board had with that specific vice-president prior to her departure?
MR. BARKER: No.
MR. MICHEL SAMSON: That was not brought to your attention?
MR. BARKER: No, we did not discuss that.
MR. MICHEL SAMSON: Prior to her departure, did you perform a performance appraisal for that specific individual?
MR. BARKER: No, I did not.
MR. MICHEL SAMSON: You did not, okay. You said that that vice-president left on her own?
MR. BARKER: That individual left the organization and moved on with a new career.
MR. MICHEL SAMSON: As far as you're aware, was it clearly indicated to her that she was no longer wanted at the corporation?
MR. BARKER: No. I think a much fairer way to put it was that the new organization was explained to her and her new roles within that organization were explained, and she chose not to take those organizational responsibilities.
MR. MICHEL SAMSON: As I'm sure you're probably aware, Mr. Barker, there have been some police investigations into the corporation, some concerns about tender-fixing and some other issues that existed within the management of the Nova Scotia Liquor Corporation. Were you made aware of these concerns when you were first hired by the board?
MR. BARKER: It was several months after I had joined the organization. We had a concern by a private citizen, who mentioned it to one of our board members and subsequently he mentioned it to me. We did some internal work, obviously an internal audit, and at the end of that, both the board and myself fully agreed that we needed to perform an external audit and, as well, have the police look at it. My understanding, and I've been out of touch for the last several months, is that that audit, in fact, is still going on; the police audit, that is. So I don't know what has actually come out of it.
MR. MICHEL SAMSON: Under your own direction as the president and CEO, did you involve yourself at all in trying to address the concerns that were raised about the goings-on of the corporation?
MR. BARKER: This is probably a two-part answer. The first part is in terms of the details of the audit of the particular issue, absolutely, I was involved with it. In terms of the external work and the police investigation, I was not involved at all, except from the standpoint of bringing those parties into the fold.
MR. MICHEL SAMSON: Who was the manager of distribution at the Liquor Corporation when you were first hired?
MR. BARKER: The manager of distribution?
MR. MICHEL SAMSON: Yes.
MR. BARKER: There was a manager of our warehouse, would that be the role that you're speaking of?
MR. MICHEL SAMSON: Who was the manager of the warehouse?
MR. BARKER: It was Peter Belgrade who was the manager of the warehouse at the time that I arrived.
MR. MICHEL SAMSON: What was your relationship with Mr. Belgrade?
MR. BARKER: We spoke on a number of occasions. He certainly was involved in a lot of our forward planning. We were bringing in a brand new warehouse system, which is currently being implemented. So he was involved with all those discussions.
MR. MICHEL SAMSON: Did you have any concerns regarding his employment or any previous concerns that may have been raised regarding his employment?
MR. BARKER: No, not at that time at all.
MR. MICHEL SAMSON: Not at that time. What's the status of Mr. Belgrade's employment right now, at the corporation, as far as you're aware?
MR. BARKER: I can't speak to where he might be today. When I left he was off on sick leave, and I can't speak to whether he has returned to the organization or not.
MR. MICHEL SAMSON: How long was he on sick leave before you left the corporation?
MR. BARKER: My recollection is about a month.
MR. MICHEL SAMSON: As far as the allegations that were raised, how concerned were you with the nature of the allegations that were being raised both by a private citizen and by others who may have raised some concerns?
MR. BARKER: Extremely concerned. One of the things that we hold as very important inside of the corporation was the fairness and the perception, if you like, of fairness of the tendering process. Certainly nothing would have been allowed to cloud that, so going forward, we had to get that resolved.
MR. MICHEL SAMSON: Do you feel you acted in a timely and appropriate fashion in addressing the concerns that were coming forward?
MR. BARKER: Looking back, in hindsight, I think we probably moved forward as quickly as we could. We needed enough time to gather enough information. I think we were correct to do an internal investigation before we went external, from the standpoint of really trying to dig up the information that was there and to see if in fact there was any cause for concern. It was a lengthy process, but even in hindsight I'm not sure we could have done it any faster.
MR. MICHEL SAMSON: Two other executives were dismissed by the board after your departure. Is that correct?
MR. BARKER: That's what I understand. I believe it was in November.
MR. MICHEL SAMSON: Are you aware of who those executives were?
MR. BARKER: Yes, I am.
MR. MICHEL SAMSON: What was your performance appraisal of these executives during your tenure at the corporation?
MR. BARKER: My performance appraisal in summary fashion was that they were doing a satisfactory job in the positions that they were currently filling.
MR. MICHEL SAMSON: That was in your opinion?
MR. BARKER: That would have been in April 2003, yes.
MR. MICHEL SAMSON: Had the board expressed any concern to you prior to your departure about these two specific individuals?
MR. BARKER: I'm not sure I can say they expressed an opinion, but they certainly indicated a desire, I think, to make more changes at the executive level but it wasn't specifically directed at any one or two individuals, no.
MR. MICHEL SAMSON: As far as these two individuals, their performance appraisals, what would their performance appraisals have said prior to the board deciding to dismiss them?
MR. BARKER: I'm not sure if any other appraisals were done after the one that I did last year. So if that was the last appraisal, they would have looked like satisfactory employees.
MR. MICHEL SAMSON: I know my time is running short and we will have another chance to come back, but if someone was to ask you today, as private citizen Barker, with the experience you've had with the Nova Scotia Liquor Corporation, if someone put the question to you, who runs the Nova Scotia Liquor Corporation, the president and CEO or Peter McCreath and the board of directors, what would your response be?
MR. BARKER: On a day-to-day operating basis, clearly the management or executive team does run the organization.
MR. MICHEL SAMSON: Based on your previous experience, have you seen an instance where a board has gone out of its way to dismiss employees and discipline employees on its own and having in camera meetings, apparently, to discuss this rather than doing it through the president and CEO?
MR. BARKER: I have not been through a situation like this before, no.
MR. MICHEL SAMSON: This is the first time you have seen a board take action such as this board has taken.
MR. BARKER: Just to qualify that, I guess, I have seen boards terminate contracts for CEOs, there's no question that that has happened before. I'm not sure if it's all that unusual, certainly the CEO does report directly to the board.
MR. MICHEL SAMSON: Have you seen instances where the board not only has dismissed the CEO but has gone out and actually dismissed other executives without even allowing a new president and CEO to come in prior to taking that action?
MR. BARKER: No, I have not.
MR. CHAIRMAN: The member for Preston, I believe you were indicating that you wanted to ask some questions.
MR. KEITH COLWELL: Yes, I do.
MR. CHAIRMAN: You have a minute and a half.
MR. COLWELL: When Mr. Peter Belgrade went off on sick leave, that was, you said, about a month before you were terminated by the board?
MR. BARKER: I believe so.
MR. COLWELL: Now, did the board have concerns about the external audit or the police audit that was going on that you were putting forward to correct the situations that you had potentially seen in the corporation?
MR. BARKER: The board was very supportive of conducting both a police investigation and the external audit. At the time I left, both processes were still in the works, so we did not have a conclusion.
MR. COLWELL: At the time you were there at the board, there was an interview conducted at one time here and the board gave a reason for your termination. One of the reasons for the termination, according to one of the officials at the Liquor Corporation is that you gave a satisfactory report on an individual that had indeed lost $3 million for the corporation. Would that be true, one of the executive people?
MR. BARKER: I'm not aware of that situation. I believe you are referring to the person who left shortly after I arrived at the corporation, so I would not have been involved with that appraisal process if, in fact, there even was one done.
MR. COLWELL: They indicated . . .
MR. CHAIRMAN: Order, please. I'm afraid the time for the Liberal caucus has expired, just hold that thought, member for Preston until the next round. We will now move on to the government caucus.
The member for Kings North.
MR. MARK PARENT: Thank you, Mr. Barker, for appearing before the committee. I have to commend you on your graciousness in appearing. It seems to me just from a superficial glance - I'm sitting in for another member - that this is really a human resources issue and for you to have to appear before this sort of scrutiny is very gracious on your part. I hope it won't in any way hurt future job prospects for you. I think our caucus would have preferred to spare you from this sort of questioning and to allow the human resources issues to go forward by their appropriate channels. Nonetheless, you are here and you have been very gracious to be here and very open with us and I want to thank you for that.
It's my understanding that you and the NSLC board went separate ways on good terms. Is that an accurate assessment or is that inaccurate?
MR. BARKER: I can only speak for one side of that and from my perspective, absolutely I would agree.
MR. PARENT: That your relationship was amicable at the end. What would you characterize as your main achievements in the time that you spent as the President and CEO of the NSLC? You talked about the amount of change and bringing the board into a sort of new era of transparency and accountability and openness, can you talk a little bit more about that?
MR. BARKER: Certainly, on a very sort of general senior level, the organization was very much of a top-down command and control type of organization, it had developed into that over the last 70 years. One of the things that we brought in and certainly it's something that's very important to me was we dynamically increased the amount of communication both with suppliers, with staff, with customers, right across the organization.
When I say that, we talked about giving information about the business, we talked about the whys and what we were doing. We talked about where we were trying to go, we talked about future visions and we talked about where the business needed to be taken to remain competitive. A lot of that was new and a lot of the people had never heard that before. So a lot of the initiatives that we took during those months were really to bring the organization along to where everybody felt like they were actually connecting with where we were trying to go.
MR. PARENT: I'm interested - you said this is the first Crown Corporation you've worked for and I commend you on not being bitter about the experience, I hope that you're still open to that type of work - how would you characterize the difference between a Crown Corporation and the previous management positions you have had?
[8:45 a.m.]
MR. BARKER: It's probably not a surprise at all that there is certainly a need to consider the political agenda much more in a Crown Corporation than there would be in a public or private organization. I don't think that's a surprise and I think that's probably true right across the board, whichever province, whichever Crown Corporation you may be in. Other than that though, the day-to-day operations of the business, the making of the money, the staff development, the customer service, those are very, very common in both.
MR. PARENT: So you're able to use the skills from the previous background to bring to the work that you brought to the NSLC. What would be your main achievements that you would characterize having served there?
MR. BARKER: We left behind a much more open organization, an organization where employees at all levels are participating or discussing or involved in the processes, whether it be budgeting, whether it be setting plans going forward, whether it be performance appraisals, a whole variety of different initiatives to bring people again into the fold to make them feel that they were connecting with the corporation.
We also did a lot of work in terms of customer service. The organization had moved from a distribution model, if you think back, really the liquor board evolved simply to distribute alcohol and it was a monopoly and it was a one of a kind and it basically just simply existed to distribute. We were very successful in moving that forward and considering things like product selection, like store design, like lighting, branding, a number of new initiatives which brought it into the retail world as opposed to a distribution world. That's a significant departure from where it started out.
MR. PARENT: One of my interests, of course, coming from an area that is traditionally known for agriculture and really, the dominance of apples, but what I've been surprised at is the growing number of vineyards in my area. This is sort of an aside, I guess, from the main reason you're here but I would be interested to see if you have any input on Nova Scotia wines and the future that you see of that and their relationship with NSLC, because sometimes it has been a bit stormy one, I guess.
MR. BARKER: One of the mission statements that we put together very clearly identified the need to support and help the economic growth of the Nova Scotia wine industry. One of the key performance drivers for the executive was to grow that business every single year. So from a dollar perspective or from a piece of the wine market share, that
increased every single year. So we were very supportive and spent a great deal of time with the grape growers, with the individual wineries and certainly providing expertise as we could and merchandizing support from the standpoint of the store level design to really feature Nova Scotia products. The wine industry in Nova Scotia I think has a tremendous future. There are some wonderful people working in the business and I think it is going to become more and more dominant in the province and also outside the province as well.
MR. PARENT: So this is one of the achievements too in the tenure that you had there beginning to advance the future of the Nova Scotia wine industry?
MR. BARKER: It's a continuous and a long process, because you're competing with some very, very major players, both domestically and internationally. But we have some very good products in Nova Scotia. We have some very, very dedicated people and as we move forward I think you will continue to see that kind of growth in the market.
MR. PARENT: You talked about the amount of change that you brought in within your short tenure, that you brought in more change than had been previously the case in the past 20 years. Can you be more specific about what those changes were and looking back, was it too fast, too slow, how would you characterize that?
MR. BARKER: That's probably an interesting question from the standpoint that the level of organization to accept the change, in other words how fast can an organization accept change without basically causing all kinds of problems internally and externally has to be balanced. One of the things that we were very cognizant of was to do the major changes that would have the biggest impact first. So we did some realignments of executives, we did some alignment of roles, we were looking at a number of technologies that we are bringing in now; as a matter of fact, they're being installed as we speak to improve warehouse operations and inventory control and ordering systems and a number of just sound business practices.
Did we go too fast or too slow? That's highly a matter of opinion. In my view, we balanced the needs of the organization and its capacity to change. Others may well feel differently.
MR. PARENT: I'm just interested because in my previous work as a minister, oftentimes you would see - a religious minister, I should specify in this political setting - a long stay by a minister and then a short one by someone who comes in, whose mandate is really to change and to make some changes and then they move on to somewhere else. So you see that pattern. I'm just wondering if that pattern falls in business as well where you have this period with no change and then someone comes in, makes quite a few changes but their tenure, by and large, is normally shorter than others. What would you suggest are areas that need improvement with the NSLC, if you were still with the board, or in a memo to a
future CEO, to your successor, what would you suggest still needs to be done and what area should be continued on, perhaps some areas that should be changed?
MR. BARKER: I think in many ways, it is staying the course. I think over the last 18 months the organization has initiated a number of projects, perhaps a very wide range of products would be a better way to say it. So everything from IT developments, we have talked about that. We have talked about a lot of work in the design of stores; a lot of work in the marketing area in terms of product selection, product display; a lot of work in social responsibility, in providing enhanced leadership in that area. I think a lot of those initiatives will bear fruit down the road and perhaps they are starting to do so now but it is staying the course to make sure those things are all completed, I think would be my advice.
MR. PARENT: One last question before some of my colleagues take over. It seems that your departure, from your viewpoint, was amicable. The severance, I assume, you feel was fairly fair. You must have some sort of question as to why you would even be brought before a committee like this. Do you have some concerns about being here today in that regard or do you feel quite comfortable appearing before us?
MR. BARKER: I think it is an important part of the process for the people of Nova Scotia, I guess is the best way to put it, to feel that they got good value for their money, that in fact that organization, which is so important to the province, is in fact moving forward correctly and in a way that is positive for the province. So, am I surprised to be here? Not really, if I can help the process going forward.
MR. PARENT: Well, I appreciate your attitude and I will turn the questioning over to my colleague.
MR. CHAIRMAN: The honourable member for Chester-St. Margaret's.
MR. JOHN CHATAWAY: Mr. Chairman, colleagues and friends, I certainly very much appreciate that we have this conversation. I know that every week the Public Accounts Committee meets and certainly we investigate various parts of Nova Scotia and as you have just said in answer to Mark's question, the Liquor Corporation is very important to all Nova Scotians. In your introductory comments, basically - correct me if I'm wrong - you said when you were out West you were in the oil business and then in Ontario in the grocery business and then you took this title down here. That is certainly what the Liquor Commission - this is the Liquor Corporation, and, obviously, they certainly needed new blood to think about it and go ahead.
Basically, I'm just reading some of the notes here in the briefing material sent to our caucus, an editorial by David Rodenhizer in The Daily News, Sunday, January, 18, 2004, "Credit goes to Premier John Hamm's government, though, for converting the old liquor commission to a corporation in 2001 to help root out such expensive inefficiencies.", and
indeed from what I understand, of course, there were all sorts of inefficiencies and great costs and certainly not the modern way of doing business. I presume that you do not intend to sue the Liquor Corporation for wrongful dismissal or anything like that, do you?
MR. BARKER: No, I don't.
MR. CHATAWAY: No, I didn't think you would either but certainly some people are trying to give the impression that we should be going the way of a court. My, my. I think we all appreciate your definition of what happened because I know that the Liquor Corporation and the Chairman of the Board, Peter McCreath, and the others, they basically did not rant and rave or even start to dismiss you for your incompetence and stuff like this. Basically the synergy got changed and whatever, and they certainly met some challenges. My oh my, from what I understand the Liquor Commission started in 1930 and it stayed in that very great thing until 2001. Did it change? Very, very little. Communication was based on things put in in 1987; the world has changed since then.
The retail and the grocery business, et cetera - because that's what liquor stores are selling - if you have a store, you want to have 90 per cent retail business and 10 per cent for warehousing. Basically, when the Liquor Corporation was formed, it was about 10 per cent retail space and 90 per cent warehousing space. Nowadays, from what I understand, about 60 per cent is warehousing and 40 per cent is retail, on the average. Should it be improved? It certainly will be improved and has been improved, and we very much appreciate you helping out on that. This is not my political speech but I tell you, one thing about this corporation, maybe you could tell me about the consumer satisfaction index. Could you tell us about that?
MR. BARKER: Yes, I would be pleased to. One of the initiatives that we brought in during my tenure was a customer satisfaction index, as you pointed out. What we noticed, I guess, or observed, was in the past, customer information was only brought in at a very ad hoc level. So customers, from time to time, might call the Liquor Corporation, they might send in a comment card, they might talk to a staff member.
One of the things we did not have was any kind of a formalized process to measure how we were doing as a customer service. On that basis, we worked with an outside agency and developed a third party, quantitative customer service and customer satisfaction index which, at the point when I left, every two months was actually measuring very hard measures of how we were doing in customers' perceptions right across the province. That became a key accountability of all executives and all management people to see that increase month to month, year to year. That's a very important part because it's very quantitative, it's not subjective; it does allow the corporation to very clearly focus on the main reason why they exist, which essentially is the customer service and customer satisfaction.
MR. CHATAWAY: From what I understand, when the corporation had a session with us, their goal next year is to have a satisfactory customer for 70 per cent of the respondents, and they're building it all the time. I think it's very important that in order to improve all personnel in the business, you have to have goals and do whatever you can to encourage them to do the best they can. Oh my goodness, I understand, of course, in 1997 to 2001, there was some $6 million in sick-leave cases. What were the highlights from the time you were CEO? It was a changing time, I'm sure, but what were the highlights, or what do you think was the best part - the highlights?
MR. BARKER: I think for me it's probably true with every job that I've had, from the standpoint that it's always about the people, and I say that on a couple of different levels. At the board level, we had a brand-new board, people who had not even known each other previously, and we worked together to try to build something there that didn't exist before and that was well on the way of doing very well.
Inside the staff ranks, a number of people who were simply used to implementing without thinking, without being asked for their views, without understanding where the business was even trying to go, we were able to make tremendous inroads, I think, into getting those people involved and to harnessing both the hearts and minds of those people to really drive the business forward. So that gives me a tremendous amount of satisfaction from the standpoint that you now have 1,200 people focused on making the Liquor Corporation the right place to be, as opposed to perhaps four or five at the top. That sounds perhaps too simplistic, but that's just about exactly what happened.
[9:00 a.m.]
MR. CHATAWAY: Well, I certainly feel confident, I think everybody would agree with those sentiments.
I know our time is up for this session, but I would like to thank you and the corporation for having agency stores. My, oh my, oh my, I have the honour of representing Chester-St. Margaret's, and for years and years and years, if a person wanted the smallest bottle of wine or a case of beer, or whatever it was, they had to drive literally 100 kilometres, round trip, and inevitably, oh, it was fine, it was fine, but they finally got to bring the service, the Nova Scotia Liquor Corporation to all parts of Nova Scotia and it's very good. The main thing is, of course, what we're doing is in the past, we're certainly improving the money that we have put into good things in Nova Scotia. I mean I can go on for hours but basically I think our time is up.
MR. CHAIRMAN: Mr. Chataway, you have a minute and a half left, but there is no compulsion to use it.
MR. CHATAWAY: I will go for a minute and a half, that's for sure. Of course, I understand that last Christmas, Grant Thornton made 57 recommendations to the board. Obviously, you weren't there to hear them but can you give any comment on that; why do you think they brought in 57 recommendations to the board?
MR. BARKER: Absolutely, I think I can make a couple of comments even though, as you say, I was not involved at the end of the audit. Twenty of those recommendations were internal processes inside the Liquor Corporation that needed to be adjusted, updated, corrected and of those, I would say the majority were already in progress. A number of them spoke to inventory control, there is a brand new warehouse system currently being installed in the corporation. A number of more minor issues, if I may call it that, such as job descriptions being updated were also in progress, and that's just a lengthy period and it will be completed and probably already is completed. So there were a number of those things.
The board, I think, much to their credit had asked for the auditor's comments on governance and 37 recommendations did come forward. I can't speak to how those are proceeding but certainly the direction of the audit comments that I've seen very much align with where the board wanted to go anyway. So it was a question of clarifying, perhaps, or helping to validate the direction that they were heading into.
MR. CHAIRMAN: We will start a new round of 20 minutes, moving back to the NDP caucus.
The member for Dartmouth South-Portland Valley.
MS. MARILYN MORE: I think I share the frustration of many of the members of the committee in that somehow we're not getting to the problem that we sense is there. I have been on a board and chaired boards, been a chief staff person for over 30 years and I just feel there is a part of this story that we're still not hearing. Obviously, we're not asking the right questions. So I want to concentrate a bit on the role of the board and the role of your office and the executive team.
In the series of interviews leading up to your selection as president, do you remember if there was any clarification or explanation of your role versus that of the board?
MR. BARKER: Only in the most general terms. Again, from the standpoint of the business requiring change, requiring new processes, new practices to be brought in, that was discussed at that level. But in terms of any specifics, this needs to be fixed or that needs to be fixed, I don't recall that happening, no.
MS. MORE: With the transition to the Crown Corporation and with the realization that this was a fairly new board in a new role, was there any priority on the part of the board in the beginning to make that clarification to have a good understanding of their role versus the day-to-day operations of the corporation?
MR. BARKER: I think, again, to their credit, the board initially looked to myself to come back with some initial recommendations or observations, again, during that objective first few months. In fact, they were most receptive to having discussions around realigning executives, realigning departments, realigning roles in the corporation. That was the main area of focus. Now, outside of that, the board was also developing internal processes, board committees, a number of other things at the same time, concurrently.
MS. MORE: When did you get a sense that what you were doing might have been out of sync with the direction the board was going in?
MR. BARKER: Over the months, from time to time, we would have some very interesting discussions with various board members, not just Mr. McCreath, about a number of issues, which I suspect is part of a healthy CEO-board relationship, where there is a creative tension from time to time, I guess. But as far as not meeting their needs or doing something which they did not want to have happen, that was not at all clear to me, no.
MS. MORE: Did the in camera sessions, where you were not invited to attend, happen more frequently towards the end of your tenure with the corporation?
MR. BARKER: Yes, I would say that would be true.
MS. MORE: Did they raise any flags for you? Were you concerned about this?
MR. BARKER: It was when the Grant Thornton external audit of the business was going on and at that point in time, one of the things that we all agreed to was the audit had to be absolutely objective, and it had to be perceived to be very objective. On that basis, I offered my services to be available, but I certainly did not want to get involved on a day-to-day, so from time to time the board met to discuss the status of the audit, and for me not to be there actually made sense given the fact that they wanted to make sure that it did not look at all like the corporation was involved in terms of how the audit would work out.
MS. MORE: When one thinks about due process, one would consider that if there were any concerns that what you were doing didn't match either the speed or the objectives of the board, that there would be some frank discussions and a chance to sort of realign or better understand if the board wanted to do something differently. Did that ever happen?
MR. BARKER: Again, from the standpoint of on a day-to-day basis over the months, we had discussions about a number of issues. Were there specifically one, two, three, four that were identified as these must be fixed or you can't be here? Absolutely not, no.
MS. MORE: In reflecting on what happened - obviously, you must be looking for some answers for yourself to have sort of a sense of closure and moving on to another position - would you have done anything differently? Would you have asked for more information, for example?
MR. BARKER: I think in hindsight I should have realized that there were larger gaps, perhaps, appearing than I had recognized at the time. I assumed that these discussions that I'm speaking about towards the end were simply the ongoing business-type discussions which you would normally have. In fact, if I could do it all over again - I guess hindsight is wonderful - I probably would pay more attention and I would have recognized earlier on that these rifts were getting larger than I would have initially thought.
MS. MORE: But at that time it just never crossed your mind that the consequences would mean the termination of your contract, nothing seemed that serious?
MR. BARKER: A very large number of very interesting but very time-demanding projects were on the go, from both a board perspective and an executive perspective. Certainly the energy was focused there and perhaps not enough energy on my part focused on the political situation inside the corporation.
MS. MORE: If you had to come down to one reason that the board felt the two were out of sync, what I'm hearing is it might have been more to do with the speed of implementing the change and reaching the goals. What was driving that, why did they want to do things faster?
MR. BARKER: I don't want to speculate here, but certainly from what has happened since I've left, I believe that the board would have liked to change the executive in a broader sense, more rapidly. I think that's fair to say. As far as specifics around the day-to-day business, I have not heard anything to suggest that we moved too quickly or too slowly. Now, that's my perspective; the board may have a very, very different view of that. But from the information I have, we have never had any discussions around the business but we have certainly talked about the leadership group and whether or not the board was pleased by the fact that those people were there or not there.
MS. MORE: So, were you getting a sense that their concern about the leadership group was with the individuals there or what they were implementing? I mean, I'm beginning to get a sense that perhaps they wanted to put their people in.
MR. BARKER: I can't really speak to that. The termination of the two vice-presidents after I left was a couple of months since and I have only spoken to each of them once; we just had difficulty getting together. But certainly their perspective was the fact that there may have been other discussions, the board may have had other things going on that I'm not even aware of with those individuals.
MS. MORE: Wouldn't you expect to be informed?
MR. BARKER: Well, by that time I was gone from the Liquor Corporation. Sorry.
MS. MORE: Oh, I see. There is always the fine line between providing stability to a large organization, which the Liquor Corporation is, and moving forward. I have to say, I am impressed with what I've heard about the way that you have instituted the change and tried to involve all the people impacted by it. That seems a very reasonable approach. Was the board behind you in doing that?
MR. BARKER: In hindsight, I guess I would say that at the beginning the board was 100 per cent behind the direction we were moving in and was very pleased by the changes that were being made. I can only assume that toward the end they were less pleased.
MS. MORE: So was it your approach? Where do you think the distinction can be made?
MR. BARKER: We talked a little earlier on about balance. In my mind it's trying to balance, again, the organization's capacity to change and the need to change. In my mind, we were conducting a balance which made a lot of sense. The board may have seen that balance as changing and not in a favourable way.
MS. MORE: Do you feel the board was aware of the responsibility to ensure due process during immense change in organization?
MR. BARKER: I think the board recognized the level of change in the organization was very significant. I can't really give you an example of how they felt about supporting it or not supporting it. I think they were pleased with the direction and they certainly were working in the same direction as the executive team was. We weren't going in opposite directions.
MS. MORE: Since your termination, have you talked to any people who are familiar with the operations of Crown Corporations? Did you have any curiosity about whether this is a typical situation?
MR. BARKER: Only other heads of liquor boards, many of them contacted me to just pass along their best wishes, I guess, going forward.
MS. MORE: Did you discuss with them how things operated in their respective provinces?
MR. BARKER: It didn't really come up. It was more a personal type of conversation in most cases. It really wasn't about the job, if you will. It's more a question of we have met you, we like you, all the best going forward, how can we help, that sort of thing.
MS. MORE: You mentioned that you suspected the Crown Corporations might be a little more politically driven because of the nature of the organization. In your mind, is there a difference between that sort of natural political involvement because they are a creature of provincial governments and federal governments and sort of a political agenda? Do you see a difference there? Did you get a sense that perhaps there was a political agenda driving some of this?
MR. BARKER: I think a lot of the decisions that were made inside of the Crown Corporations, in this case the liquor board, considered the political implications in a different way than you might have had you had a single stakeholder in perhaps a private company or something like that, yes.
MS. MORE: To your knowledge, was there any information coming to the board about the need to create larger profits more quickly?
MR. BARKER: Absolutely. We discussed that regularly at board meetings.
MS. MORE: So did the board develop sort of a plan of a reasonable range to aim for each year or do you think there was additional pressure put on?
MR. BARKER: We spent a significant time each year doing the business plan and working through a number of iterations of that plan, getting inside information, outside information to balance and to make it as effective as possible. Throughout the year we had many planning sessions, if you will, again focused on profitability but the major efforts are during the planning process.
MS. MORE: So the last business plan that you were involved in implementing, anything unusual?
MR. BARKER: No, as a matter of fact, it is a very aggressive plan and it will end at the end of this month, as everybody is aware, and my understanding is the corporation has done very well so I will look forward to seeing what those results look like.
MS. MORE: And you were in support of that particular plan and the process used to develop it?
MR. BARKER: Yes, we spent a great deal of time on that plan and in fact it was extremely well thought out.
MS. MORE: So were you in tune with the board, though, in terms of how that plan would be implemented? Were there any incongruities there?
MR. BARKER: Not that I am aware of, no. We had congruents in terms of direction, in terms of timing, in terms of the result that we had to get to.
MS. MORE: Do you understand why we're puzzled?
[9:15 a.m.]
MR. BARKER: I think I can understand, as I mentioned earlier, the need for this committee to feel satisfied, if you will, that the people of Nova Scotia were well treated and received value for their money.
MS. MORE: And I think we feel some responsibility to feel that you were well treated as well. I'm getting a sense that there is something just not straightforward here and I really am frustrated in terms of trying to put my finger on it. I think I will pass it over to my colleague at this point.
MR. CHAIRMAN: The honourable member for Halifax Chebucto.
MR. EPSTEIN: Mr. Barker, there were, in fact, two Grant Thornton reviews that were done. One focused on internal controls at NSLC but the other had to do with governance. Now quite clearly, from your remarks, you have seen both of these Grant Thornton reviews. Is that right?
MR. BARKER: I have only seen the part of the reviews that were made public. There are a number of findings, I guess, that apparently were not released and I have not seen those.
MR. EPSTEIN: In terms of the reviews, the parts of them that were made public, were you supplied by the committee with the materials that we are dealing with today?
MR. BARKER: Yes, I was.
MR. EPSTEIN: Okay, so in fact that included both of those reviews or at least to the extent that we have been provided with them by the NSLC. Is that right?
MR. BARKER: That is correct.
MR. EPSTEIN: So you have had the chance to read them.
MR. BARKER: Yes, I have looked at them.
MR. EPSTEIN: Okay, now I want to focus on the governance review that Grant Thornton did. This was something that was dated in December so it was after you left the NSLC but I don't know when this was initiated. Can you tell us when this process was initiated?
MR. BARKER: My recollection would have been June 2003. I believe the audit took in the neighbourhood of five to six months.
MR. EPSTEIN: All right. So it started during your time.
MR. BARKER: Yes, that is correct.
MR. EPSTEIN: But it was delivered to the board some months after you left.
MR. BARKER: Right.
MR. EPSTEIN: Okay, now in terms of governance, I was struck by a couple of things. They applied a number of criteria to their screening of governance at the NSLC. The first criterion had to do with what they called clear roles and responsibilities for the board. That was their number one criterion. They suggested that there has to be no overlapping confusion in the roles of the board and the president. They said that, "The Board delegates management responsibility for the organization to the President and ensures a proper performance evaluation . . .", but essentially they thought there should be a confined role for the board.
They made a comment, for example, on Page 8, "During our interviews, it was apparent that there is tension between the Board and senior management with respect to their respective roles." Did you see that statement in their report?
MR. BARKER: Yes, I did.
MR. EPSTEIN: Were you surprised to see that statement?
MR. BARKER: I wouldn't have used the word tension, I would have used the word confusion.
MR. EPSTEIN: Confusion, okay, but they did use tension.
MR. BARKER: Yes.
MR. EPSTEIN: And tension indicates that there is a problem in the view of Grant Thornton. Isn't that how it is to be read?
MR. BARKER: My take on that information, when I saw it, was that the executives did not have a common understanding of the role of the board, that perhaps the board did not of the executive either.
MR. EPSTEIN: Well, we have Grant Thornton's word. Now if we look at their recommendations, particularly the ones in the category having to do with defining the role of the board which really are the first eight or 10 of their recommendations, they recommend that there should be, "Facilitated dialogue between Board and President to clarify respective roles and approach to their working relationship." They say that the board should spend time outlining the board's role as policy maker. They say that the corporate governance committee, which is a committee of the board, should " . . . develop a comprehensive description for the President's role for the Board's review and approval." They talked about updating their governance bylaw, " . . . to set out the Board's role in communications and relationship management." Then they say they should also revise that bylaw, " . . . to eliminate the statements with respect to making specific policy and to indicate that the Board will establish policy, as needed, to govern the corporation and will monitor performance against same."
Now I read that to you because here is what it says to me. What that says to me - remember these are the first and most important of the recommendations, the first screen that Grant Thornton chose - is that they think there is a problem in terms of lack of clarity between the role of the board and the role of the president. It says to me further that Grant Thornton has come to the conclusion that the board has gone too far in terms of their attempt to micro manage the NSLC. Now do you have any reason to read that report any differently?
MR. BARKER: Only from the standpoint that, in my view, having read the exact same information that you've just gone through, there is a tremendous need, in my mind, to develop a job description, for lack of a better term, for the president. In the absence of that, there was confusion throughout the organization, particularly at senior levels, obviously, on whose role and responsibilities various activities fell into. So I completely support - as a matter of fact, one of my inputs to Grant Thornton was that point - the need to clearly define the role of the president, if, not for the president's sake but certainly for the benefit of the organization, so that they were very clear.
MR. EPSTEIN: It doesn't sound as if the president, you, misunderstood your role. Your role, as president, is to run the organization and the role of the board would normally be to set general policy directions but to do that through the president, to tell the president in general what the policy of the organization ought to be, but to leave the management of the organization to the president. Isn't that really the case?
MR. BARKER: I think that's a very good comment and I would say that was exactly the way it was explained to me when I was recruited.
MR. EPSTEIN: Was it your experience of your time there though?
MR. BARKER: No, the point that I would make on that is, it clearly requires more definition than simply that broad a statement.
MR. EPSTEIN: It's not a question of definition on paper, the problem is what actually happened. What I'm asking you, really, is, do you think that the board really crossed the line in terms of moving into territory that should be the president's?
MR. BARKER: No, I don't believe it that's simple. I think on many issues it was confusing and it was fuzzy in terms of who was managing what. I think to the staff particularly, it was not clear whose role and responsibilities various activities fell into. There's certainly a need to clarify it.
MR. EPSTEIN: We'll get back to that, thank you. I think we'll just move to the next.
MR. CHAIRMAN: Okay, thank you, we will move on to the Liberal caucus.
The member for Preston.
MR. COLWELL: When my time ran out before I was asking you about one vice-president who supposedly made a $3 million error for taxpayers, could you tell me who that person was?
MR. BARKER: I believe it was the previous vice-president of merchandising and marketing, Yvonne Melanson.
MR. COLWELL: When would that termination have taken place?
MR. BARKER: My recollection would be August 2002.
MR. COLWELL: So that would have been shortly after you came on.
MR. BARKER: Yes, I joined May 1st.
MR. COLWELL: It's odd, because some information that we had received from a communications officer with the Nova Scotia Liquor Corporation indicated that one of the reasons you were terminated, that you were ordered by the board to fire incompetent executives, is that true?
MR. BARKER: Absolutely wrong, that's not true.
MR. COLWELL: Then they said the last straw was because you didn't fire one VP because of a mistake that cost the taxpayers $3 million. That doesn't appear to be true either, does it?
MR. BARKER: I have never heard that before, no.
MR. COLWELL: That's what they've told us and they said that was the last straw and that's when the decision was made to terminate your contract. From what I'm hearing, the work you had been doing there was very positive. It still begs the question of why you were terminated.
Also, my colleague asked about the insinuation that you got involved with or you befriended the worst element of management at the Liquor Corporation and became part of the problem. Would you describe that as being accurate?
MR. BARKER: I think that's very disappointing, to paint any of the executives at the Liquor Corporation in that way is very disparaging. These are good people who were doing what they believed to be the right things and, in fact, one of the things found coming into the organization was there was a better or a different way to do things and, in fact, that's what we worked on. But to call them something in negative terms doesn't make any sense to me at all, no.
MR. COLWELL: It doesn't make any sense to me either but those are the comments that were made by some of the people in communications when we directly asked them why you were terminated.
There was a gentleman asked off the premises of the Nova Scotia Liquor Corporation, one of the senior people, do you recall who he was, when the police investigation was underway or just started or prior to that?
MR. BARKER: Was asked to leave the premises?
MR. COLWELL: Yes.
MR. BARKER: No, I do not recall that.
MR. COLWELL: Do you know anybody who might have done something like that?
MR. BARKER: The police investigation as far as I'm aware never entered Bayers Lake, it was strictly done outside of the facility.
MR. COLWELL: On the issue of privatization, what was the direction that you were told by the board to go in?
MR. BARKER: I was very much aware of the huge amount of work that had been done on the privatization study and I was also aware of the approval, if I can use that term, to proceed with agency stores and then subsequently with private wine and specialty stores. Both of those are huge initiatives that took a great amount of time and we were moving forward with those. So the issue of privatization never actually came back onto the table at all.
MR. COLWELL: Was there any move to put full service outlets in Sobeys or a Superstore?
MR. BARKER: There are, currently, I believe the number is 14, outlets that are currently in a Superstore or Sobeys, about seven in each. Certainly, the strategic value of those outlets is very, very effective and that would be a direction going forward to add more of those types of opportunities.
MR. COLWELL: Were you directed to do that sort of thing by the board at the time going towards more privatization, more use of Superstores or Sobeys or whatever?
MR. BARKER: No, it was not directed by the board, it was a clear strategic advantage to do so.
MR. COLWELL: Who would be involved in making that decision to place outlets in supermarkets?
MR. BARKER: It started a number of years ago and it started as a test, if you will, and it's highly, highly, effective from the standpoint that you're able to attract a larger number of people through the grocery outlet and through the liquor outlet. So it's extremely effective and there's huge synergy from the standpoint of a large parking lot, lots of visibility, great locations, wonderful real estate and those benefits very quickly made it the preferred strategy going forward. So there wasn't a decision, per se, strategically it was and continues to be a direction of the corporation.
MR. COLWELL: Was there any move to privatize that process? I understand that the value of having an outlet that's run by the Nova Scotia Liquor Corporation attached to a grocery store, that's just another landlord relationship and that is fine, but is there any move past that to actually have staff from Sobeys or Superstore, whatever the chain might have been, to actually perform the duties that a unionized employee would do at the present time?
MR. BARKER: We never discussed that, no.
MR. COLWELL: Was there ever a plan put in place, that you're aware of, to privatize the corporation?
MR. BARKER: Apparently, there was a large review done before I arrived, but during my tenure, no.
MR. COLWELL: Do you believe the Nova Scotia Liquor Corporation would operate more efficiently as a private entity?
MR. BARKER: I think it's a question of balance. I think what we've learned very clearly was that in urban areas, having a corporate Nova Scotia Liquor Corporation makes a great deal of sense and a lot of that is based on the fact that as we move forward with broader product selection, more of a retail focus, there is a tremendous amount of expertise required. When customers come in, they're looking for a particular wine to go with a particular meal or a particular spirit to go with a particular beverage, that expertise has to exist. So to have a very, very strongly trained core group of employees makes a whole bunch of sense.
I think we've also found from the Unisys study and review of the agency program that in remote areas, which are seasonal perhaps or will have smaller sales, it makes a huge amount of sense to look at an agency network as well. I think perhaps the question is the balance between those two, I think. But I do not advocate that we privatize the entire corporation, no.
MR. COLWELL: Were you ever approached by the board or any board member for political hiring purposes, in other words, I would like to have this person hired?
MR. BARKER: No.
MR. COLWELL: Ever?
MR. BARKER: No.
MR. COLWELL: When were you first made aware of the problem with sick leave?
MR. BARKER: Before I arrived at the corporation.
MR. COLWELL: And what steps were taken when you were the CEO of the Liquor Corporation to correct that?
MR. BARKER: As a matter of fact, a lot of the sick leave issues had been there for many, many years and I think were indicative to some degree of the culture and a lot of that comes from a command and control, strictly "execute, I'm not really sure what I'm here for" type of mentality.
A number of initiatives that we brought into place, the first one sounds simple but it's about education and awareness. We made people aware of what it costs. We made people aware of the fact that when they weren't there the other people in the store obviously had to work harder, it was more difficult to get staff and so on and so forth. We also made them aware that with a customer satisfaction index, you can't have customer service if you don't any employees. So we linked all of these strategic values together and really focused on sick leave as a major opportunity to improve all of those characteristics of our business. We also started tracking sick leave in a different way. Now there is a monthly report that is done by our employee relations group which is publicized across the corporation which tells us exactly how many sick days were taken that month versus years gone by. So the positive trend is very important. Lastly, but perhaps the most important of all was every executive and every manager has, as one of their key accountabilities, a reduction in sick leave costs every year.
[9:30 a.m.]
MR. COLWELL: That's good. The issue with contracts that was brought forward by a company out of Pictou that subsequently went bankrupt for trucking, could you tell me a little bit about that? I believe it was McInnes Transport of Pictou that had the contract for 40 years.
MR. BARKER: Yes, that is correct. The individual, Mr. Peter McInnes, had spoken to our board member in that particular area, who brought it to the board and brought it to my attention. We immediately were very concerned and met with Mr. McInnes on three occasions to understand the details, understand the concerns, understand exactly what had happened because this had all transpired a couple of years previously so there was a bit of a time lag here. Recognizing that there were some concerns, we completed an internal audit of the process. We went right back to the beginning and, if you like, rebuilt the entire tendering process going forward. We didn't like what we saw either. We were concerned that there were some red flags in there. Bringing it to the board's attention, we unilaterally agreed that we needed to bring in an external auditor and that, again, was when the Grant Thornton folks joined our group as an external auditor to have a look at the whole process. Now I don't know what the end result is of that but that was going on when I left.
MR. COLWELL: When would McInnes Transport have lost their contract? What year would that have been?
MR. BARKER: I would have said early in 2002 was the final awarding of the contract. I believe the actual exercise was in 2001.
MR. COLWELL: Was there any police investigation issued from that afterwards or was that how the police investigation started?
MR. BARKER: The police investigation was done concurrently with the external auditors so both projects, if I may, were both being done in the same period of time.
MR. COLWELL: Do you know if there has been any progress being made with that police investigation as of the time you left the corporation?
MR. BARKER: At the time I left it was underway and I can't speak to what has happened since.
MR. COLWELL: Was there an individual fired at that time, around that time, 2003?
MR. BARKER: No actions had been taken out of the audit or the police investigation at the time when I left.
MR. COLWELL: Was there any concern raised while you were there for individuals who might have been involved in anything that would have been not in the best interest of the Liquor Corporation?
MR. BARKER: Absolutely. A very large part of the audit, both internal and external, was to make sure that we cleared - if that's the word for it - everybody, to make sure that those people who were involved had, in fact, acted appropriately and if they hadn't then to take remedial action.
MR. COLWELL: What kind of action would you have taken if you would have been there?
MR. BARKER: If employees had done something illegal or dishonest, they simply would have been terminated.
MR. COLWELL: Would they have been terminated with a severance package?
MR. BARKER: They would have been terminated for cause.
MR. COLWELL: And no severance package?
MR. BARKER: If it's for cause, no.
MR. COLWELL: Back to the police investigation. Were there suspicions of senior managers at that time or any individuals who might have been suspect at that time when you started your audit or as you were going through your audit?
MR. BARKER: In order to keep the investigation very objective and perceived to be objective, the board, in this case Mr. Peter McCreath, was a direct linkage to the police. I never spoke to the police investigators directly. So the information they were given was exactly the same or similar in terms of volume of the information the external auditors had as well. They were going to look at it from a different perspective.
MR. COLWELL: Is it normal for the chairman of the board to be involved at this level in this kind of investigation?
MR. BARKER: Given the concerns that we had from the internal audit, I think it was appropriate, yes.
MR. COLWELL: He continued that process the whole time that you were there?
MR. BARKER: Yes, he was the major if not the only contact directly with the investigative group.
MR. COLWELL: At the time, when you were there, is there any truth in the thought that the police investigation group was disbanded after they first started on this and a new one put in place; have you heard anything about that?
MR. BARKER: Inside the corporation?
MR. COLWELL: No, the police themselves.
MR. BARKER: I don't know.
MR. CHAIRMAN: Mr. Colwell, you're starting now to get down to the details of the manner in which the police have investigated the matter and it seems to me that that is a place we don't need to go.
MR. COLWELL: Okay, thank you. In the process where you started to sort of straighten this situation out, or potential situation, how long after you started that process before the board was advised?
MR. BARKER: The perspective around the McInnes concern?
MR. COLWELL: Yes.
MR. BARKER: They were advised from the very beginning. At the very first complaint, the board was aware.
MR. COLWELL: Good. Back to your termination from your position, based on the question that I asked you a few minutes ago and the comments that were made by the communications people of the Nova Scotia Liquor Corporation, are you surprised by those?
MR. BARKER: I had not heard them before, no.
MR. COLWELL: Are there any facts in those?
MR. BARKER: Not in my opinion, no.
MR. CHAIRMAN: Mr. Colwell, if you're quoting from the document I wonder if it should be tabled for the committee or whether this . . .
MR. COLWELL: It's just verbal.
MR. CHAIRMAN: If you use something verbally that's fine, there's nothing to be tabled.
MR. COLWELL: When you went through that process, exactly how did they approach you about the termination?
MR. BARKER: The meeting was very brief, as I mentioned, and the Chairman, Mr. Peter McCreath, and Director, Mr. Bill Pyle, met with me at the Ministry of Tourism and Culture and simply related the fact that the board had had a number of discussions and had decided to exercise Clause 5, which, in fact, is the clause that terminates my contract.
MR. COLWELL: Is it unusual to meet outside the Liquor Corporation offices for a termination like that or is that . . .
MR. BARKER: It may have been done simply for my benefit. I suspect they did it out of a courtesy to myself.
MR. COLWELL: When you started the investigation, you say that they had the transport company from Pictou that lost its contract. What type of information did they bring forward when they came?
MR. BARKER: In terms of the concerns?
MR. COLWELL: Yes.
MR. BARKER: The primary concern was that the contracts had not been effectively and fully evaluated, the different options that had been proposed. So the competing bids had not been objectively looked at. But one of the things that we wanted to do in our internal audit was to make absolutely sure that, in fact, the process had been objective and, in fact, it was fair and it did make a lot of sense. That's what we went through with the process.
MR. COLWELL: After you went through that process, what was the conclusion; was it concluded that it was fair?
MR. BARKER: I was concerned that it had not been fairly done and that's why the external auditors had a look at it.
MR. COLWELL: What items brought you to that conclusion?
MR. BARKER: In my opinion, any individual who has a 40-year contract with an organization, there should be a very compelling reason to make a change. What I saw were bids that were very comparable and there was no compelling reason to make that change. I needed to understand very clearly, and I think the board would agree with this, that we all wanted to be assured that there was a reason for making such a significant change and that was not clear at all in the internal audit.
MR. COLWELL: There was a rumour that the transport company also had bid again at a lower price and still lost the contract, is that correct?
MR. BARKER: Well, the bidding process actually happened over a tendering window, so that was really the opportunity or the concern that the individual had.
MR. COLWELL: Then when you became aware of some concerns that you had with this, as anyone in your position would do, what actions did you take past the immediate actions; did you confront senior staff with this and ask them why, or how did you approach that?
MR. BARKER: What we did was, with the very most senior executives in the corporation, they were aware of the particular issues and what the investigation had shown
from our internal audit, based on that, we committed, as an executive, to provide whatever information was required both to the police or to the external auditors. In fact, that did happen over the next few months.
MR. COLWELL: Could you list the executives who would have been aware of that, name them?
MR. BARKER: Internally, there was an audit committee: the Vice-President of Finance, the Vice-President of Purchasing and Distribution, myself, and the Vice-President of Human Resources was involved as well. I believe that would have been it, and, of course, the internal auditor for the corporation.
MR. COLWELL: So, basically, five people.
MR. BARKER: And the members of the board.
MR. COLWELL: So the board would have been aware of that as well?
MR. BARKER: Absolutely, yes. The audit committee, obviously, took a lead on that.
MR. COLWELL: Did you have any unusual conversations with any of those individuals on the executive on your part with staff, vice-presidents, any of those people, when you went through that process?
MR. BARKER: No, the only concern I guess was it was a huge amount of work to dig back into old files and that kind of thing, so we heard a lot about overtime costs and that sort of thing from these executives. But that was more a collection of data as opposed to any concern about the process.
MR. CHAIRMAN: We will move on to the government caucus.
The honourable member for Waverley-Fall River-Beaver Bank.
MR. GARY HINES: Thank you, Mr. Barker, for being here, you're a very gracious individual, I can see that from the conversations we've had to date. I applaud you for coming forward and your willingness to be part of the process to better understand what's going on with government.
I'm going to go to the sick leave issue. As you know, there was an internal audit done in 2002 and recently released. The audit showed that excessive employee sick leave cost NSLC close to $5.7 million between 1997 and 2001. In your employ, were you aware of the sick leave issue, was it brought to your attention during that time that you were there?
MR. BARKER: It was very clear even before I joined the organization, in looking at corporate documents that were introducing the Nova Scotia liquor board and where it was going forward.
MR. HINES: How do you suggest that we resolve the issue of sick leave, is it something that we have to leave in the hands of the unions as a contractual matter?
MR. BARKER: I think a number of processes were put into place that are continuing today and, in fact, sick leave continues to decline, but it is a longer-term process. It won't happen overnight, it's built into the culture, it's built into a lot of the internal practices, it's built into some union agreements. There are a number of things that over time can be resolved and that the issue will become less costly, if you will, to the organization.
MR. HINES: That leads me to the question then, in the transition from a commission to a corporation, it seems to me that there are many more checks and balances to handle these internal issues in a corporation than in a commission. Can you do a comparison between what checks and balances may have been in the commission's standards and those that would be available under the new corporation?
MR. BARKER: It's difficult for me to speak to the past but certainly my understanding during my tenure at the liquor board was in previous administrations or previous years there had been very, very little dialogue between the corporation and virtually any of the external people, whether it be in the political arena or even with the customer base. So, in fact, what had happened was the organization created a number of its own practices, its own policies, its own culture. When we became a corporation, we opened up all those things and had a look at what were the best practices. So in many cases we worked closely with the government policies and implemented those; we implemented a large number of different initiatives to communicate and involve staff in what we were trying to do.
MR. HINES: In terms of the recognition of sick leave, what are the requirements for when individuals are off on sick leave? I can't imagine that long periods of sick leave would go unnoticed and unquestioned for whatever reason. Were there requirements for doctor's certificates and so on during these periods of sick leave?
MR. BARKER: I think it is fair to say that clearly in the past it was inconsistent at best, the way sick leave was administered. Going forward with our HR department and our focus, if you will, on employee health and recognition of the ties to customer service and to staff development inside the stores, a lot of that has now changed and those new practices are put in place. But you're absolutely correct. A person should talk to the supervisor and it needs to be documented, at some point the medical community should be involved, there should be processes to manage all that properly and those were inconsistent in the past.
MR. HINES: Earlier this year, Liberal MLA Keith Colwell, who is here with us today, expressed his concern over the NSLC's shipping contract with retired Liquor Corporation executive Jack Webb, of Jack Webb Management Services on behalf of the shipping company, J. F. Hildebrand. Mr. Webb had retired from the commission in 1995 and his contract was first awarded in 1997. What do you know about this contract? Are you aware of that contract?
MR. BARKER: Yes, and maybe a bit of background on this. J.F. Hildebrand is the largest freight forwarder of liquor products in the world and they're used almost exclusively by virtually all liquor corporations across the board. Because J.F. Hildebrand, which is European based - pardon me, I should step back for a minute. When I say freight forwarding, they are the individuals who gather the product from all the different wineries, say in Italy,
France or Germany, bring it all to a central dock, put it on a ship, bring it over to Nova Scotia and unload it on the wharf. They manage all of those logistics for the corporation, and they do it for all the liquor corporations.
[9:45 a.m.]
J.F. Hildebrand is a massive company and what they do is they appoint agents in various markets. The reason for that, obviously, they can't be managing their business from - in this case - Germany, so what they do is they appoint agents. They chose to appoint this individual at the time, Mr. Webb - whom I have never met - and I guess we are going back to the early 1990s. At that point in time, J.F. Hildebrand was the contract we had signed and worked with, if you like; their agent was the choice of J.F. Hildebrand, not the Liquor Corporation.
MR. HINES: The contract netted Mr. Webb and associates some $9.2 million between 2001 and 2003. Is this an unusual sum of money for that contract, in your opinion?
MR. BARKER: The business was growing exponentially and over time, the ratio of domestic to imported sales was rapidly increasing into the import business, and that's really through the growth of the wine industry, as you would expect. From that pace the past practice of a very small number of shipments coming into Nova Scotia was growing, as I say, exponentially, and in fact those numbers don't surprise me, given the kinds of volumes that are put through the Nova Scotia Liquor Corporation.
MR. HINES: Mr. Colwell became the Minister responsible for the Nova Scotia Liquor Commission in 1998. Our caucus thought it was very courageous of Mr. Colwell to suggest that this contract was somehow awarded inappropriately, considering he did nothing to stop it while serving as minister in 1998 and 1999. Whether or not he made a mistake during his time as minister, I don't know; however, he did note publicly that he might not have been aware of the contract, despite serving as the Minister responsible for the NSLC. This speaks to a lack of accountability in the old Nova Scotia Liquor Commission model and, of course, with what's happening in the federal realm today, accountability seems to be all over the place. Do you feel that the new corporation model, that was developed partly under your watch, brings about a greater level of accountability through to the level of the minister?
MR. BARKER: I think the answer is yes, but I think the credit goes in a number of directions. I think it's to the government from the standpoint of moving towards a corporation, as opposed to a commission, and that, by definition, opened up a whole bunch of lines of communication that didn't exist before. I also think having a board of directors and an executive that talk to each other on a regular basis, also opened up that communication. So the chance of a board member today not being aware of a major contract like that is impossible; whereas in the past, it may well have happened.
MR. HINES: Last January there were some concerns raised with the Human Resources Committee over the gender equity on various boards and agencies, including the NSLC board. During your experience, did you see any problems associated with a lack of gender equity or affirmative action within the workforce of the NSLC?
MR. BARKER: I think you're exactly right and one of the things that I think is very important is to have a gender balance, whether it be on a board, in an executive, or inside of a store management team. No question, that was one of the goals we wanted to work through on a longer-term basis, but we were not at the point where we were prepared to simply appoint people to make the gender balance. It was something we were aware of and working forward on, but you are quite correct that the Nova Scotia Liquor Corporation does need to balance better over the long term.
MR. HINES: Regarding the price of liquor, under the new system, sometimes we are criticized because of liquor prices going up and down and so on, and it has been suggested that there are tax grabs when that happens. That's not unusual in a corporation run like a business, to have some flexibility in the pricing and the price ranges and it allows considerable flexibility. Do you have a problem with that, do you see it as being a tax grab or is it also sometimes because the suppliers raise their prices. What things govern the price changes?
MR. BARKER: I was going to say there are a number of factors that can cause a price change or a price decrease to take place and you're absolutely right, the first one is the manufacturers themselves, which may, on a world market, have a shortage of a sugar product, or glass, or a corkage, or some other major product that they need to produce whatever it is they produce, so that can drive the price. The second thing is the freight to move products across the world varies significantly. Obviously, the price of oil, gas and diesel fuel have a direct implication in terms of what it costs for the freight forwarders. The third thing is you have your operating costs inside of stores and that sort of thing; if a distributor is running major promotional events, perhaps that has some impact.
There are a number of outside, external factors which can influence price. As well, there is the markup issue, but the markup issue generally is an effect, after the price change or decrease happens. In other words the market is driven by the price, as opposed to the other way around.
MR. HINES: I hear occasionally from people who are talking about the new liquor stores and so on, how much more enhanced and attractive they are, how the aesthetic values fit in with their surroundings with the increased size in parking lots and so on. One of the issues I always found to be contentious - back in the commission days - was the cost of transportation of goods from the warehouse to the stores, sometimes in small volumes causing more transportation to be required. Is there a move afoot for better management so that you eliminate a lot of those transportation costs from warehousing to the stores?
MR. BARKER: Absolutely, and that was a major, strategic thrust over the last year. Inventory management inside the corporation was very manually based, and relied a lot on people remembering things and processes being communicated back and forth by messaging. The new warehouse system being put in right now will manage the inventory all the way through the supply chain and, in fact, will result in lower inventories, it will result in more adjusted timed deliveries, it will result in a lot less labour involved with managing the process. So it will be a tremendous advantage to the organization, both cost-wise and service-wise.
MR. HINES: Can you give us a little bit of insight into the communications within the system. I'm told there was no communications system where you could actually send a message out on electronic mail and have everybody receive it in a timely manner. How bad was it when you came there?
MR. BARKER: At that point the stores communicated, primarily, by fax or by telephone, there is no e-mail link that I'm aware of at the stores; the messages are manually handled.
MR. HINES: Let's go back now to your relationship with the board. I was on a board and found that we dismissed a CEO at one point on that board who was very competent and very understanding of those things that were required for him to do, but his problem was his ability to communicate. I understand that sometimes very talented people are dismissed from board positions, and I guess that's quite evident by watching reality television and seeing Donald Trump selecting his new CEO. I think, in fairness to you, you brought a lot to the position and I think you have a lot to offer that position, but I also understand the position of the board. I do understand that for whatever reasons, their thought process didn't work with yours and I guess that's described as synergy. To summarize, I think perhaps that may be the only thing that was missing, that synergy, and I congratulate you on what I see of your abilities, your openness and so on. I hope it bodes you well as you move forward and I'm certain that it will. With that, Mr. Chairman, I will pass to Mr. Parent.
MR. CHAIRMAN: The honourable member for Kings North.
MR. MARK PARENT: Mr. Barker, I want to come back to something you said before, just to highlight it. The contract with Jack Webb Management Services, as a result of the changes that have been made since becoming a corporation, you're convinced that that couldn't happen again, that that potential misuse of money couldn't happen again.
MR. BARKER: A contract of that value would have to be signed off by the CEO.
MR. PARENT: So there is a greater level of accountability, a greater level of transparency in place now than was the case before?
MR. BARKER: And communication as well.
MR. PARENT: That's certainly good news for the taxpayers of Nova Scotia and I want to thank you for your part in helping that to become a reality. I'm wondering, you didn't have a long time as tenure so you probably weren't able to talk with your counterparts across Canada on an extensive basis, but you probably did a little bit of that, particularly, I'm sure, within the Atlantic Provinces. How would you compare the operation of NSLC with other similar operations in provinces across Canada?
MR. BARKER: You are absolutely right, we had a national body of all the heads of the liquor boards right across the country. We would meet a couple of times a year to compare processes, develop synergies, use suppliers, a variety of things like that. In Atlantic Canada, we worked much, much closer together and had communication probably on a monthly basis about how we could work together. Obviously, there are a lot of challenges to working together, but there is a number of similarities as well; we all sell liquor, we all sell similar products.
Nova Scotia and Halifax, in particular, is seen as a model by the rest of Atlantic Canada. We were the first board to get into very broad product selection growth. A lot of the merchandising initiatives, a lot of the store design initiatives, and a lot of our dealings with suppliers were first done in Nova Scotia, and the rest of Atlantic Canada simply reaped the benefits of those relationships.
Now compared to the LCBO in Ontario or B.C. Liquor Board, the scale is significantly different. In the past, the operations of Nova Scotia had been compared to these larger boards and said that the boards were efficient because we, in Nova Scotia, had similar cost structures to Ontario or to British Columbia. In fact, over the last year and a half, it has been recognized, and I think very positively, that we should be infinitely more effective than these big boards. So what we have done, and it continues today I'm sure as a process, is to become much more efficient than these larger boards and, in fact, become - the last I saw - the third most efficient board in Canada; so significant growth from being, I think we were number nine when I first arrived. So the team has done a wonderful job of moving costs out
of the system and increasing the revenue lines through new products and a broader perspective in the way of retailing.
MR. PARENT: Good news. In talking about the excessive sick leave, you talked about the culture and I found that very interesting because in spite of whatever policies we set out and checks and balances and all sorts of things, oftentimes it does come down to a culture, doesn't it, to a sense of pride in oneself and one's organization. Can you elaborate a little bit about what was wrong with the culture or what aspects of it you wanted to change?
MR. BARKER: A lot of it was not about the individuals, it was more about individual understanding and recognition. I don't think the link between being sick and customer service and somehow what that impact might be on your peers in the store was well established. One of the things that we did just by opening it up and discussing it a lot more and communicating a lot more and tracking it and bringing in a customer satisfaction index was to link all of these pieces together so the staff clearly understood the fact that them being in the store was a very important part of our success. If they weren't there, we would understand that because people do get ill but having said that, whenever possible we needed those people there.
MR. PARENT: So your move toward empowering or valuing the employees more in the sense of their value to the customer and to the organization as a whole increased.
MR. BARKER: In my view, again, it speaks to the top-down management style. Previously employees just felt they were a pair of hands. If you talk to a store employee today, I would like to believe, at least, that they would tell you that they understand where the corporation is going, the part that they play and what the impact is to things like customer service indices and various other measurements.
MR. PARENT: We talked a lot about financial responsibility and that's the mandate of this committee, of course. I have a great interest in social responsibility as well and certainly one of the reasons why it is a Crown Corporation and not simply a private business is to balance that social responsibility with the financial responsibility. Can you give us a little bit of insight into that aspect of the operation?
MR. BARKER: Absolutely. A very key tenet of the Nova Scotia board, and I think it is fair to say all the liquor boards across Canada, is the recognition of the responsibility to lead a social responsibility feeling, a mandate, throughout the particular province where they operate. Nova Scotia is no different. We expanded a number of programs. We involved it right from the store level with a Check 25 Program right to corporate initiatives and right through a lot of supplier-based programs. So a lot of the programs that you may see as an end consumer are not funded by the people of Nova Scotia, they are funded by suppliers who recognize now, or, in fact, we helped them recognize the very deep importance of the social responsibility issue. So, in fact, those programs continue to expand. It continues to be a
primary issue and you will notice in the last year or year and a half, the education is driving from the end consumer who may be 30 or 40 years old to the individual who is maybe 15 years old and we are trying to work the full life cycle from when people first become aware of beverage alcohol right through until they become adults because that is when behaviours can be changed or at least awareness can be created.
MR. PARENT: Were you able to see some success in that?
MR. BARKER: Absolutely.
MR. PARENT: One last thing because Mr. Chairman is going to cut me off quickly and I want to come back to my great interest in the Nova Scotia wine industry. You mentioned it is very competitive. It's a global market. Any quick suggestions, from your position as head of marketing, what more that industry could do?
MR. BARKER: A lot of the challenge that the industry is facing right now is do you move outside of Nova Scotia. Essentially to sell products for the Nova Scotia board is a process which most of them understand and actually do very well. Do you want to go to B.C. and compete directly with the wine industry in B.C. or with Ontario? These are challenges that we are working through. A number of the local wineries do sell their products in other Atlantic Provinces and that does make some sense because there are some synergies there back and forth. They may have a beer or a wine that we in turn import so we can do some of that reciprocity back and forth and that is helpful. But it is a slow process to develop these markets. The market in Nova Scotia will continue to develop because it's on a good footing right now but beyond Nova Scotia it is going to be a slow process.
MR. PARENT: Thank you very much.
MR. CHAIRMAN: Thank you, member for Kings North.
Mr. Barker has been answering questions for two hours. I did promise him a break and so with the committee's indulgence, this would be a good time to take a recess, a brief recess. By the clock on the wall there, we will resume not one second later than 10:05 a.m.
The committee is recessed until 10:05 a.m.
[10:01 The committee recessed.]
[10:05 a.m. The committee reconvened.]
MR. CHAIRMAN: We will call the committee back into session. Thank you very much for coming back promptly. We would now like to start a round which I think I will put at 12 minutes for each caucus, returning to the NDP caucus.
The honourable member for Halifax Chebucto.
MR. EPSTEIN: Mr. Barker, can you help me understand how purchases take place through the NSLC? I take it that the NSLC has staff whose job is to consider new items that might be stocked and who have some expertise in this. Is that correct?
MR. BARKER: That is correct, yes.
MR. EPSTEIN: What are they called? What are these people called?
MR. BARKER: In the merchandizing group there is a committee set up which is called the listing committee. The listing committee is trained essentially in the particular products that they are looking at and they meet on a regular basis to look at new pack sizes, for example, new products, new flavours, a variety of different things.
MR. EPSTEIN: With respect to something like wines, they would have expertise in this would they?
MR. BARKER: Absolutely, yes.
MR. EPSTEIN: And education and training.
MR. BARKER: As a matter of fact, some of the people who are on those panels come from the stores.
MR. EPSTEIN: And this is a staff responsibility?
MR. BARKER: Yes, it is.
MR. EPSTEIN: It is not a board responsibility?
MR. BARKER: No, it is not a board responsibility, no.
MR. EPSTEIN: The board doesn't have expertise in what ought to be listed or not listed, is that right?
MR. BARKER: I'm not aware of the board ever having a member sit on the panel, unless it was just for familiarization.
MR. EPSTEIN: Did you ever have occasion, during your time as president, to travel on behalf of the NSLC, particularly to travel abroad?
MR. BARKER: Yes, I did.
MR. EPSTEIN: And where did you go?
MR. BARKER: I went to the Vinexpo in France this past year, so it would have been in the Spring of this year and I also went to Belgium the year before for a beer school, if you will.
MR. EPSTEIN: Did any members of the board travel with you?
MR. BARKER: No, they did not.
MR. EPSTEIN: Are you aware of any instances of members of the board travelling with respect to NSLC business?
MR. BARKER: Yes, I was Mr. McCreath. We attended a governance conference in Ottawa and both Mr. McCreath and I attended liquor board functions in Toronto but that was, I believe, the extent of it.
MR. EPSTEIN: I would like to know about December 2002. I understand that Mr. McCreath had occasion to travel to Spain with respect to NSLC business. Can you tell us anything about that?
MR. BARKER: Yes. From time to time the various government bodies, trade commissions if you will, in these countries want to encourage their products in new markets. So what they will often do is they will invite very, very senior officials from various liquor boards both from Canada and the U.S.A. and on that basis they will become familiar with the products, they will be taught how the products are created, how they are marketed and basically try to get an awareness of a new product line. In the case of Spain, their products are often very new from the standpoint of not being marketed well in North America so they will do this from the standpoint of broadening the awareness of what they can even offer.
MR. EPSTEIN: Just to be clear, the trip to Spain in December 2002 was not at the expense of the NSLC but was at the expense of the Spanish Trade Commission. Is that correct?
MR. BARKER: That is exactly correct.
MR. EPSTEIN: But you didn't go.
MR. BARKER: No, I did not go.
MR. EPSTEIN: Did other staff go?
MR. BARKER: No. Just Mr. McCreath went.
MR. EPSTEIN: All right, who would have no responsibility for listing?
MR. BARKER: But he was requested by the trade commission.
MR. EPSTEIN: But he would have no responsibility for listing?
MR. BARKER: No.
MR. EPSTEIN: Or expertise.
MR. BARKER: That is correct.
MR. EPSTEIN: Okay, thank you.
Now I want to move to a question of communications inside the organization and I want to make some suggestions to you about what might be circumstances that might lead to a desirability for improved communications because, as I recall, you identified this yourself earlier as a problem and I think you said it was desirable that there be a director of communications, for example. Is that right?
MR. BARKER: Yes, that is correct.
MR. EPSTEIN: That is your view. Okay. So there were various factors. For example, the whole issue of privatization was a controversial one and there was some nervousness about this on the part of the union and the staff. Is that right?
MR. BARKER: I wasn't there at the time but I can imagine there would have been.
MR. EPSTEIN: Well, certainly it was highly controversial and debated in the Legislature and is an ongoing concern in public corporations. Wouldn't that be right?
MR. BARKER: Yes.
MR. EPSTEIN: One other thing that occurred, of course, is that there is a board in this new entity that is designed to administer liquor affairs in Nova Scotia that has someone who is clearly of the same political Party as the government and that is Mr. McCreath's background. Isn't that right?
MR. BARKER: That is my understanding, yes.
MR. EPSTEIN: There was a police investigation so this was known and this was also something that is not likely to provide comfort to all employees. This is bound to make people nervous, isn't that right?
MR. BARKER: Yes, although employees were not involved, initially.
MR. EPSTEIN: But it was known there was a police investigation.
MR. BARKER: Not immediately, longer term, yes.
MR. EPSTEIN: Yes, but it became known, that's right.
MR. BARKER: Yes.
MR. EPSTEIN: When you were terminated as president, having been recruited, nothing really was said about why or what this meant or what it's significance was to the organization. Surely that would be potentially a problem for communications inside the organization, wouldn't that be correct?
MR. BARKER: The board identified that they had made a decision to proceed with a different candidate. That was communicated to the organization.
MR. EPSTEIN: But in terms of why they decided to terminate you, nothing was communicated, isn't that right?
MR. BARKER: Not that I'm aware of.
MR. EPSTEIN: No, and that was followed up by various other terminations among the top executives, isn't that right? I mean, that occurred.
MR. BARKER: Yes.
MR. EPSTEIN: Again, no clear statement. So, what I'm suggesting to you with this list is that indeed there were all kinds of circumstances that would lead to the conclusion that the idea of communications both internally and externally was very important and that, indeed, given the size of the organization, given the number of dollars that passes through it, given in some circumstances the dodgy history, there has to be assurance that everything is on the up and up, wouldn't that really be sort of one of the central functions of communications inside the organization?
MR. BARKER: Absolutely.
MR. EPSTEIN: Then what message does it send to external stakeholders and to staff inside when the person who is hired to be in charge of communications is a former employee of the chair of the board? What message does that send in terms of communications that everything is on the up and up inside this organization?
MR. BARKER: I can't really comment on the individual because I don't have any firsthand knowledge. But my understanding is his experience and past skills are impeccable.
MR. EPSTEIN: It has nothing to do with that, you've said that before. The problem isn't whether the person might or might not be a plausible candidate for the job, the question is, this very real but old one, of appearance and how things present. There's an importance to how things look and what you're faced with is a situation in which the chair of the board hires someone who is their former staff person, do you really have no criticism to make of that?
MR. BARKER: The only comment that I was pleased to see in the press was the discussion on the process that they had gone through. The NSLC follows a very clear process when they hire candidates, they don't simply appoint people, they go through a process. It would give me comfort if I was perhaps in your shoes that the process was followed and a number of candidates were considered and that the "best" candidate was appointed.
MR. EPSTEIN: I'm going to go to the last topic and here's what we've seen today. You've come and you've answered questions for an extensive period of time and it's obvious that you're an articulate and pleasant person, it's obvious that you're intelligent, we know from the statements that the chair of the board made to this committee that you're very much of the same mind, the board saw you that way, you were making internal changes, you had hired the external auditors to come in to start doing these searches, there's no implication that you were terminated for cause, in fact, you've been the subject of fairly high praise by the chair of the board. In fact, were you given a letter of reference, I don't think we've heard that before?
MR. BARKER: I haven't asked for one, no.
MR. EPSTEIN: But certainly, you weren't discharged for cause, but given all of this, last chance, why do you think you were terminated?
MR. BARKER: I can only reflect back on the comments that the board has passed through, which is this issue of synergy. That is the only answer that I've ever received, although I have not, in all fairness, actually asked why I was terminated.
MR. EPSTEIN: We've heard synergy endlessly from Mr. McCreath. We've heard that word trotted out a number of times and then he tried to say you weren't in sync either but I wasn't really asking you what you asked them or what they told you, because clearly they didn't tell you anything. What I'm asking you is what you think now in retrospect, you had the chance to look back upon it, what on earth do you think was going on?
MR. BARKER: To me, I take it in a little bit different way, perhaps. I was hired by a board of directors to do a job which I believed I understood and attempted to do well. In fact, the board of directors then comes back and suggests that perhaps they would prefer to go in a different direction or with a different candidate who was more closely aligned to the direction that they're moving in. I worked for them, so it was always contemplated, I guess, that this could happen. Clearly, you're working for a group of people that once they decide that they're better served by a different individual, you will not be there. I understand that from all my years of business.
MR. EPSTEIN: Are you saying that they suggested to you at the time they terminated that they had another candidate in mind?
MR. BARKER: Well, they appointed one that afternoon, so I'm just assuming.
MR. EPSTEIN: Well, they appointed an interim or acting.
MR. BARKER: Exactly.
MR. EPSTEIN: Actually, with respect to him, when he was hired originally, do you happen to know whether he went through a job competition?
MR. BARKER: There was a competition for filling all the positions in the NSLC.
MR. EPSTEIN: No, do you know specifically whether when he was originally hired into the position that he held before he became acting president whether he went through a job competition?
MR. BARKER: I believe so.
MR. EPSTEIN: But you're not sure or you don't know for certain.
MR. BARKER: Yes.
[10:15 a.m.]
MR. EPSTEIN: It happened prior to your time there, is that right?
MR. BARKER: No, it happened after I was there.
MR. EPSTEIN: Oh, did it.
MR. BARKER: But the process, I can't recall the exact details but we did go through a process to fill that position, yes.
MR. EPSTEIN: Were you asked at any time during the time of your termination for any undertaking not to criticize the board at all?
MR. BARKER: No. That never came up in the discussions.
MR. EPSTEIN: And it wasn't in your contract either?
MR. BARKER: I would like to think that Mr. McCreath was well aware that I would not do that.
MR. EPSTEIN: Well, it's good to be honourable on all sides, but we're still left wondering what it is that actually was the parting of the ways or in the end, the cause. You're saying that you are completely baffled and you don't know?
MR. BARKER: I'm saying the board has never provided me with that information, so I don't know.
MR. EPSTEIN: And you have no opinion.
MR. BARKER: At this point, no, I don't.
MR. CHAIRMAN: We'll move on to the Liberal caucus.
The member for Richmond.
MR. MICHEL SAMSON: Mr. Barker, when you were terminated, you said it was about a five minute meeting at the Deputy Minister of Tourism's office, is that correct?
MR. BARKER: At Tourism and Culture is correct.
MR. MICHEL SAMSON: As part of your termination, was there any understanding or agreement signed by you that you would not discuss the terms of your dismissal?
MR. BARKER: It was not to discuss the terms of my severance payment.
MR. MICHEL SAMSON: You would not discuss the terms of your severance payment.
MR. BARKER: Which, of course, became public.
MR. MICHEL SAMSON: So that was the $92,000.
MR. BARKER: Yes, that's pretty close.
MR. MICHEL SAMSON: Were there any discussions about what information you would be able to share in regard to your time at the corporation?
MR. BARKER: Only from the standpoint of the normal confidentiality agreements, where you not discuss the business outside with competitors or with suppliers or that sort of thing.
MR. MICHEL SAMSON: As part of that confidential agreement that you did sign, based on the business practices, are any of your answers that you have provided today, which you have shielded or guarded as a result of that confidentiality agreement?
MR. BARKER: No, because we have not talked about those business practices with a competitor, so it has not come up, no.
MR. MICHEL SAMSON: So all of your answers today have been open and honest, to the best of your knowledge that you've been asked?
MR. BARKER: That is correct.
MR. MICHEL SAMSON: Where are you currently living, Mr. Barker?
MR. BARKER: In Hammonds Plains, that's where we've been since we moved to Halifax, Nova Scotia.
MR. MICHEL SAMSON: Have you applied for any position within the Nova Scotia Government since your departure at the Liquor Corporation?
MR. BARKER: No, I have not.
MR. MICHEL SAMSON: Have you applied for any other government positions in this province, either in the federal government or provincial government?
MR. BARKER: No, I have applied for Crown Corporations outside of Nova Scotia but not in Nova Scotia, no.
MR. MICHEL SAMSON: Your contract had a specific provision for buying out of your contract, I believe you referred to it as Clause 5.
MR. BARKER: It is Clause 5, yes.
MR. MICHEL SAMSON: What does your contract have to say if you were fired for cause?
MR. BARKER: That there would be no severance.
MR. MICHEL SAMSON: You've indicated to us that the board wanted to move in a different direction. On the flipside, you continue to refer to the success that has been achieved, you've moved from being number nine on efficiency lists for boards to number three, your answers seem to indicate that things just couldn't be going any better at the board than it's going right now. Is the Nova Scotia Liquor Corporation better off today because they got rid of Andy Barker?
MR. BARKER: The board believes that the success will be accelerated because I'm not there.
MR. MICHEL SAMSON: Do you support that position?
MR. BARKER: I'm not sure I understand exactly what the parameters are of that acceleration. The curve that we were on was very positive, they believe that the curve will even be better with a new executive member at the helm.
MR. MICHEL SAMSON: To your knowledge, bottom-line profits, have the profits at the Nova Scotia Liquor Corporation increased since your departure?
MR. BARKER: It will increase every year, simply because of the way the business is managed.
MR. MICHEL SAMSON: Will it increase at a rate that is different or higher than what it was with the pace it was on while you were in the employ of the corporation?
MR. BARKER: I would have difficulty taking a guess at that.
MR. MICHEL SAMSON: It cost Nova Scotians $92,000 to see Andy Barker leave the corporation. Our question is, did we get value for dollar, is the Nova Scotia Liquor Corporation going to be a better corporation without Andy Barker and it was in our best interest to pay you $92,000 to see you leave. Is it your opinion that Nova Scotians are in a better position without Andy Barker at the Nova Scotia Liquor Corporation?
MR. BARKER: I think I would answer that question from the standpoint that the Nova Scotia Liquor Corporation is very important to this province. The board of directors is put in place to basically govern that corporation, it could not have gone forward with the CEO and a board not in sync.
MR. SAMSON: Is it your conclusion that you were not in sync with the board of directors, and it was your belief that you just couldn't make any changes that would bring you in sync with the board?
MR. BARKER: I've simply been told that in what I've read in the transcripts from the last committee meeting.
MR. SAMSON: Is it your belief that you were incapable of bringing yourself to the level where the board wanted to see the relationship between you and the board?
MR. BARKER: No, although I'm not exactly sure what that is.
MR. SAMSON: Most people, if there are problems with their performance in this day and age are either sent for more training, provided with counselling, provided with a bit of direction as to what some of the problems are, and given an opportunity to address the issues that are being raised concerning their employment. Were you given that opportunity?
MR. BARKER: No.
MR. SAMSON: So we paid $92,000 to get rid of you without ever giving you even the opportunity to change or to address the issues which the board felt justified in getting rid of you?
MR. BARKER: That would be true from my perspective.
MR. SAMSON: If you had been fired, what action would you have taken?
MR. BARKER: To be fired would imply that it was for cause; I'm not sure what that scenario would look like.
MR. SAMSON: Did the board of directors have cause to fire you?
MR. BARKER: In my view, and in their view from what I'm being told, absolutely not.
MR. SAMSON: It cost $92,000 to see Andy Barker leave; whereas, had he been fired with cause it would have cost us nothing at all. Had you been fired with cause, the board would be required to tell Nova Scotians why you were fired and the reasons for that. I would also argue that you would also feel compelled to tell us why they fired you and how you would defend yourself in doing that. I would submit to you, by giving you what Nova Scotians, in many ways, feel is a golden handshake, the board has been able to avoid having to tell us why you were let go. Obviously by your answers today, you're not going to tell us why you were let go, also. Is there any other information that you are aware of, regarding your termination, that you have not shared with us up to this point this morning?
MR. BARKER: I've tried to be as upfront this morning, starting from where the business went, from the standpoint of where I was hired, where the business went, and the subsequent or end meeting where I actually had my contract terminated. There is no other information that I am withholding, no.
MR. SAMSON: Have you ever been terminated before?
MR. BARKER: No.
MR. SAMSON: Are you aware of any CEOs or presidents who have been terminated, who have never gone back and asked their employer why they have been terminated?
MR. BARKER: I don't know very many, but the answer, of the ones that I know, is they probably would never be aware, no.
MR. SAMSON: Do you understand how it's odd for us to look at the fact that you were being paid $135,000 a year, a $600 a month car allowance, you moved your family to Nova Scotia, the board of directors decided to can you, without even telling you why, and yet you've never asked? Do you understand how that's bizarre for us as committee members and how Nova Scotians would find that bizarre, as to why you never asked why they were letting you go? You had a fairly comfortable paying position, the corporation was obviously moving in a direction you wanted to see it go, it's obviously achieved a great deal of success, yet when you go to your next employer asking for employment and he asks why you were let go, will your answer be, I never asked?
MR. BARKER: That question comes up a lot from my family as well. I don't have an answer. What I do, as I mentioned, when I go to job interviews, is simply talk about the board making a decision to go in a different direction. That, in fact, is what I understand . . .
MR. SAMSON: And you've been given no other information, other than that?
MR. BARKER: That is my understanding, the board chose to go in a different direction.
MR. SAMSON: During your time at the Liquor Corporation, there were a number of increases in the price of the cost of alcohol. Who made those decisions?
MR. BARKER: A number of them were made before I arrived, as part of the planning process that would have taken place at the end of 2001, early 2002. A price increase at that point was approved and worked through the system. I can't speak to the process per se, because I wasn't here.
MR. SAMSON: During your tenure, were there any price increases?
MR. BARKER: Minor adjustments were made by suppliers because of the cost of products, yes.
MR. SAMSON: As to the cost to Nova Scotians, were there any increases?
MR. BARKER: To the end consumers?
MR. SAMSON: Yes.
MR. BARKER: Absolutely, yes.
MR. SAMSON: Who made those decisions?
MR. BARKER: Those were made by the Liquor Corporation and the supplier group.
MR. SAMSON: Were there any instructions given by the minister's office or by any members of government, regarding the cost of alcohol and the price to the consumers?
MR. BARKER: Absolutely not, no.
MR. SAMSON: There was no indication that we need more revenue, put the prices up.
MR. BARKER: No. The government was very pleased by the fact that we were able to increase sales and remove costs out of the system, but there was never a discussion about how we needed to adjust pricing or adjust the markup or something like that, no.
MR. SAMSON: Prior to your coming here today, you indicated that Peter McCreath was present at the meeting with the deputy when you were dismissed. Have you spoken to Mr. McCreath since then?
MR. BARKER: Yes, I spoke to him very briefly after the hurricane, more on a social level. Mr. McCreath was kind enough to call me at the house last night, just to wish me good luck with this morning's meeting.
MR. SAMSON: Can you tell us the details of that conversation?
MR. BARKER: Very simple, he called and said I wish you all the best tomorrow, and I said thanks very much. I said, is everything going well, and he said, yes, and I said, well, it looks like you're going to have a good year, and he said, it will be challenging but
hopefully it will work out. I thanked him and that was the end of the conversation. It was very brief.
MR. SAMSON: So, good luck, we canned you but we gave you $92,000 because we didn't fire you, which would require us to give you cause, and we're not telling you why we let you go - although you haven't asked us either - and good luck when you go over there tomorrow. Prior to your arrival here, other than the phone call from Mr. McCreath, have you had any discussions with any government officials or any officials with the Nova Scotia Liquor Corporation?
MR. BARKER: I have seen four or five Nova Scotia Liquor Corporation staff who were kind enough to call or contact me, offer support, that sort of thing. I've also received letters from a number of employees saying, sorry you left and again wishing you all the best, and I've had some discussions with suppliers in other markets, asking them to refer my resumé to contacts they may have. I have had no meetings with anybody from government since I departed, no.
MR. SAMSON: Let me terminate with this, it cost Nova Scotia taxpayers $125,000 for a recruiting firm to find you as the best candidate for Nova Scotia Liquor Corporation's President and CEO, you were paid $135,000 a year, plus a $600 a month car allowance, and then you were given a $92,000 severance, which many Nova Scotians would see as a golden handshake. It cost Nova Scotia taxpayers $425,000 to have Andy Barker come to our province and work for the Nova Scotia Liquor Corporation. Our question here today is, did we get value for dollar? I ask you, based on where the corporation is and where it is going, did Nova Scotians get value for dollar in the board's decision to pay you $92,000 to get rid of you?
MR. BARKER: I would have to say that the organization moved very significantly during the period of time that I was there. I would not try to somehow quantify that in terms of dollars, though, no.
MR. SAMSON: Nova Scotia taxpayers are asking, are they better off today without Andy Barker than they were had Andy Barker been kept on the payroll and not given the $92,000 severance. I ask you again, based on the glowing reports you've given us as to the health of the corporation and where it is going, did Nova Scotia taxpayers get value for dollar by paying you $92,000 to leave the corporation?
MR. BARKER: And I think I will reiterate my earlier point that the corporation could not have moved forward if the board and the CEO were in disagreement. If the board sensed that I as an individual was not going in the direction they wished to go, the organization would have just foundered on the rocks, it would have gone nowhere.
MR. SAMSON: To your knowledge . . .
MR. CHAIRMAN: Your time has expired, Mr. Samson. We will move on to the government caucus.
The honourable member for Chester-St. Margaret's.
MR. CHATAWAY: Mr. Chairman, I certainly appreciate the opportunity. Certainly I disagree with some members on this committee, because they want to basically talk about all the challenges we have in Nova Scotia, they want to talk about something for three hours, not two hours, to argue about the past. Basically I think you've been very straightforward, that the synergy and all that was a bit different, and I think you made some very good points. I think some of the questions have certainly been insulting to you, basically.
All Nova Scotians would like to know one thing - changing the subject - I know the corporation increased product selection by more than 30 per cent, and I did know that when the corporation was in here, in just one year, they had 500 new products in their selection.
Basically, how did the corporation select new products? How did it change? It used to be if you made some alcohol, you somehow, hopefully, get on there. How did the corporation change the selection process?
[10:30 a.m.]
MR. BARKER: Without going into a huge amount of detail into merchandizing strategies, essentially, in the past, products were bought on a one-off basis so this particular product was selected and that particular product was selected, but there was no tying together of categories, or of a particular product range, or a country, or a particular flavour of spirit.
One of the things that the merchandizing group did an excellent job and continues to do is this issue of category management, where you're buying families of product, you're buying products that you need as opposed to having 400 white wines from Germany, you might have three and you have a whole bunch of space then left over for other brands. So it's a much more quantifiable, a much more logical and objective approach to product listing.
MR. CHATAWAY: Correct me if I'm wrong, the provincial Crown Corporation, the Nova Scotia Liquor Corporation, operates 100 retail stores with over 1,000 employees and sales in excess of $400 million. The NSLC consists of six major divisions: purchasing; store operations; human resources; merchandizing services; finance and systems; and property management. From what I understand, in the year 2003-04 the earnings are expected to be $166.7 million and that's up 6 per cent from the year before. The target for next year is always growing. The target for next year, 2004-05, is $175 million. I understand that you've had something to do with it, that's for sure, and that the corporation is number one for Crown Corporation earnings, out of all the Crown Corporations in Nova Scotia. Basically, they have renewed the decades-old store network - oh, just put it over there at Harvey's old store - and it certainly has improved customer service and you had a lot to do with that. There is an
increase in public understanding of the organization and its mandate. Basically, they've lowered the cost as much as they can, they're going in the right direction, they're making more profit and all Nova Scotians are very glad. Their theme is to give better service, selection and convenience to our customers and a better return to our shareholders, and I think that's the direction it has been going. Do you disagree with any of that?
MR. BARKER: No, I think it's a very strong credit to the team. A tremendous amount of progress has been made.
MR. CHATAWAY: I thank you not only for coming here today, but also for what you have given to this process, and I would like to give this to my colleague.
MR. CHAIRMAN: The honourable member for Waverley-Fall River-Beaver Bank.
MR. HINES: Mr. Chairman, I would like to follow up on an earlier request that you made regarding tabling information on Mr. Colwell's remarks. I think he alluded sometimes to "they said" and "we heard" and then "communications staff". I wonder if we could have more information regarding that?
MR. CHAIRMAN: For the record, I did inquire whether there was a written document to which the member was referring. He indicated there was not, there is therefore nothing to table and there's nothing further to be done on that particular matter.
MR. HINES: Thank you, Mr. Chairman, and if I might, I'm going to say thank you to Mr. Barker and I'm going to terminate our questioning.
MR. CHAIRMAN: Thank you. It's not very common for us to terminate before the time allotted, but as I said at the very outset today, I see no point in people asking questions for the sake of asking questions. The Conservatives have concluded that they don't wish to use up the rest of the time. I'm inclined to leave it there, because I'm sure if it's a matter of the rest of their time being given to the other caucuses, it will simply continue.
Mr. Samson, you have a point of order, I believe.
MR. SAMSON: Mr. Chairman, I think you will have noticed that when we finished our questioning you actually had to stop me in the middle of a question to say that our time had run out. I take great offence at the suggestion from you, as chairman, that members of this committee, especially members of either our caucus or, I would think, your own caucus, would sit here to ask questions just for the sake of asking questions. I think the questions that you've heard this morning have been very pointed and very relevant to this issue, other than what we heard from the government caucus, and there are more questions to be asked.
On that basis, if it's determined that there are no more questions and there's time remaining, certainly our caucus has more questions that have yet to be asked of Mr. Barker, and we would certainly be willing to take up that time and have some more questions asked for the sake of not having to ask Mr. Barker to return to this committee because questions were not answered that still needed to be asked.
MR. CHAIRMAN: It's a reasonable point, but I think, in all fairness, given the fact that if the Progressive Conservative caucus doesn't use its time, the other caucuses will, I will give you an opportunity to decide whether you wish to use the rest of the time or not. (Interruption) There's about five minutes left, which I will divide between the other two caucuses, if you choose not to use it.
The honourable member for Kings North.
MR. PARENT: The question I wanted to ask was on the whole question of privatization, because before you came it was a very emotional issue and one that generated a lot of public debate and discussion in my riding and in other ridings as well. In the end, it was decided not to go forward with full-scale privatization, they went forward with the agency stores. How would you characterize that compromise in terms of service delivery to Nova Scotia consumers and in terms of fairness to the present staff? Was it a good decision in the end? What are your thoughts on that?
MR. BARKER: I think rather than my views, an independent study of the agency stores done by Unisys highlighted a lot of benefits to the strategy. As I mentioned earlier, in my mind it's always a question of balance. In large rural areas, where there's very low population, where there's a very seasonal component, an agency store can do a great job of providing the basics, and I mean the basics. They tend to have a very limited product selection, the knowledge of the staff is probably much lower than it would be at one of our corporate stores, if you will, but it does provide a point of access if you're looking for a common product.
If you're looking for a particular wine, if you're a collector, if you're looking for new products, you need to go to a corporate store where the depth of information is there, you have the right kind of people who can serve you, you have the right amount of space that you can inventory products, and you have the right kind of product turns to make sure product is fresh and it's new and it has all the latest and greatest. In my perspective, the balance between the agency stores and corporate stores is ideal, the only question is how many of each. That's something I think will be worked on over time.
MR. PARENT: So what you're saying is that as the palates of Nova Scotians become more sophisticated, the expertise of the present employees within the stores will become even more important.
MR. BARKER: Yes, and the organization is devoting a significant amount of money to staff training on that front.
MR. PARENT: In terms of the agency stores in the large rural areas, is there some concern - we talked about social responsibility before and our present staff in our stores are well trained and vigilant on that issue. How did you manage that issue in the agency stores?
MR. BARKER: That's an area of extreme concern for the Nova Scotia Liquor Corporation, the agency stores were able to uphold the social responsibility aspects of beverage alcohol, and we were probably the most pleased of anything when we saw the agency study come back from Unisys, where they had spoken to the communities, they had spoken to the police departments, and they had been reassured that in fact that social responsibility was being maintained and upheld throughout those communities. So that was very good news to us, as well, and it's a point we have to watch all the time, you're absolutely correct.
MR. PARENT: But in your tenure as the CEO, privatization was not an issue that was discussed. It had been resolved, basically, in terms of the agency stores and the town/urban stores, and it was just a question of balance of numbers between each. Is that fair?
MR. BARKER: Yes, that's correct.
MR. PARENT: I'm terminating my questioning. The member to my right has one further question to ask, if we have time, Mr. Chairman.
MR. CHAIRMAN: The member for Chester-St. Margaret's, you have just a little over one minute.
MR. CHATAWAY: Mr. Barker, were you ever discussing, when you were president, Sunday shopping? There will be a plebiscite this year. What thoughts did you hear expressed about the liquor stores opening on a Sunday?
MR. BARKER: It certainly came up for discussion on a number of occasions. My understanding is that certain liquor stores were open over the Christmas period, as provided in legislation, and in fact that was a good way to test what the organization's capacity was to be open seven days a week but also how the consumer base would react.
MR. CHATAWAY: Yes, because basically the people of Nova Scotia will decide. That's why I think it's very important that the people themselves will have a chance to express their opinion. Certainly, I think that is a good step forward. That's why it's very important that any Crown Corporation try to ascertain what the people in Nova Scotia feel.
I think the Nova Scotia Liquor Corporation has very much improved in that regard. Thank you very much.
MR. CHAIRMAN: That brings to a conclusion the question and answer portion of today's proceedings. Mr. Barker, as is customary, you may now take up to five minutes to make any concluding statement you wish to make.
MR. BARKER: I will make this very brief. First of all, I would like to thank the members of the committee. I appreciate your time today. I appreciate there is a very significant amount of time involved, so thank you for that. Secondly, I'm not sure if it's to tell you or to reassure you that your liquor board, which is so important to the province, is in good hands and it is moving in the right direction. I think a lot of the things from the past that have been dredged up and that have come through are just by-products of a process now that is using the proper audits, the proper checks and balances to move the organization forward and as it continues to grow, there will be more benefits in terms of customer service, financial supplier relationships, and so on and so forth.
I would also like to reassure you that you have a very dedicated group of employees out there. Many of these people have been around for a very long time. They are very committed to the business and I think now with the doors being open in terms of more staff development, more information, more involvement, they are just going to do great things.
You have a great executive. There are some people there who have tremendous skills. In going forward, they are going to give you lots of good advantages. You have a very involved and very committed board and that board is very keen on developing themselves internally so that they can be more effective to develop the corporation that they look after. But it's a great group of people. It's going forward in the right direction and I certainly wish you all the best with it going forward.
MR. CHAIRMAN: Thank you very much, Mr. Barker. The committee does have some business to discuss, unrelated business to what we have discussed this morning. We don't need to detain you for that. In order to thank you and excuse you, we will now take a brief recess in the order of approximately three minutes. I would like to ask the members, if they can, to stay in the Chamber so that we can return promptly to the item of business. We are now recessed for about three minutes.
[10:43 a.m. The committee recessed.]
[10:44 a.m. The committee reconvened.]
MR. CHAIRMAN: We will resume this meeting of the Public Accounts Committee. There is one item of business. There are two documents which were distributed to the members in advance of the meeting, and I will give a very brief explanation. Yesterday I was
contacted by telephone by the chairman of the Bluenose II Preservation Trust, who indicated the Trust's desire to appear before this committee. At the conclusion of our conversation, he then faxed the letter which you see before you here, in which he simply puts in writing what he said to me, verbally. I won't read the whole letter. It simply begins, "Dear Mr. Steele, our trust hereby requests an opportunity to appear before your committee . . ." and so on and so on.
My reply then is the second document. I did make clear to Senator Moore, verbally and in writing, that it was certainly not my prerogative to decide who appears before the committee, it's the committee's prerogative. I felt that it was a matter that the committee would want to be informed of immediately, and it seems to me that there are three ways the committee can proceed. We can, as a full committee, agree to this request today, we can reject this request today, or we can defer it for the consideration of the Subcommittee on Agenda and Procedures. In order to frame the discussion, what I would like to do is invite a motion dealing with one of those options. Mr. Epstein.
MR. EPSTEIN: Mr. Chairman, in order to facilitate the discussion, I move that this committee accept the request of the Bluenose II Preservation Trust to appear before the committee and direct the clerk to contact the trust in order to arrange a mutually convenient date.
MR. CHAIRMAN: Discussion?
The honourable member for Kings North.
MR. MARK PARENT: I'm in agreement with this. I think that the opportunity and the opening is there, and it's certainly an important issue for the citizens of Nova Scotia and the taxpayers of Nova Scotia.
MR. CHAIRMAN: The honourable member for Chester-St. Margaret's.
MR. CHATAWAY: One more question, would the subcommittee - if we affirm this motion - meet as to the exact date?
MR. CHAIRMAN: No, the motion, as I understand it from Mr. Epstein, is that the date would be a matter of discussion between the trust and the clerk of committees, as a purely administrative matter, finding a mutually convenient date. Senator Moore did indicate to me yesterday the dates that he and other members of the board were and were not available. He indicated to me that if this committee agreed to the request, the best dates for him and the other members of his board were April 14th and April 28th, but I didn't pursue that further with the clerk of our committee until we decide what direction we want to go on this.
MR. CHATAWAY: I think we will say yes, at least I will. The other thing is we also realize that this committee has some other obligations to other people. Basically we don't want to put him in front of the list because we have some other obligations. Is that correct?
MR. CHAIRMAN: That's correct, in my understanding. By no means would we say that this is our immediate priority and we will meet with him at our next meeting. My understanding is that if the committee is agreeable, we would arrange a mutually convenient date, not in any way to bump any of our meetings that are already scheduled but finding time that we have available and that they're available.
Mr. Hines.
MR. HINES: Mr. Chairman, as you indicated, March 31st is available. I would suggest that we put a little more emphasis on the request, that perhaps we try to get March 31st because we are getting close to the time when all caucuses are going to be very busy.
MR. CHAIRMAN: I should have added, and I apologize for not adding, that after my having sent this fax to Senator Moore, he called a second time to say that that date was not possible for himself and his board members.
Mr. Wilson.
MR. DAVID WILSON (Glace Bay): Mr. Chairman, first of all I think absolutely that I'm in agreement with the motion in principle that this is important enough for us to move ahead and have Senator Moore appear before this committee. I'm concerned we have a process in place that we are not using right now, that we will circumvent by doing this, and that process is the subcommittee that reports back to this committee.
I'm also concerned about the fact that this has already been the subject of a news release, a news item before it was dealt with by this committee; that would be a news release that was issued by yourself. I read a Canadian Press item yesterday that said the NDP Finance Critic and Public Accounts Committee Chairman, Graham Steele, said it was a good idea for Senator Willie Moore to appear before this committee as soon as possible.
I'm just wondering if you could perhaps explain to the committee, is that a policy now, that you're going to making releases on behalf of this committee before we even hear about potential witnesses?
MR. CHAIRMAN: Is there anything else you wanted to add?
MR. DAVID WILSON (Glace Bay): Not yet.
MR. CHAIRMAN: Well, to answer your question, Mr. Wilson, the way that it unfolded is that in my capacity as a member of this committee, as NDP Finance Critic, I did issue a news release which identified me solely as the NDP Finance Critic, indicating that in my view it would be a good idea for the Bluenose II Preservation Trust to appear before the committee. That news release went out on Monday and was reported on Tuesday.
Yesterday I received an unsolicited phone call from Senator Moore indicating his request, the trust's request to appear before the committee. It is my understanding, from the Canadian press report, that thereupon his spokesperson in Ottawa contacted the press to indicate that Senator Moore had called me. I responded yesterday to calls from the media. There was no news release issued ever Monday, Tuesday or any other time in which I purported to be speaking on behalf of the committee because that would be inappropriate and I wouldn't do that.
Mr. Parent.
MR. PARENT: Mr. Chairman, I am just calling for the question.
MR. CHAIRMAN: I don't think we are quite ready for the question because I do want to satisfy Mr. Wilson's concern.
Mr. Wilson.
MR. DAVID WILSON (Glace Bay): My concern is that, as identified in the Canadian Press, you were identified as both the Finance Critic for the NDP and as the Chairman of the Public Accounts Committee. I think you know full well, Mr. Chairman, yourself, that when you speak, you can be identified as either/or. You can't wear either hat at your own convenience. You are the Chairman of the Public Accounts Committee and when you speak, you can be recognized as the Chairman of the Public Accounts Committee. So if you are suggesting to the media that we have witnesses at this committee, then you are suggesting that you may want to put on your Finance Critic hat but you are suggesting it also as the Chairman of the Public Accounts Committee and we have a process in place here to deal and I would think that it would come before this committee first before it would go to the media, that we have a process in place to select witnesses and when they will appear before this committee.
MR. CHAIRMAN: Mr. Wilson, as you know full well, over the years, members of all caucuses have suggested - including members of your caucus fairly recently - that certain witnesses be invited to appear before this committee.
MR. DAVID WILSON (Glace Bay): They are not chairman of this committee.
MR. CHAIRMAN: Like any other member of the committee, I am entitled to express an opinion about . . .
MR. DAVID WILSON (Glace Bay): You are not like any other member, with all due respect, Mr. Chairman, you are not like any other member. You are the chairman of this committee.
MR. CHAIRMAN: . . . about who ought to be invited before the committee. That is what I did. I made very clear to Senator Moore and any journalist I spoke to yesterday that it is not my sole prerogative as chairman because I was asked that question, is it up to me. I made it very clear, it is very clear in today's news reports that I said it was the committee's decision but I have a view on which witnesses would be appropriate and, Mr. Wilson, I'm as free to express that view as you are.
MR. PARENT: Question.
MR. CHAIRMAN: Would all those in favour of Mr. Epstein's motion . . .
MR. DAVID WILSON (Glace Bay): I have a question, Mr. Chairman.
MR. CHAIRMAN: Yes, Mr. Wilson.
MR. DAVID WILSON (Glace Bay): I didn't get a chance to reply and if I may . . .
MR. PARENT: Reply to what?
MR. DAVID WILSON (Glace Bay): To the chairman's comments.
MR. CHAIRMAN: Yes, you may, certainly, Mr. Wilson.
MR. DAVID WILSON (Glace Bay): Mr. Chairman, I did not, in all fairness.
MR. CHAIRMAN: I'm sorry. You didn't get a chance to reply to . . .
MR. DAVID WILSON (Glace Bay): To what you just said.
MR. CHAIRMAN: I understand. That is why I was recognizing you, to give you that opportunity.
MR. DAVID WILSON (Glace Bay): What I am saying here is that I'm trying to be, and I know you are, too, as fair as possible but if you are going to play politics with the issue of witnesses here, that is not what the Public Accounts Committee is about. Whether you, and I understand your right as an individual MLA in this House, but you are also the
Chairman of the Public Accounts Committee and as Chairman of the Public Accounts Committee, you also have a responsibility to make sure that this committee deals with those issues first, I would think. That is my opinion and I make it respectfully to you, as chairman, knowing that you are doing a fine job as chairman. I would think right now that we would deal with this as part of the process. I hope that process would remain in place for any witness, potential witness, that comes before this committee.
MR. CHAIRMAN: It's a fair point, Mr. Wilson, and certainly something that if there is a special onus or obligation on the chairman to do or not do a certain thing, which you have raised, that is certainly worthy of discussion at our subcommittee, I think, so that we can all be in agreement about what our respective obligations are.
Mr. Parent.
MR. PARENT: That was going to be my suggestion, Mr. Chairman, that this discussion should take place at the subcommittee meeting. We should move to the question as has been called for.
MR. CHAIRMAN: Mr. Epstein, because there has been some discussion since you read your motion, I wonder if you could oblige us by reading the motion again, please.
MR. EPSTEIN: Happy to. The motion is that this committee accept the request of the Bluenose II Preservation Trust to appear before this committee and direct the clerk to contact the trust to arrange a mutually convenient date.
MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
Is there any further business requiring the attention of the full committee today? If not, a motion to adjourn.
MR. PARENT: I so move.
MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.
The motion is carried.
Thank you very much. This committee is adjourned.
For the benefit of the members, I should have added there is no meeting next week. Our next meeting is on March 24th with Treasury and Policy Board.
[The committee adjourned at 10:55 a.m.]
