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Canada's Justice Minister Peter MacKay pauses while speaking during Question Period in the House of Commons on Parliament Hill in Ottawa May 26, 2014CHRIS WATTIE/Reuters

The Conservative government is pledging to "terminate" the employment of a Crown corporation executive in a bid to limit fallout from a damning watchdog report of apparent patronage appointments in Atlantic Canada.

The findings against John Lynn, earlier revealed by The Globe and formally made public Tuesday, are the result of a year-long investigation into appointments during his tenure leading the Enterprise Cape Breton Corporation, a Crown agency currently being rolled into the Atlantic Canada Opportunities Agency.

Mr. Lynn hired four Tory-connected candidates in processes that involved little or no documentation or competition, a "pattern" that a left an "appearance of patronage," a federal watchdog found.

Half a dozen questionable hiring decisions have now been investigated at ECBC and ACOA in recent years, with several of the individuals involved connected somehow to prominent cabinet minister Peter MacKay, a Nova Scotia MP who once oversaw ACOA. On Tuesday, Mr. MacKay would not answer questions about any involvement he may have had. Instead, another minister, Rob Moore, said the government accepted the findings and had "taken steps to terminate Mr. Lynn's employment." He would not say what those steps were.

In his ruling, Public Sector Integrity Commissioner Mario Dion said Mr. Lynn hired four people with ties to provincial or federal conservatives in 2009 and 2010. The appointments were not made after a competitive process and were "devoid of any demonstration that they were merit-based, leaving the appearance that they were partisan appointments," Mr. Dion wrote in his report, which concluded Mr. Lynn was guilty of a serious breach of ECBC's code of conduct.

According to a separate letter sent by Mr. Dion to Liberal MP Rodger Cuzner, the four staff members were Allan Murphy, a former political staffer of Mr. MacKay; Nancy Baker, who has worked for Mr. MacKay before joining ECBC and since leaving it; and Robert MacLean and Ken Langley, each with ties to the Nova Scotia Progressive Conservatives. Mr. Dion's public report did not identify these people. Only Mr. Murphy and Mr. MacLean still work for ECBC.

"It just reaffirmed what we had known for quite some time and what the community had known for quite some time – that ECBC was being used as a hiring hall for connected conservatives," Mr. Cuzner said after the report's release.

Mr. Dion said he found "no indication of a direct involvement" by Mr. MacKay. Asked what he made of the statement, Mr. Cuzner would only say: "There are a number of big, obvious dots, and people I'm sure will be able to connect those dots."

Mr. Lynn has been on leave since last year and his term ends next year. The timing of his departure remains unclear, and Mr. Cuzner said it's not yet known whether Mr. Lynn will receive a severance package.

The current minister responsible for ACOA, Mr. Moore, declined to say what would happen to the people Mr. Lynn appointed but an ECBC spokesman said Mr. Murphy and Mr. MacLean "remain employees of ECBC."

Mr. Moore's office noted the report cites a new hiring policy is already in place, and said the government is "committed to ensuring that we have professional, independent, non-partisan public service."

NDP critic Megan Leslie called the appointments "pork patronage" in Question Period on Tuesday, asking when Mr. MacKay would "come clean in his role in this." Mr. Moore responded on Mr. MacKay's behalf, saying he accepted the report's findings.

Mr. Dion's report follows similar questions at ACOA. Executive Kevin MacAdam, a director-general of operations and former MacKay staffer, lost his job this month after a Federal Court ruling called the hiring process "tainted." Mr. MacAdam is considering an appeal. Another ACOA appointee had earlier lost his job after an investigation, according to the Halifax Chronicle Herald.

  • JOHN LYNN: Mr. Lynn was appointed in 2008 as CEO of Enterprise Cape Breton Corporation (ECBC), a Crown corporation under the Atlantic Canada Opportunities Agency (ACOA). He is a friend of Justice Minister Peter MacKay, who was the ACOA minister at the time of Mr. Lynn’s appointment. Canada’s integrity commissioner found he improperly hired four people with ties to provincial or federal conservatives.
  • NANCY BAKER: Ms. Baker was a political aide to Mr. MacKay and went to ECBC before returning to Ottawa as a policy adviser to the minister. A LinkedIn profile for a Nancy Baker says she was “senior special assistant” to Mr. MacKay from 2006 to 2009, when she oversaw the implementation of ACOA projects and liaised with ECBC on “significant regional issues.”
  • ALLAN MURPHY: Mr. Murphy was a political staffer to Mr. MacKay and also ran unsuccessfully in the 2008 election for the federal Tories, where he placed second to Nova Scotia Liberal MP Rodger Cuzner. A government website lists Mr. Murphy as director of government relations and advocacy at ECBC, and a LinkedIn profile for an Allan Murphy says he started working there in April of 2010.
  • KEN LANGLEY: Mr. Langley worked as chief of staff to former Nova Scotia premier John Buchanan. He ran unsuccessfully as a provincial Progressive Conservative candidate in 1999. ECBC said he no longer works there, though a government website still lists him as director of legal services and strategic initiatives. According to a LinkedIn profile for a Ken Langley, he joined ECBC in January of 2009.
  • ROBERT MacLEAN: Robert MacLean worked as an executive assistant to former provincial Tory cabinet minister Cecil Clarke. He is listed on a government website as an ECBC director of corporate legacy.
  • KEVIN MacADAM: Mr. MacAdam, a former political aide to Mr. MacKay, was posted to ACOA in 2011 but his hiring was revoked in 2012 after the Public Service Commission found he was improperly appointed. Mr. MacAdam worked for Mr. MacKay for nearly four years before gleaning the ACOA post. He was also a former cabinet minister with the PC government in PEI and had quit that position to work for Mr. MacKay when the Conservatives took office in 2006.
  • SHAUN MASTERSON: Mr. Masterson, a former political staffer to Mr. MacKay when he was the minister responsible for ACOA, also had his ACOA appointment revoked, according to the Chronicle Herald.

With files from Kathryn Blaze Carlson

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