N.S. government cuts Crown corporations in quest for more efficient operations

Premier Tim Houston is tasking "personal friends" to oversee the consolidation of five Crown corporations into two as his government works to take a more streamlined approach to economic development in Nova Scotia.

Houston announced Tuesday that Nova Scotia Lands and Develop Nova Scotia are being rolled into a new entity called Build Nova Scotia. Innovacorp, Nova Scotia Business Inc. and the Invest Nova Scotia Fund are being combined to create Invest Nova Scotia.

"Government has to be accountable for the decisions it makes," Houston said in Halifax."I'm not interested in hiding behind Crown corporations."

Oversight

Oversight for Invest Nova Scotia will fall to Economic Development Minister Susan Corkum-Greek. Public Works Minister Kim Masland will have oversight for Build Nova Scotia, with the exception of health-care redevelopment projects, which will fall to Internal Services Minister Colton LeBlanc, a former paramedic.

The CEOs of Innovacorp, NSBI and Develop Nova Scotia were fired Tuesday and the boards for the organizations were dissolved, with the opportunity to remain in an advisory capacity during the transition.

The government says $100 million in spending passes through the five organizations each year.

The changes follow a review of 20 Crown corporations that started last winter. Houston said the moves are about running a more effective government.

He rejected the idea that removing decision-making power from boards and rolling organizations more directly under government control could create a situation where the government is picking winners and losers.

Decisions about where government funding will go will be made by "very qualified CEOs" who report directly to government, he said.

Personal friends

Until full-time CEOs are hired for the new Crown corporations later this year, the people making decisions will be Tom Hickey at Invest Nova Scotia and Wayne Crawley at Build Nova Scotia, bothas interim executive chairs.

Houston said he identified Crawley and Hickey from a short list of candidates. Each will be paid $1,500 a day, up to $18,000 a month, for their work.

"I've been kind of a secret admirer, I guess, of theirs for quite a long time," he said, later adding that both would be well known within the province's business community and as philanthropists.

"They're personal friends of mine. I've known them for a long time. They've very, very competent people and I have tremendous faith in their abilities."

Corkum-Greek said the changes should address gaps and redundancies identified by people trying to get projects off the ground.

Opposition concerned

The announcement came on the same day Houston recalled the legislature to pass a bill blocking a binding pay raise that's scheduled to kick in for MLAs.

NDP Leader Claudia Chender called the timing "strange."

"I think the government should be thinking about health care," she told reporters at Province House. "I think they should be thinking about the cost of living."

Chender said the premier appointing friends to important positions "inspires no confidence."

Fred Tilley, the Liberal critic for economic development, agreed.

He said he's concerned the consolidation of power and removal of boards with authority amounts to less transparency. He pointed to a similar move Houston made about a year ago when he fired the CEO and board of the provincial health authority, replacing the CEO with a member of his transition team.

"Crown corporations being arm's length from government and moving that to centralized seems to be a theme for this government," he told reporters.

Full review underway

Corkum-Greek said a full review of economic development tools, including payroll rebates, is underway to ensure the government is fostering business development. Corkum-Greek said the key issue identified by businesses is labour availability, not so much the cost of labour.

The minister said she objects "to the idea that we have to discount our people" through payroll rebates toattractbusiness to the province. "They have been useful in the past. They have helped build an IT sector here. So they have had their place."

Other changes announced Tuesday include turning Perennia Food and Agriculture Inc. into a new Crown corporation.

The Nova Scotia Gaming Corporation and Nova Scotia Municipal Finance Corporation are being dissolved and their operations are being rolled into the Finance Department.

Art gallery board

Work continues to review the governance at the Art Gallery of Nova Scotia, where the board currently does not have enough members to meet quorum.

Houston said there would be information in the coming weeks about the governance of AGNS and the future of a planned new gallery.

He would not answer directly when asked if he was considering cancelling the project and directing the money toward the redevelopment of the Halifax Infirmary, a project that is expected to come in well over budget when the only company bidding on the tender submits its final proposal in the fall.

"I'm a big believer in the value of arts to society and to our community.But I'm an even stronger believer in making sure that we run an effective government that focuses on the everyday needs of Nova Scotians as they sit now," he said.

Along with the review of Crown corporations, Houston said a review of all agencies, boards and commissions showed that 485 are defunct, inactive or redundant.

Review process continuing

The review process will continue in the fall with a look at 160 more organizations with an eye on things such as overlapping mandates, duplication and outdated legislation.

More change would be inevitable and the premier would not rule out job losses.

"It's our obligation to the taxpayers of this province to make sure that we run an efficient government," he said.

The government said severance will be owed to the outgoing CEOs of Nova Scotia Business Inc., Innovacorp and Develop Nova Scotia.

Laurel Brotenat NSBI is entitled to 12 months of severance. Her annual base salary is $219,603.28. Innovacorp CEO Malcolm Fraser is duesixmonths of severance, which amounts to approximately $83,750. Jennifer Angel at Develop Nova Scotia is entitled to sixmonths of severance, which will be$88,882.43.

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