Court rules ex-CEO “unlawfully” took more than $540,000 from Baffin Fisheries
Newfoundland-Labrador judge rules Garth Reid used company money for his own use
This is the building in Winterton, Newfoundland, described as a “lavish mansion and guest house,” that Baffin Fisheries ex-CEO Garth Reid is alleged to have constructed, as it looked in 2017. (File photo)
A judge of the Supreme Court of Newfoundland and Labrador ruled on Dec. 17 that the ex-CEO of Baffin Fisheries, Garth Reid, must pay $544,049, plus interest and legal costs, that he “unlawfully” took from his former employer.
That decision, rendered in St. John’s by Justice Vikas Khaladkar, arises from a lawsuit that Baffin Fisheries filed against Reid in 2017.
In that legal action, the fishing company, owned by five Inuit hunters and trappers associations in the Baffin region, alleged that in 2016 and 2017, Reid and his wife, Valerie Reid, unlawfully spent Baffin Fisheries funds for their personal use.
Those funds, Baffin Fisheries alleges, went into a “lavish mansion and guest house” constructed in the small town of Winterton, Newfoundland, overlooking Trinity Bay on the west side of the Avalon Peninsula.
The lawsuit alleged that Baffin Fisheries and its subsidiary, Niqitaq Fisheries Ltd., were invoiced by a Quebec construction company for construction expenses related to that house.
Those expenses were supposed to have been used for construction of a Baffin Fisheries office in Pond Inlet.
Following a summary trial application by Baffin Fisheries and Niqitaq, Khaladkar ruled that Baffin Fisheries had proven its case.
A Baffin Fisheries news release quotes Khaladkar as saying: “That first of all, Garth Reid unlawfully converted $544,049.17 to his own use. Secondly, I declare that the monies that were converted were the property of the [Baffin/Niqitaq] and that [Reid] had no right to convert the funds in the manner that he did.”
Khaladkar’s judgement follows a civil court process. No criminal charges have been laid in the matter.
At the same time, Baffin Fisheries will continue its civil court action against Garth Reid’s wife, Valerie Reid.
From her, they seek an additional $855,983 “related to the former CEO’s scheme to build a personal residence in Winterton with company funds,” the news release said.
“The Winterton Property was built not on the sweat and toil of Reid but rather constructed and paid for through deception, deceit and conversion of the financial resources of Baffin Fisheries, a not-for-profit corporation, whose sole purpose is to provide a financial return to hunter and trapper associations comprised of the Indigenous peoples of Nunavut,” Baffin Fisheries’ lawyer, Philip Buckingham, said in the news release.
“We have been instructed to vigorously pursue the misappropriated funds, and we will continue to do so,” Buckingham said.
Johnny Mike of Pangnirtung, the chair of Baffin Fisheries’ board, said the Dec. 17 judgment is good news for the Inuit of the Baffin region.
“This is welcome news for the thousands of shareholders of Baffin Fisheries, who are all Inuit beneficiaries under the Nunavut Land Claims [Agreement], living in the harshest, most remote communities in Canada,” Mike said.
“We will continue to work hard to recover all monies unlawfully taken, and return it to our communities.”
A letter from the Canada Revenue Agency sent to Garth Reid in September 2018, and obtained by Nunatsiaq News, suggests that Reid may have incorrectly reported his income for the 2016 and 2017 taxation years.
The correspondence, dated Sept. 10, 2018, includes the summary of a CRA audit, and a note that states Reid reported $205,497 in income for 2016.
But it states he did not report a total of $691,887 in “employee benefits” and “unreported revenue.”
So the CRA re-calculated his revised taxable income for 2016 as $897,384.39, and proposed he pay tax on that amount.
As for 2017, the CRA said Reid had not filed his 2017 income tax return at that point, but they calculated his total taxable income for 2017 at about $1.77 million.
“It was identified that you received taxable benefits from the corporation in your capacity as the chief executive officer as the corporation paid for your personal expenses related to the building of a residential property in Winterton, NL,” the CRA letter said.
“In addition, not all of the compensation you received from the corporation as consulting fees have been included in your income,” the CRA told Reid in 2018.
Colonialism is alive and well with people stealing from hard working northerners to make the south even more comfortable for the bosses…
Keep on fighting to get that money back!
I thought only people at First Air do these kind of things
This has absolutely nothing to do with “colonialism.” Baffin Fisheries Coalition is 100% Inuit owned and controlled, 100% Inuit controlled by an all Inuit board of directors who represent the five all Inuit owned hunters and trappers associations.
This happened because the Inuit owners and the Inuit board did not do their jobs. They provided no oversight over the paid managers of the company which allowed Mr. Garth Reid to take their money right from under their noses.
Probably this happened because the HTA members of the Inuit board of Baffin Fisheries did not have the education or the capacity to understand what was going on, or the ability to demand proper financial controls and reporting.
This happened because of lack of education and low capacity, not colonialism, and also pure greed on the part of the former CEO who must give back the money.
if It was found out by two Bfc board members (Iqaluit and Pond Inlet ) With the help of Bfc employee Baffinfisheries fisheries bankrupt would be gone by year end 2018
So I thank and congrats those two communities ( Iqaluit and Pond Inlet BFC board members for their hard work pays off and save the Baffinfisheries f
This has nothing to do with colonialism. It is about dishonesty and theft.
A wise friend in Newfoundland and Labrador has noted that Winterton was originally called Silly Cove. It is “a great historic community with a fabulous wooden boat museum. Reid has damaged the community cultural landscape and reputation and its good to see the court supporting Baffin Fisheries in the recovery of funds.”
Kenn I am sure you were joking when you stated Silly Cove rather than Scilly Cove.
About time some justice is served in this matter.
However from what the tax department is showing , the numbers are absolutely dazzling.
$897,000 take home pay in 2016
$1,777,000 in 2017!!!!!!!!!!
Who was authorizing these expenses and signing those cheques?????
Did he write his own blank cheque ?
In any case there are a lot of people that have been extremely negligent and have not done their job right.
This , over and above the issue with this crook has to be investigated by the beneficiaries.
Please people wake up !!
Thanks
It looks like that was exactly what he was doing. Cutting cheques to himself and calling them either “employee benefits” or “consulting fees”. Good thing the CRA caught it or he probably would still be at it. Begs the question as to what kind if financial oversight the BoD had over the operations of the company to let this happen in the first place.
Yup, its concerning. I seen guys come with FED pensions. Do 5 years at a higher rate or pay and leave. Increases their pension payout by 30-40%. In some cases they were promoted to a fairly high rank within the Government. Much to be expected. But things are changing. Used to be a lot of people on some sort of indeterminate contracts. They were worth more to the GN than their regular staff.
What does this have anything to do with the article? It’s a not for profit corporation.
I think you are confused about the article. These are the folks that seem to have good sound financial management skills. According to the article, that skill is clearly lacking with that business. Don’t concern yourself with the personal choices that people make about their future and why they decide to work for an organization. Instead, the concerns should be how do you attract people with the skills needed. The fact that the GN falls under the Federal Pension Plan is a good thing, not a bad thing.
Hey Between two worlds !!
Not for profit does not mean stupid or let`s go and dig in as it is an open bar or we have no clue or without any controls !!!!!!!!!!!!!
Come on , it is so easy to waste someone else`s money as long as you get a bit of it.
What was the financial structure and the approval process for expenditures ?
Who had control of the bank account ?
Where were the cheques issued ?
This is simply Business 101
Financial Advisor thank you for clarifying that point for me. Pissed off I didn’t mean anything by my comments nor did I imply that the company was an easy target or stupid in selecting the couple to employ them. Just bad luck they got the worst kind of employees with no scruples apparently.
Will need to look into the past and dig some graves who hired this person and he was the one who should be responsible as well and some of the board members , I have a broom to clean some dust if I can get a job with this company , see how this Board acts to improve future plans and benefits,
pain and pitiful for Garth as he was the Fisheries officer and was all it for him self while he talked when he was in Iqaluit .
Cleaner fresher air
This makes me think of 1.5$ taken from our Air Inuit by the few as ”Bonuses”. I guess the word ”Bonus” served them well.