HANSARD

Released By Resolution of the Committee

Printed and Published by Nova Scotia Hansard Reporting Services

Ms. Maureen MacDonald (Chair)

Mr. James DeWolfe (Vice-Chairman)

Mr. Mark Parent

Mr. Gary Hines

Mr. Graham Steele

Mr. David Wilson (Sackville-Cobequid)

Mr. Keith Colwell

Mr. Wayne Gaudet

Mr. Michel Samson

[Mr. Gary Hines was replaced by Mr. Peter Christie.]

In Attendance:

Ms. Mora Stevens

Legislative Committee Clerk

Mr. Jacques Lapointe

Auditor General

Mr. Roy Salmon

Former Auditor General

Mr. Gordon Hebb, Q.C.

Chief Legislative Counsel

Ms. Lisa Manninger

PC Caucus

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HALIFAX, WEDNESDAY, MARCH 8, 2006

STANDING COMMITTEE ON PUBLIC ACCOUNTS

11:19 A.M.

CHAIR

Ms. Maureen MacDonald

VICE-CHAIRMAN

Mr. James DeWolfe

MADAM CHAIR: I'd like to call the committee to order. I'm wondering if we need to have those questions placed again, maybe one at a time. I believe that the motion contained three questions. Perhaps Mr. Fage would like to hear them one at a time.

MR. FAGE: It's easier to answer one at a time. Sometimes the answers do fit.

MADAM CHAIR: Absolutely. Mr. Steele, would you like to run through those in the order in which they appear in the motion.

MR. STEELE: Yes, I will. I just want to say, by way of preliminary, that, Mr. Fage, the advice we've received from our legal counsel is that this is the proper way for the committee to proceed, and that Cabinet confidentiality is not a legitimate reason to not answer these questions. The first question is, can you confirm that it was the February 7^th Cabinet meeting at which the S&J proposal was discussed and approved?

MR. FAGE: Madam Chair, as I previously stated in the open session, my oath of Cabinet confidentiality does not allow me to answer that. There is more than one legal opinion on that, and precedents of 250 years bear that up.

MADAM CHAIR: Mr. Fage, I'm going to interject myself here at this point as the Chair of the committee and say with all respect that Cabinet confidentiality, in the view of this committee, does not extend to such a broad interpretation. This committee does not accept some of the assertions that have been put forward, for example, by the Deputy Minister of Justice. We have operating parameters that have been well established. I believe members of this committee do understand and accept the importance of Cabinet confidentiality, but we do not in any way see the kinds of information that's being withheld as being applicable in this case. So I would ask you to reconsider the question that has just been asked in light of the position of the committee, with all respect.

MR. FAGE: Madam Chair, again, with the greatest deference and respect, myself, those are questions for lawyers. I stand by my oath.

MADAM CHAIR: Mr. Steele, would you like to place the next question?

MR. STEELE: I want to formally note for Hansard that the question has been put to the witness, and the witness has refused to answer it.

The second question, is it correct that Michael Baker presented the S&J Potato Farms to Cabinet on February 7^th, and if so, why?

MR. FAGE: Madam Chair, for the official record of Hansard, I would also like to note that I did answer the question. The question was answered properly. It is against my ministerial oath and Cabinet privilege to disclose that. That is an answer. Lawyers and legal people, for anyone concerned, can continue to argue those questions and answers, I'm not in a position to do that.

Secondly, to the question that was just put again, my ministerial oath and Cabinet confidentiality - I cannot answer that. I cannot reply to it.

MADAM CHAIR: Hansard will formally note that the question has been asked and the member has refused to answer.

MR. DEWOLFE: Madam Chair, on a point of order. It's also going to be noted the reason why the minister didn't answer the question, I would hope. It's not that he just refused, the reason he refused is time honoured.

MADAM CHAIR: Mr. DeWolfe, we have a legal opinion from Legislative Counsel with respect to the parameters around which this committee can seek information, has the right to seek information, and to be given information. This treatment of these questions far exceed the legal advice that we've gotten from Legislative Counsel. It has been and it is the view of the committee that these questions are proper, there is no breach of Cabinet confidentiality. You can say 250 years of tradition as often as you want, but it is not applicable with respect to these particular questions.

We have Hansard happening here. There is a record, and this will be formally noted, that the questions are being put, and all of our discussion is being formally recorded, including the member's rationale for why he is not answering the question.

MR. PARENT: Madam Chair, on a point of order. I think it should also be formally stated in our document that we have two conflicting legal opinions. If both legal opinions were in agreement with each other, then I think that would be a different matter. But with two conflicting legal opinions, to force a member who is not a lawyer to say one opinion is more valuable than the other is to put that member in a position which I submit none of us would want to be in. I respect the opinion of both the lawyers, but they are in disagreement with each other. Until that's clarified, I think that the member is doing the ethical thing by refusing to break his oath as a minister.

MADAM CHAIR: Thank you for that. Actually, there may not be two different, conflicting opinions. It appears that there's a fair amount of agreement between Mr. Keefe and Mr. Hebb in some respects, but for whatever reason Mr. Keefe asserts that the subpoena has been fully responded to by the release of documents is only known to him at this stage. At any rate, we have had questions asked, and a failure to answer. We have one more question, and I would ask Mr. Steele to pose the third question.

MR. STEELE: The third question which the committee has judged to be a proper question is this, your version of what happened at that meeting was first presented in The Halifax Daily News on February 14^th. The article reads as follows, "Fage said he is not in a conflict of interest. He dropped his department's case for an interest-free, 'forgivable' loan to S&J Potato Farms Inc. on the Tory cabinet table. Then he left the room while his colleagues decided if the company deserved public money." Is this version of events true?

MADAM CHAIR: Mr. Fage.

MR. FAGE: Madam Chair, as I previously stated, upon reflection, I decided that I had not done full disclosure to my Cabinet colleagues. Seeing that as not living up to my ministerial oath, I resigned this position. The subsequent facts bear that out.

MADAM CHAIR: Mr. Samson.

MR. MICHEL SAMSON: Madam Chair, that's not even a country mile near the question that was put to him, and I would ask that Mr. Fage be given the opportunity, again. It's a very straightforward question, yes or no, is it an accurate reflection, is it not an accurate reflection. He has not even come close to giving an answer. If he refuses, then let him say he refuses, but certainly the answer given there is nowhere near a country mile of what was asked. So I would suggest that the question be put to him again. Yes or no, or does he just refuse to answer for the reasons he has given before?

MR. FAGE: As I've previously stated, when I stepped down as minister, upon reflection I decided that I hadn't fully disclosed the relationship with S&J Potato Farms. Obviously in making that decision, because I had not fully disclosed to my colleagues, I had put myself in a conflict position, and I resigned my seat. That's the long and the short of it.

MR. MICHEL SAMSON: Madam Chair, let the record show that was nowhere near an answer. I have no idea why the member wouldn't at least tell us yes or no, or he's refusing to answer it. To have given us what he has just given us, I don't know what his strategy is but I would submit to him that it's not working very well.

Based on what we've heard from the member in camera, I see no reason why - he certainly did not give us any information and did not respect the wishes of this committee. I would make a motion that the minutes, in Hansard, of this in camera meeting be made public in light of the fact that we've been given no additional information, certainly nothing that would be of any concern to privacy, and would move that the Hansard of this in camera meeting be attached to the Hansard of our main meeting and be made public in its normal course.

MADAM CHAIR: There's a motion on the floor. Is there any discussion on the motion?

Mr. Steele.

[11:30 a.m.]

MR. STEELE: I wonder if I could have just one minute to confer with my colleague. Although I understand what the member is saying, on the other hand, the prudent thing might be to wait for the written transcript and have the subcommittee review it, rather than making the decision right now. I'd like to confer with my colleague for a moment, if I could.

MADAM CHAIR: I think that's appropriate, but I also want to make reference to the two letters we've received from Mr. Keefe.

MR. MICHEL SAMSON: I think that should be in full committee.

MADAM CHAIR: If you would let me do so, and then if you think it's improper, I will withdraw what I've had to say. This has been raised by some members of the committee, these letters, and the Cabinet confidentiality and the tradition as a justifiable reason for the witness not responding to those three questions. I think that profoundly misinterprets what we've been told, even by Mr. Keefe.

In the first letter he wrote us he quoted from our own operating document, saying the following: "In carrying out its role the Committee will seek to . . . obtain all financial information and documents necessary for the Committee's work except for records which are privileged in the narrowest sense, such as Executive Council papers . . ." It seems to me that these questions are not

violating those principles whatsoever. I would like to draw that to the attention of Mr. Fage - from Mr. Keefe himself.

MR. PARENT: Madam Chair, on a point of order. I guess maybe you feel more qualified to judge between lawyers than I do, but the prudent thing would be if your judgment is right as Chair, why not ask Mr. Keefe for an interpretation, and then we'll find out for sure whether he and Mr. Hebb are in agreement or not?

MADAM CHAIR: First of all, this is not a point of order. Secondly, you don't have to be a lawyer to read the letters we've received. I want to proceed with the second letter we've received, because it outlines, on Page 3, a number of considerations, in terms of what privilege extends to or does not extend to. I have to say that in reading those aspects of what Mr. Keefe has said to us, these questions fall entirely outside of even his own submissions to this committee, in terms of what conforms to the doctrine of Cabinet privilege.

How the witness is able to assert that he cannot answer these questions based on privilege is beyond my understanding, my comprehension, because even the correspondence we have from Mr. Keefe would not go that far, I would say, and is primarily referring to other documents in a very narrow sense. I guess what my plea to Mr. Fage is is to look carefully at what Mr. Keefe has had to say, I'm sure you have had the benefit of this information, and to reconsider your position with respect to those three questions that have been posed. That's all I want to do before we deal with the motion.

Mr. Steele.

MR. STEELE: Having had an opportunity to confer with my colleague, we support the motion.

MADAM CHAIR: Mr. Fage, having heard my reading of these two letters, I would ask you just one more time to consider responding to those questions that have been placed.

MR. FAGE: I've responded forthrightly, factually and truthfully to all questions put. Thank you, Madam Chair.

MR. DEWOLFE: Madam Chair, on a point of order. Mr. Keefe would have no idea, when he submitted that letter, what the questions would be today. I don't think your points are valid.

MADAM CHAIR: We have a motion on the floor. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Mr. Samson.

MR. MICHEL SAMSON: Madam Chair, before you do make a motion to adjourn, I wanted to raise concerns about the documentation that we've been provided by S&J Potato Farms from the Office of Economic Development. Specifically, someone has gone through these documents and has made a decision on where to claim Cabinet confidence, where to claim solicitor-client privilege.

I would request that the Chair make inquiries as to who made these decisions, was it a lawyer, was it a member of the Civil Service, who made that decision? First of all, it will be curious to see what sort of competence they have to make those kinds of decisions, because, basically, they've gone through and decided, in one case, where a summary was Cabinet confidence but the rest of it was not.

In one case, we have a communications package to the minister that has been declared to be Cabinet confidence, talking points to the public, to Nova Scotians about how their tax dollars were spent has been declared Cabinet confidence, which I believe is completely unreasonable, to say the least.

Second of all, from a legal standpoint, someone has made a decision to declare some of these documents solicitor-client privilege. Two problems - we need to know who the client is. Who is the client who has declared privilege from the advice they received from a solicitor? I don't think we can legally ask who the solicitor is, that might fall under privilege, but we need to know who the client is. That can't be hidden. We need to know who waived that. Who was the client, and was it the client who waived it, because we have a right, as a committee, to ask that client, whether it's Mr. Fage or anyone else, did they choose to invoke their solicitor-client privilege.

Those answers are not readily available. I would submit to you, as Chair, that you make the requests from the Office of Economic Development, to get the answers to those questions. Who or whom, if there's more than one person, went through this document, decided what we could see, what we couldn't see, and on Cabinet confidence, and second of all, who was the client who has invoked solicitor-client privilege for the documents we have been presented?

I believe, possibly, a letter from you to Mr. Paul Taylor might be the most appropriate course of action, and I believe that those answers should be given. I can't see it taking more than a day or so. I would submit that a short time frame be given as to when we expect answers from that, because there may be a decision by the committee to either call those individuals or take further action to understand why these documents have been withheld from us and on what grounds.

MADAM CHAIR: I agree. I will undertake to do that.

Mr. DeWolfe, did you have a point of order?

MR. DEWOLFE: It's more a point of information. I think it's obvious that the client that's referred to in these documents is the Crown, the Executive Council, the Government of Nova Scotia.

MADAM CHAIR: We'll seek some clarification on that matter. Just one last thing, I tabled the subcommittee report, but we didn't vote on it. The clerk informs me that we really should do that.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

We will now have a motion for adjournment.

MR. STEELE: So moved.

MADAM CHAIR: The meeting is adjourned.

[The committee adjourned at 11:39 a.m.]