The minister of transportation and works says he wasn't aware that incoming premier Frank Coleman had backed the bonds required for Humber Valley Paving to get the government contract for work in Labrador.
Nick McGrath responded to questions on the topic from Liberal Leader Dwight Ball in the House of Assembly on Monday.
During question period, Ball asked if Coleman had previously disclosed to government that he was a guarantor on the bonds, before the final decision was made to release them.
Ball said Coleman would have personally benefitted from the province's decision to release these bonds, which were valued at almost $20 million.
McGrath said his department doesn't deal with individuals named in the paperwork.
"In the department, when we put tenders out, part of our responsibility is to make sure that we have all the proper bonds and stuff in place. We do that, and once we've received the bonding certificate, we don't know who the guarantors are. We just make sure that the bonding papers are in place for the particular job," he said.
"The bonds are part of a contract. So when we mutually terminated the contract, with the conditions that we put forward, we also terminated the bonds with that."
Minister found out by watching On Point
McGrath acknowledged that he only found out that Coleman would've been on the hook for the bond after tuning in to the latest episode of CBC's On Point, that aired over the weekend.
"I watched the media on Saturday night, and that was when it was verified to me, on the media, that he was a guarantor," he said.
"Again, it's immaterial to the department. When we put a contract in place, as long as we have all of the papers, the bonds in place, it doesn't matter who guarantees them, as long as we have the bond in place with the contract. That's our responsibility."
Ball pressed McGrath about if he thought there was a conflict of interest when government decided to cancel the contract and release the bonds.
"I still stand that the decision that we made in the department — to move forward for the benefit of people in Newfoundland and Labrador, to get this contract finished on time and on budget — was the best decision that we could make," McGrath said.
"We've done everything necessary. This is before the auditor general. I welcome the auditor general into my department. I'm very anxious to see what he's going to say, and I feel confident that he will agree that the right decisions were made here."
McGrath also later conceded that Coleman did not disclose to him — nor to his knowledge, to any other member of government — his involvement as guarantor, prior to the cancellation of the paving contract.