E-Malt.com News article: Canada: Northern Breweries Chief Executive provided specific information pertaining to its operations

On May 29, in a closely contested decision, City Council of Sault Ste. Marie, Ontario, voted 6-5 to have Northern Breweries Chief Executive Officer Bill Sharpe come to the next Council meeting to provide specific information pertaining to its operations. Acting Mayor Steve Butland who has utilized print media to make a public case to have Sharpe be held to account was accused by Mr. Sharpe of hurting his reputation and business interests by such overtures, SooNews communicated June 12.

Sharpe appeared before Council and charted a course mired in fiscal computations of how much he has contributed, how much he has lost and how much the community has benefited from his acquisition of Northern Breweries. Butland had earlier stated he preferred the presentation to fall within the parametres of the resolution that would be structured on conditions of the company 18 months ago, the present circumstances, and what Council and taxpayers can anticipate in the short and/or long terms.

Neither Sharpe nor Council followed the parameters of the resolution, affording the presenter to control the directional flow of the discourse. Sharpe presented more financial information than he had presented prior to his getting the original deal of writing off tax arrears of CA$430,000 as a condition of his purchase of Northern Breweries in November, 2004.

In a bizarre twist, Sharpe pleaded with the media to not print such numbers as he wouldn’t want his competitors to note his financial circumstances. However, the creative fiscal oratory appeared to form the crux of Sharpe’s presentation. Although he mentioned he was behind in his current taxes, he accentuated a breakdown of CA$819,000 he claimed he has spent on his company. These included CA$350,000 for revision on packaging, CA$45,000 for revision of beer formulas, CA$225,000 for installation of new labeling machines, and CA$26,000 for date coding machines.

Sharpe’s fiscal analysis included unverified data such as CA$348,664.44 paid out to companies to provide services to his company, and salaries totaling CA$1,094,510.54 for 48 employees in 2005. Sharpe claimed to Council that he has worked for free since the acquisition and worked as many as seven days a week.

Sharpe stated, “I’ve lost a lot of sleep at night time. I should have started with a clean company, a clean slate, where it would be easier to attract investors. I hope it carries over. I’ve put in CA$700,000 of my own money. I didn’t secure those funds which is kind of dumb on my part.”

Council’s November 2004 decision to grant the tax arrears write-off also was not secured with any conditions. Council relied on good faith in part of maintaining the Breweries’ continuance, protection of existing jobs and Sharpe’s stellar reputation as an astute businessperson who had a history of effective business deals.

They overlooked his lack of an extensive business plan before Council, similar processes in Sudbury for the larger plant, his refusal to attach conditions to the deal or to take the money for tax arrears as a loan either with low interest or interest free. Due to Council affording Sharpe the original deal without conditions, Sharpe appears to be under no contractually/legally binding commitment to fulfill his promises.

Sharpe’s oral presentation did not include written evidence of such expenditures, nor was it requested by Council during questioning. Acting Mayor Steve Butland stated Council was not the author of Sharpe’s misfortune. Council appeared empathetic to Sharpe’s presentation, with some apologizing for his stated misfortune, and some thanking him for his contributions to the Sault Ste. Marie economy. Ward 3 Councilor Bryan Hayes, Ward 5 Councilor Debbie Amaroso and Ward 4 Councilor Neil DelBianco were the most empathetic.

DelBianco affirmed his earlier commitment to have Council approve CA$430,000 in tax arrears be paid for by the Economic Development Corporation. The EDC receives direct funding from Council on an annual basis. Sharpe wanted no conditions attached to eliminating the tax arrears, but had promised significant job creation over 4 years.

DelBianco affirmed, “I was one of the Councilors who voted for it, and knowing what I know now, I would have voted for it again. There are a lot of businesses with hardships in Sault Ste. Marie, but not the same circumstances at Northern Breweries. I still say it’s a good investment. In the meantime, he has generated a million dollars for Sault Ste. Marie.”

Ward 6 Councilor Frank Manzo disputed the numbers by Sharpe, dismissing both his original business presentation and the current presentation before Council. “The only numbers that matter are the CA$430,000 that was paid for by taxpayers. First of all, I don’t know why he is here in the first place since it was this Council who voted for this in the first place. Algoma Hotel needed assistance. There were two trucking companies that went out of business. Where was the EDC for these businesses? I would have supported the Northern Breweries deal if he would have taken a loan, even interest free, but he didn’t want to. This is taxpayers’ money we’re dealing with here.”

Acting Mayor Steve Butland was witness to a sharp presenter who skillfully orchestrated political foreplay. Sharpe refuted Butland’s charges that he did not reply to his requests for information. Sharpe stated he returned all calls except for one when he was traveling. He then blamed the media for misrepresentation and sensationalism. With Butland and the media portrayed as politically opportunistic and misguided respectively, Sharpe pleaded a case for fiscal suffrage. In presenting figures that were not in writing and that could be verified, Sharpe made himself out to be a victim of economic circumstances.

What could be conceivable if Sharpe’s numbers are to be given credence is that Northern Breweries is in dire financial circumstances. Sharpe inherited a tax write off as part of the purchase, and is already in tax arrears of his own. Council could be facing the exact situation it faced 18 months ago.



14 June, 2006