Finance Minister Tom Osborne spoke Monday about the ousting of longtime Newfoundland and Labrador Liquor Corp. (NLC) president and CEO Steve Winter.
In a statement issued late Friday afternoon, it was not clear Winter was dismissed by the government. It said only that he was being replaced by former NLC senior vice-president and chief financial officer Sharon Sparkes.
But Winter was dismissed. And according to Osborne, he was dismissed without cause.
Sharon Sparkes new interim president of NLC
The question of why he was fired still doesn’t have a straightforward answer.
The minister said he would not get into the details of what happened with the former NLC president and CEO. But Osborne said Winter disagreed with decisions being made on cannabis in the push to legalization.
Osborne also said the government needed someone at the head of the corporation willing and able to find additional “efficiencies” in the budget, without affecting service delivery.
“I wasn’t getting the feeling from Mr. Winter that that was as important an agenda for him as it is for government,” Osborne said.
Four o’clock and all’s not well
On the means and timing of the announcement, Osborne said a late Friday news release was not the government’s choice. It was tied to interactions on the day between government representatives and Winter, Osborne said, adding that Winter made “an overture” late Thursday.
Osborne would not say exactly what it involved. He also would not say if it followed any previous communications.
The minister was asked if there was an ultimatum involved.
“I’m not going to get into the specifics of that,” he said.
After the overture on Thursday evening, there was legal consultation within the government. Osborne said the clerk of the executive council contacted Winter early on Friday. A time was set for a meeting the same day. The minister said the meeting was cancelled at Winter’s request, then re-set for 3:15 p.m. Ultimately, there was a 4 p.m. news release.
Within his response to questions, Osborne said Winter had given indications to the government that he was near the end of his career.
The Telegram asked why he would not then be left to finish up in his post, to dictate his own exit.
“I believe to a certain degree he did,” Osborne replied. “I’ll leave it at that.”
Winter had been with the Crown corporation for a long time. He was appointed in 2004. In 2008, he was reappointed president and CEO, at a salary of $175,000 per year, with an eight per cent increase that July. The cabinet reappointment order stated future salary increases for government executives could be applied.
Winter’s salary reached $239,300 per year by the end of 2016, with another $8,000 in “other compensation” — a car allowance — according to the last NLC compensation disclosure report. He was the only executive to receive the car allowance, according to the report.
Osborne said the new CEO, to be appointed by the Independent Appointments Commission, will receive an annual salary of $190,000 and no car allowance.
Sparkes is receiving $190,000 in the interim-president and CEO role. She is not barred from applying to the commission to continue beyond the interim period.
Dismissed, then appointed
Progressive Conservative Leader Paul Davis challenged the government Monday, saying he had heard Sparkes was terminated from her earlier position with the NLC in December. Davis called the government’s statement on Winter “misleading” in how it stated her history.
Osborne was quoted only as saying, “Ms. Sparkes is very familiar with the NLC board of directors, having served as senior vice-president and chief financial officer since 2010.”
It did not mention any dismissal.
Osborne told The Telegram that Sparkes, as NLC vice-president and chief financial officer, had been working to find operational “efficiencies” and received pushback. He would not say whether or not he understood that was why she was let go.
He said he would not interfere with the work of the NLC’s board of directors.
Osborne also said he was disappointed when he heard Sparkes was no longer in her role as senior vice-president and chief financial officer.
While in that position, Sparkes had annual compensation of $167,000. Osborne said, in returning, she will not collect severance from her dismissal.
She will earn more in her new role, but will not approach Winter’s level of compensation.
The NLC handled $332 million in revenue in 2016-17, sending a $198-million dividend to the provincial government.
Osborne stepped into the Finance role in 2017. He said he realized in December the board of directors responsible for management of the corporation was short of members.
There were four, including Winter. There should be seven.
In May 2017, the Liberals made appointments, but not enough. The board has been operating with Winter, Victoria Belbin, Fraser Edison and chair Wayne Myles.
On Dec. 19, at Osborne’s urging, cabinet added Craig Martin, an assistant deputy minister from the Department of Finance, bringing the total board count to five.
The NLC board also needs a vice-chair, according to the act.
Osborne said he has directed the empty posts be brought to the Independent Appointments Commission to be addressed. He said he would seek guidance as well from the commission on maintaining a departmental representative on the board.
Reaction full of questions
Davis was asked about the board numbers, and said he is concerned right now with individual appointments, including the reasons behind Winter’s departure and appointments at the sub-board level.
He noted the position of senior vice-president and chief financial officer, formerly held by Sparkes, is now held by Lynn Sullivan. Sullivan is a past Liberal candidate. Davis said her appointment at the NLC doesn’t jive with the Liberals’ commitment to take politics out of appointments.
The same comments were made when Sullivan was previously appointed to an assistant deputy minister’s post in the Department of Natural Resources.
Davis was asked if people should be blacklisted based on political association or participation.
“No, you shouldn’t. But in the case of Ms. Sullivan, if you go back to when she was appointed to Natural Resources, there was an email exchange where she was asking what her job was going to be, what the salary was going to be, what her role was going to be. When you’re making appointments like that, it kind of flies in the face of taking the high ground and saying, well, they’re very qualified and we went through a process,” he said.
NDP Leader Lorraine Michael told The Telegram she is interested in the cost of Winter’s departure and the minister’s plans for savings in the NLC.
“We don’t see what the basis is for the minister to say that finding cost savings is a major issue for the NLC. The NLC is extremely, very profitable,” Michael said. “The 2016-17 annual report shows that the net earnings for 2016-17 increased 13.4 per cent since the 2013-14 fiscal year. They don’t look like they are in trouble. They’re turning over a profit, a growing profit, each year.”
She said Osborne’s comments regarding Winter are disingenuous.
Independent MHA Paul Lane questioned the cost of Winter’s departure to taxpayers. He spoke with The Telegram prior to the minister’s interview, posing the many questions circulating after the government’s initial, late-afternoon Friday news release.
“I don’t know what his contract contains. That’s something we need to know as well,” Lane said.
There are no official estimates on what the scenario will mean for the public coffers.
NOTE: Correction made as of 9:40 a.m. to clarify the dismissal was without cause.