‘Inappropriate’ activities, not watchdog report, led to firing ECBC boss, Ottawa says

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Justice Minister Peter MacKay is distancing himself from apparent patronage appointments at a Canadian Crown corporation, saying he had no hand in the hiring of a now-dismissed executive or the people he brought on.

The comments from the Nova Scotia MP, a key figure in Stephen Harper's government, came as Ottawa announced it had "terminated" the employment of John Lynn with cause as head of the Enterprise Cape Breton Corporation (ECBC) just one day after a watchdog's report found he had breached ethics rules by hiring four Tory-connected people with little or no paper trail or competitive process.

Mr. MacKay announced Mr. Lynn's appointment to ECBC chief in 2008. Two people who were members of Mr. MacKay's staff received what the watchdog said were apparent patronage postings to jobs funded by taxpayers. But Mr. MacKay says the decisions were not his.

"The president has lost his job, so we're respecting the report," Mr. MacKay said on Wednesday, before bristling at the suggestion that, as minister responsible, and the one who made the announcement, he had picked Mr. Lynn.

"Well, no, let's be clear. There was a name brought forward, and he assumed that position. It was his activities that have been deemed inappropriate. With respect to other individuals that were named, those were his decisions," Mr. MacKay said, an apparent reference to the ex-staffers Mr. Lynn hired.

After a year-long investigation, the Public Sector Integrity Commissioner of Canada released a report on Tuesday saying Mr. Lynn committed a "serious" breach of ethics rules when he made the four hirings in 2009 and 2010. Two of the people had ties to Mr. MacKay, while the other two had ties to provincial Progressive Conservatives. The commissioner's report cited an "element of deliberateness" and a "pattern" in Mr. Lynn's actions that left "the appearance that they were partisan appointments." The commissioner, Mario Dion, said it was up to the government to decide how to respond.

The government terminated Mr. Lynn's employment the same day, and announced it on Wednesday – but argued the basis for the dismissal was not the commissioner's report but an ECBC board investigation, which it would not make public.

"This decision was taken as a result of findings from an independent investigation undertaken by the Board of Directors of the Corporation that determined that Mr. Lynn's actions were incompatible with his position as CEO of ECBC," said the government statement, attributed to Rob Moore, the minister responsible for the Atlantic Canada Opportunities Agency (ACOA), of which ECBC is going to become a part. Mr. MacKay oversaw ACOA when Mr. Lynn was appointed.

Mr. Moore's office would not say directly if Mr. Lynn will receive severance, but said, "the Government of Canada does not provide severance when an individual's appointment is terminated with cause." Mr. Moore continued to handle the issue in Question Period, even opposition MPs' questions for Mr. MacKay on whether the people Mr. Lynn hired will keep their jobs.

The Liberals hope they will not, and have tabled amendments to a government bill to ensure the people who apparently got patronage jobs, two of whom still work for ECBC, cannot be transferred to ACOA. Liberal MP Rodger Cuzner has written to the head of the Public Service Commission, Anne-Marie Robinson, asking that the employees not be allowed to join ACOA as public servants.

"Individuals hired through such a tainted partisan process should not have their appointments, and the process through which they recived [sic] their appointment, legitimized by being transferred into the public service," Mr. Cuzner wrote in a letter obtained by The Globe.

Mr. MacKay is a friend of Mr. Lynn, who was once director of the Pictou County Chamber of Commerce, which is in Mr. MacKay's Central Nova riding. Mr. MacKay commended Mr. Lynn in an address to the House of Commons in 2001.

With a report from Kathryn Blaze Carlson