Humber Valley Paving contract: Nick McGrath says 'nothing untoward' about cancellation
Terry Roberts | CBC News | Posted: October 22, 2015 2:40 PM | Last Updated: October 22, 2015
Former premier Tom Marshall was 'quite upset' about secrecy of cancelled contract, says top civil servant
The man whose political career suffered a tremendous setback over the controversial cancellation of a major paving contract in 2014 says he did "nothing untoward," despite repeated assertions from opposition politicians to the contrary.
- Nick McGrath quits cabinet over paving fiasco
- Humber Valley Paving should've paid penalty, Lisa Dempster says
Nick McGrath's actions also came under fire from the province's top civil servant during proceedings Thursday before the House of Assembly's public accounts committee.
The committee is reviewing the decision by McGrath to terminate the $19-million contract with Humber Valley Paving for roadwork in Labrador, and not to call in a $9.5-million bond against the company.
McGrath, who was transportation and works minister at the time, vehemently defended his actions while speaking by teleconference with the committee.
"I was trying to protect the taxpayer," McGrath said by teleconference, when asked to explain why it took just for hours for him to cancel the contract on March 13, 2014 after learning that Humber Valley Paving would not be completing the work.
Close links to the Coleman family
The decision sparked controversy because of its political overtones, with Corner Brook businessman Frank Coleman at the time poised to become leader of the Progressive Conservative Party, and thus premier of Newfoundland and Labrador.
Coleman was the former president and CEO of Humber Valley Paving, and his son, Gene, was still a company executive at the time.
Coleman later withdrew has candidacy at the 11th hour, however, citing personal reasons.
The contract cancellation eventually resulted in a stinging auditor-general's report, and McGrath's resignation from cabinet a little over a year ago.
Humber Valley Paving received 'leniency,' says Osborne
McGrath, who is now actively campaigning for re-election in Labrador West, was repeatedly questioned Thursday about the speed at which the decision was made to cancel the contract, the decision not to challenge the company for defaulting on its obligations, and the political jockeying that was underway at the time.
He was also challenged for keeping his cabinet colleagues, including then-premier Tom Marshall, in the dark on the decision, which didn't become public until CBC News began asking questions nearly six weeks later.
One committee member, Liberal MHA Tom Osborne, suggested "normal protocol" was not followed and Humber Valley Paving received "a great deal of leniency."
McGrath denied there was any favouritism or politics involved, and kept stressing that his actions were designed to avoid pushing the company into bankruptcy, and protecting the interests of taxpayers.
"I wasn't seeing it as having political implications. I was seeing it as getting a job done and getting it done in the best form possible," McGrath said.
Leadership issue 'purely coincidental'
Eyebrows have been raised about the fact that the deadline for nominations for the PC Party leadership was March 14, 2014, the day after McGrath made the decision to cancel the contract.
McGrath called that "purely coincidental."
McGrath would not confirm Thursday whether he was supporting Frank Coleman's candidacy, saying, "I don't think that's relevant."
But he denied ever meeting or speaking with Coleman before the termination of the contract.
"The two had nothing to do with one another," he said.
As for his decision not to share the information with cabinet, McGrath said, "I just didn't do it. I had accepted the responsibility as a minister and I felt I was within the realm of my responsibilities and duties as a minister. It didn't seem important to me at the time."
Former premier 'was quite upset'
That's not how the former premier viewed it, according to Julia Mullaley, clerk of the executive council and secretary to cabinet, who also appeared before the committee Thursday.
"From my perspective he was quite upset," said Mullaley, describing how Tom Marshall reacted in late April 2014, when he learned that the contract had been cancelled after talking with a contractor at an airport.
She said there's a "requirement" for such a "significant issue" to go before cabinet.
"This decision by the minister — and I think it's recognized by everyone here that there was no issue in the legal authority of the decision — it was around the sensitivity of the decision," she said.
Rumblings being heard
Humber Valley Paving had been awarded a contract to pave 80 kilometres of the Trans-Labrador Highway, but that work was hampered by forest fires during the summer of 2013.
The company completed about 60 per cent of the work, and was paid accordingly, or just under $12 million.
McGrath said he felt an urgency to cancel the contract because he wanted to get the paving done on schedule.
He said a decision was made to recall two other tenders that were about to be called for roadwork in Labrador, and bundle all three into one contract.
He said that decision saved the province nearly $2 million.
As for the decision not to call in the $9.5-million bond against the company, McGrath said "we didn't feel that was the best route to go" because of the potential for a drawn-out court battle.
'I would have done things differently'
Meanwhile, the former transportation department deputy minister admitted Thursday that he would have done things differently if he knew that the premier was not aware of the decision to cancel the contract.
Brent Meade said he assumed that the former premier and cabinet were in the loop, or were about to be, when he was directed by McGrath to cancel the contract.
During a conversation with McGrath on March 13, Meade said he asked whether the matter should be "moved up the line" and reminded McGrath of the "political sensitivity" because of Coleman's involvement.
On the question of cancelling the contract, Meade said McGrath told him to "move on it today," while he was told "not to worry" about any political fallout.
"Based on the information, the way I drew it out, the questions I asked, I felt I made a judgment call that was the best I could make in that sort of situation," said Meade.
"If I had any inkling the premier didn't know, clearly I would have pursued other things, including contacting the clerk."