A condominium and retail-store developer named by the Liberal government to the board of directors of the Halifax Port Authority appears to have breached Prime Minister Justin Trudeau's ethics rules by attending a $1,500-a-ticket fundraiser for the governing party.
Jim Spatz, chairman and chief executive officer of Southwest Properties, was one of about 15 corporate executives who gathered on Oct. 13 at an exclusive Halifax fundraiser where Finance Minister Bill Morneau was the star attraction. He was the only person at the event who serves on a federal Crown corporation.
Mr. Trudeau's Open and Accountable Government ethics rules announced last Nov. 27 state that a public office holder should not "participate in a political activity that is, or that may reasonably be seen to be, incompatible with the public office holder's duty, or otherwise be seen to impair his or her ability to discharge … public duties in a politically impartial fashion, or would cast doubt on the integrity or impartiality" of the office.
Lisa Raitt, a former Conservative transport minister in charge of ports and a former senior executive at the Toronto Port Authority, said Mr. Spatz violated the rules by going to the Morneau fundraiser at the mansion of mining magnate Fred George, who is a business partner in a hotel complex in Halifax.
"They are supposed to be non-partisan. How does the public have the confidence that it can deal with the Halifax Port Authority board in a non-partisan manner if [Mr. Spatz] is going to these super-exclusive partisan events?" asked Ms. Raitt, now MP for the Southern Ontario riding of Milton.
Since The Globe and Mail reported on the Halifax event and other cash-for-access fundraisers across the country at which senior cabinet ministers are prize guests, the government has ducked all questions in Parliament about the Open and Accountable Government rules. Instead, Mr. Trudeau and his ministers have argued that they are not breaking election financing laws.
Mr. Spatz was appointed to the Halifax Port Authority as a federal director last May on the recommendation of Treasury Board President Scott Brison, the Liberal political power broker for Nova Scotia.
Sources have also told The Globe that questions have been raised within the port authority about the "self-evident" potential conflict of interest of having Mr. Spatz sit on the board. "The [Conflict of Interest] Act is a very instructive piece of legislation," one port authority source said. "You don't have to read very far into the act."
The code of conduct for the Halifax Port Authority says directors should "shall discharge their duties and arrange their private affairs in such a manner as to preserve and promote public confidence and trust in the integrity and impartiality of the authority."
The rules also say the "authority may be as equally compromised by the appearance of conflict as with the existence of an actual conflict."
Mr. Spatz is a major land developer in Halifax. He owns Bishops Landing, which includes shops, restaurants and condominiums, on the waterfront adjacent to the Halifax port.
The Halifax Port Authority hired outside consultants in September to examine the potential of moving one of the terminals as part of a master plan for a so-called big ships strategy that could open up 175 acres to property developers on prime waterfront lands.
Soil and slate from another major Southwest condo development is being dumped in the Fairview Cove terminal. The terminal is a short drive from Mr. Spatz's $140-million Pavilion in South Park condo complex, now under construction.
"We are able to help the developers by providing them with a reasonable disposal option, use that material to infill one of our water lots, and there is a development handling fee so essentially it's become a revenue stream as well," Halifax Port Authority spokesperson Lane Farguson told The Globe and Mail.
In an e-mail to The Globe, Mr. Spatz said there is no conflict of interest because his company is not directly doing the dumping.
"A third-party contractor has been engaged by Southwest, under a fixed price contract, to perform the South Park excavation, which includes disposing of the fill," he wrote. "Southwest has no involvement or benefit, financial or otherwise, in how or where the contractor disposes of the fill."
Mr. Brison defended the appointment of his friend, who donated $5,400 to his 2006 leadership campaign. "Mr. Spatz is a person of strong character [with] extremely strong governance experience and an understanding of business and good governance that can only strengthen the Halifax Port Authority," he told The Globe.
Halifax Port Authority board chairman Hector Jacques would not discuss how the board would handle any potential conflict of interest with Mr. Spatz. "I only only comment on board issues and only after a final decision or determination has been made on any matter before us," he said. "We have a strict confidentiality requirement."
A government official, who spoke on background, said Mr. Spatz would recuse himself from any board decisions affecting his business interests.
The Liberals promised during the election campaign to remove patronage and partisanship from the appointment process.
Mr. Brison played down the Halifax developer's assistance to him and the Liberal Party, saying that "Mr. Spatz has donated and supported members from various political parties over the years."
Mr. Spatz gave $1,100 to former provincial New Democratic Party leader Robert Chisholm when he briefly ran for the federal NDP helm in 2011 and has contributed to local NDP, Liberal and Conservative candidates in past elections.
Transport Minister Marc Garneau made the appointment on the advice of Mr. Brison and with the approval of Mary Ng, the Prime Minister's director of appointments.
His office issued a statement saying Mr. Spatz was thoroughly vetted. "The government always conducts an analysis of any real or perceived conflicts of interest prior to the appointment of candidates to governor-in-council positions, including the solicitation of such potential conflicts by self-identification of candidates," the office said. "As one of the region's leading real estate developers, Mr. Spatz brings a depth of experience and judgment to a board that manages 260 acres of land in the Halifax region."
The Liberals also noted that the former Conservative government appointed five Conservatives between 2006 and 2015.
The Halifax Port Authority has been working on a comprehensive plan to allow the berthing of the world's largest-class cargo and cruise ships in two terminals. The study comes as the city's two terminal operators are in merger talks to create one terminal.
As part of the port study, one option is to build a second new terminal in Shearwater on the Dartmouth side of the Halifax Harbour, with the federal government paying $1.2-billion for construction and dredging.
This would open up large tracts of prime waterfront land in Halifax for condo and retail development.