Scott McCrea and his family gave a lot of money to the PC Party in 2020; now McCrea oversees PC Premier-designate Tim Houston’s transition team

News

1. Scott McCrea

This item is written by Jennifer Henderson.

Scott McCrea is the man Premier-designate Tim Houston appointed to chair his transition team before he forms his new government, with cabinet ministers to be announced Tuesday.

McCrea is CEO and president of the Armour Group, a prominent Halifax development firm. McCrea is also a significant donor to the Progressive Conservative Party of Nova Scotia.

According to information contained in the Elections Nova Scotia 2020 report on contributions to each political party, Scott McCrea and five members of his family contributed a total of $24,150 to the PCs in 2020. The report on political contributions in 2021, the election year, won’t be available from Elections Nova Scotia until 2022. A tally of donations made to each political party during this summer’s election won’t be submitted until the end of December. 

The McCrea clan was the PC party’s most generous supporter in 2020. 

The Halifax Examiner wanted to know to what extent that may have influenced Houston’s decision to name Scott McCrea to head his advisory group. We requested a brief interview, but Houston’s communications advisor Catherine Klimek said the incoming premier had back-to-back meetings all day and was too busy to do any interviews. We agreed I would submit my questions by email and she would do her best to obtain a response from Houston.

The Examiner also reached out to Scott McCrea through the PC communications advisor to ask why he and members of his family had increased their support for the Progressive Conservatives in 2019 after Tim Houston became the party leader. So far, nobody is saying anything, but we will update the story if and when we receive a response. 

Show me the money 

Nova Scotia’s Election Financing Act was amended over the past decade to try and level the playing field and avoid scenarios where big money can buy access to the corridors of power. That’s why contributions from individuals have been limited to $5,000 a person. The Dexter NDP government further amended the Act to prevent corporations and unions from making political donations. That said, there is nothing to stop a political party from receiving multiple donations from people in the same family or the same neighbourhood or the same business who want to support a specific agenda. 

Let’s look at some numbers in the 2020 Elections Nova Scotia report on political contributions.

The McCreas donated $24,150 to the PCs in 2020 — Scott McCrea ($3,150), his wife Kim McCrea ($4,000), his mother Joannne McCrea ($5,000), sisters Alison McCrea ($3,000) and Janice McCrea ($4,000), and brother-in-law Rick Benjamin ($5,000) .

The family’s 2020 contributions were significantly higher than in the two previous years. In 2019, after Houston became party leader, McCrea family members donated $16,500, compared to $3,500 in 2018. 

It’s also worth noting that in 2019, Scott McCrea did not make a donation to the PCs but did make a relatively small contribution of $750 to the Liberal party of Nova Scotia. Coincidentally, that was the same year Armour Group was floating the prospect of building a new waterfront campus for the Nova Scotia College of Art and Design.

The 2020 contributions to the PCs by the McCrea family were $10,000 higher than those contributed by five members of another prominent business clan, the Sobeys. The Sobeys — David F Sobey ($5,000), Donald Sobey ($5,000), Frank Sobey ($2,000), Karl Sobey ($1,000), Paul Sobey ($1,000) — donated a total of $14,000 to the PCs in 2020, making them the second highest donor.

At the end of 2020, the PCs had received $563,659 in political donations and the Liberals had raised $874,834, according to Elections Nova Scotia Political Donations Annual Report. The Liberals were significantly better financed than the other parties headed into an election year but were not returned to government.

The new crowd 

Members of the transition team traditionally advise the premier-designate on who should become ministers in the new government. Transition team members also have access to briefings on policy matters from senior civil servants. 

The day after the election, Houston named Scott McCrea to chair his seven-person transition team; other members are:
• Nicole LaFosse Parker, lawyer and chief of staff and general counsel to the incoming premier
• Chris Lydon, regional senior vice-president, m5 Public Affairs
• David MacGregor, former principal secretary to premier John Hamm
• Cam MacKeen, campaign co-chair, lawyer, and former reporter for the Herald
• Tara Miller, campaign co-chair, lawyer, and former Progressive Conservatives party president
• Karen Oldfield, former CEO of the Halifax Port Authority and initial chief of staff for Premier Hamm

The Examiner asked Houston the following question:

As a prominent developer of major commercial and residential buildings, McCrea’s Armour Group stands to benefit from PC government decisions around business, taxation, and housing. Does the Premier-designate acknowledge there may be the potential for conflict of interest in allowing Mr. McCrea to influence decisions about who will be the Ministers responsible for these portfolios?

We’ve received no response.

The McCrea family’s connection to the Progressive Conservatives goes back to Scott’s father, Armour “Ben” McCrea. Ben McCrea was a prominent developer as well as a friend and financial supporter of Conservative Premier John Buchanan. 

The Armour Group is associated with many real estate developments in downtown Halifax: the good and the bad. Engineer and company founder Ben McCrea helped preserve and develop the iconic Historic Properties area along the Halifax waterfront. He also built Founders Square, an office building on Hollis Street that once housed many government departments and still has a display of historic Nova Scotia figures in its atrium.

After Ben McCrea’s death in 2013, his son Scott completed the RBC Waterside building. Scott is the driving force behind the recently completed Queen’s Marque monolith on Lower Water Street, a commercial and residential development that was approved by municipal councillors despite concerns raised by HRM planning staff about the building’s size and design. Other writers have praised Queen’s Marque as both modern and “iconic.”

Scott McCrea’s name surfaced last June in a story by Globe and Mail reporter Greg Mercer.

It detailed some of the behind- the-scenes manoeuvring to oust the former president of NSCAD University; Aoife Mac Namara was fired in June 2020 after she refused to spend time considering a proposal from the Armour Group. McCrea’s proposal included buying from NSCAD two heritage buildings on Granville Street that need significant upgrading. The Armour Group offered to build the university a new space near the waterfront that it could lease from Armour.

According to documents obtained by the Globe & Mail, Mac Namara was concerned about any perceived or potential conflict of interest that could arise from meetings with a developer prior to the College making a formal Request for Proposals. NSCAD’s vice chair of the Board at that time, lawyer Sean Kelly, counted Armour Group among his firm’s clients. It was Kelly who in June 2020 introduced a motion to dismiss Mac Namara as president of NSCAD.

All of that is water under the bridge. Scott McCrea is a successful business man. He and his family are free to back any politician they like. The question being raised is not whether money talks but rather how closely Houston is listening.

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2. More evictions

“Police have evicted three more people living in tents from parkland in Halifax,” reports Zane Woodford:

It’s the first action since the forceful eviction of several people living in tents and Halifax Mutual Aid emergency shelters from four parks in Halifax last Wednesday, when dozens of police officers were dispatched to the former Halifax Memorial Library to carry out the city’s plans.

The latest evictions happened Wednesday night, when two Halifax Regional Police officers approached a group of three men camping in two tents on the Halifax Common.

Click here to read “Halifax police evict more people living in tents from city parks.”

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3. COVID

There was just one new case of COVID-19 announced in Nova Scotia yesterday.

As the Delta variant of the virus runs rampant in much of the rest of North America, it remains to be seen to what degree this province will be affected. In past surges of the disease, Nova Scotia was a few weeks behind Ontario and Alberta, and so if that trend continues, we’ll see a significant outbreak in September.

However, it’s impossible not to be heartened by Nova Scotia’s vaccination rates, which are the highest in Canada and among the best in the world. I detailed that success yesterday:

… As of end of day [Wednesday], 77.6% of the entire population have received at least one dose of vaccine, and 70.2% have received two doses.

However, the approximately 8,000 military personnel stationed in Nova Scotia were vaccinated through the military’s vaccination program and are not included in the above percentages; if they are included, then the double-dosed percentage increases to 71.1% of the entire population…

Of those eligible to be vaccinated (those 12 years old and older), 87.9% have received at least one dose, while 79.8% have received two doses. That’s a rough estimate on my part, using my best guestimate of population age cohorts. Again, if we include military personnel, the double-dosed percentage increases to a whopping 83.6% of those eligible.

That’s an astounding level of vaccination for those eligible. As there are still around 700 or so people every day getting their first dose, it’s entirely possible that Nova Scotia will reach 90% of those eligible getting double-dosed.

Vaccinated people can get the disease, albeit they fare better than the unvaccinated, and vaccinated people can spread the virus (although it’s not entirely clear just how contagious they can be). So the largest worry here in Nova Scotia is for the young children, as kids 11 years old and younger cannot be vaccinated.

When I raised that concern, Chief Medical Officer of Health Dr. Robert Strang was dismissive, saying that a highly vaccinated population and continued border controls will largely protect children, and that moreover children don’t get as sick when they get COVID.

As for the border controls — unvaccinated people travelling in must self-isolate for two weeks, partially vaccinated people travelling in must self-isolate for one week — maybe?

Most people follow the restrictions, but when the number of travellers gets higher — as it did just before the third wave hit Nova Scotia, and as it is now that tourism is rebounding — it becomes a percentage game: the small percentage who don’t follow the rules become significantly more dangerous, and it’s just a matter of time before there’s community spread.

That’s not such a worry for the vast majority of us who are double vaccinated, but it’s only two or three degrees of separation from a rule-breaking, virus-carrying traveller and an elementary school classroom.

For myself, I’d feel a lot better about moving into the school year if Strang would continue last school year’s practice of preemptively closing at least elementary schools when there’s a positive case connected to it. Instead, he’s said just the opposite: schools will only be closed if and until after an outbreak occurs in the school.

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4. Comorbidities

An unnamed public interest group filed a Freedom of Information request with the province, asking for comorbidity data for those who died from COVID.

The province readily supplied that data, as follows:

I’m not sure what the point of this is — of course people with underlying conditions are more likely to die from COVID. Does that mean we shouldn’t care about them? Forget about Uncle Jake and his diabetes, he deserved his fate. The woman down the street with cancer? She was going to die anyway.

In the end, many of the pandemic doubters are just terrible people.

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5. Atlantic Gold

“SYDNEY (Australia)—St Barbara Ltd. said it swung to an annual loss because of impairment charges, as well as weaker output from some gold-mining operations,” reports Rhiannon Hoyle for the Wall Street Journal:

The company Thursday said it made a net loss of 176.6 million Australian dollars (US$128 million) in the year through June. That compared to a profit of A$128.2 million in the same period a year earlier.

The miner reported an impairment loss against assets totaling A$349.3 million, mostly related to the to the Atlantic Gold business.

Underlying profit, stripping out some one-time items, was down 26% to A$80.6 million. That reflected weaker production from its Leonora and Simberi operations, as well as lower sales from Atlantic Gold and higher depreciation and amortization associated with that business, St Barbara said.

In short: Atlantic Gold isn’t meeting profitability targets. Undoubtedly, the mining industry will point at meddling environmental activists throwing up procedural barriers, but I’m not aware of any actual success on that front by the activists. More likely, St Barbara projected profits based on an assumption that there would be no regulation or oversight at all from governing regulatory agencies, and the modicum of regulation that exists is taking the company by surprise. Or maybe gold is just in the tank.

Investopedia explains that “the technical definition of the impairment loss is a decrease in net carrying value, the acquisition cost minus depreciation, of an asset that is greater than the future undisclosed cash flow of the same asset. Impairment occurs when assets are sold or abandoned because the company no longer expects them to benefit long-run operations.”

In any event, maybe denuding and strip-mining the entire Eastern Shore isn’t the profit-making venture that’s imagined.

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6. Lawsuit alleges $350 million loss in gold royalty avoidance scheme

(So far as I know, besides being before the Nova Scotia Supreme Court, this item has nothing else to do with Nova Scotia or any of the gold companies now operating in the province. There’s not even the suggestion that companies operating in this province are implicated or in anyway involved in the alleged misconduct. I’m only reporting this because I haven’t seen it reported elsewhere, and it seems like a big deal.)

A  Toronto-based investment firm has filed a $350 million lawsuit in the Supreme Court of Nova Scotia, claiming that two gold companies conspired to illegally deprive it of royalties.

At issue is the Holt gold mine near Matheson, Ontario, about 100 kilometres as the crow flies north of Sudbury. Holt was first mined in 1988 by the Barrick Gold Corporation.

In 2004, Barrick sold the mine to the Newmont Corporation. According to court documents, the sale was conditioned on a royalty payment being made to Barrick, reflecting the value of future gold production. A 2009 Ontario Supreme Court decision by Justice L.B. Roberts [upheld on appeal] found that:

The Barrick royalty agreement required Newmont to pay to Barrick or its assigns royalties on the net smelter returns for gold, silver or other minerals produced from the Holt-McDermott mine. The Barrick royalty agreement also stipulated that Newmont would remain liable for any royalties to Barrick unless it obtained an assumption agreement from any transferee of those obligations and Barrick’s approval of the assumption agreement.

Newmont misread the provisions of the Barrick royalty agreement, erroneously believing that the net smelter return royalty for gold was an insignificant flat rate of .013%.

In actual fact, the Barrick royalty for gold was a sliding scale royalty tied to the price of gold. The Barrick royalty agreement provides for a two-step process in calculating the royalty for gold: first, the royalty factor is determined by multiplying 0.00013 by the quarterly average gold price; and, second, the royalty factor is multiplied by the net smelter returns or revenues for gold.

Newmont had not appreciated that there were two steps involved in the calculation of the royalty for gold. Newmont closed the transaction unaware of its error.

Just pause for a moment and think about this: a multi-billion dollar mining operation was sold, and the buyer for whatever reason misunderstood the terms of the deal. These are the stewards of our economy.

Then, according to the lawsuit filed in Nova Scotia, in 2006 Newmont sold the Holt mine (and other nearby operations) to St. Andrew Goldfields Ltd.

However, claims the Nova Scotia lawsuit, “Newmont did not produce a copy of the Royalty Agreement to St. Andrew. Instead, Newmont made representations to St. Andrew which purported to describe the terms of the Royalty. Newmont represented to St. Andrew that the Royalty was a 0.013% royalty on the net smelter returns, which (had it been true) would have constituted an immaterial and insignificant burden on the Holt Mine.”

In 2007, Newmont transferred its various royalty holdings to Franco-Nevada, a corporation that was “led by former Newmont executives” and is the world’s largest royalty company. It was only through the course of that transfer that the companies discovered the mistaken understanding of the Holt Mine royalties.

In 2008, Barrick sold its royalties to Royal Gold, a subsidiary of the Toronto-based International Royalty Corporation, and a competitor to Franco-Nevada.

I realize this is getting confusing, but bear with me. All this led to the lawsuit and the 2009 decision by Justice Roberts cited above.

According to the Nova Scotia lawsuit, from April 2011 to April 2020, Newmont paid Royal Gold $117 million in loyalties for the Holt Mine operation, and “as of March 2020, Newmont’s own estimation of its liability for future Royalty payments to Royal Gold was US $350,000,000.”

But in August 2020, Newmont and Kirkland Lake Gold announced a “strategic alliance” for various mining operations in northern Ontario, including the Holt Mine.

“Newport and Kirkland Lake have made perfunctory attempts to characterize this Strategic Alliance Agreement as a bona fide exploration agreement that permits them to jointly assess regional exploration opportunities in Ontario,” reads the lawsuit. “In reality, it is an agreement to condemn a productive gold mine and a transparent and unlawful attempt to allow Newmont to escape its obligations under the Royalty Agreement.”

The Hold mine still has potential. As of  Dec. 31, 2019, Kirkland said it contained 90,732 ounces of gold and considerable other resources, but the mine was shut down, causing 200 workers to lose their jobs.

None of the allegations have been tested in court. Newmont and Kirkland have not yet responded to the allegations.

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Government

No meetings

On campus

No events

In the harbour

Halifax
06:30: Nolhanava, ro-ro cargo, arrives at Fairview Cove from Saint-Pierre
08:30: Acadian, oil tanker, sails from Irving Oil for sea
12:00: Siem Pilot, offshore supply vessel, moves from Dartmouth Cove to Bedford Basin for trials
16:00: Pictor, container ship, arrives at Pier 42 from Portland
18:00: Nolhanava sails for Saint-Pierre

Cape Breton
16:00: Stemnitsa, oil tanker, arrives at Point Tupper from Es Sider, Libya

Footnotes

Sorry I’m so late today.

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