Halifax Mayor Mike Savage says Nova Scotia has to do more to confront systemic racism, calling the toxic work environment at a municipal transit garage detailed by a human rights inquiry "very disappointing."

"We live in a province where there has been systemic racism against African Nova Scotians," Savage said in an interview Thursday. "We have had issues within the city like all organizations and orders of government."

He added: "We all have to do better."

In a decision released this week, a Nova Scotia Human Rights Commission board of inquiry found that a bus mechanic married to a black woman with Aboriginal band status was subjected to unchecked racial discrimination and harassment.

Independent board chairwoman Lynn Connors said Halifax is "vicariously liable" for allowing a "racist" bully to run rampant at Halifax Transit.

The allegations against Arthur Maddox, who is no longer with the municipality, included a message scrawled on the men's bathroom wall, which said "all minorities not welcome; show you care, burn a cross." It was signed by "a member of the Baby Hitler."

Maddox is also quoted as allegedly saying "racism should be a law that you can shoot somebody and get away with it."

Savage said the city did the right thing when it dismissed the main perpetrator of the racial slurs and intimidation in 2001, but that he returned to work after an appeal.

Connors said in her decision that the city had argued that its hands were tied by the sunset clause of the collective agreement.

A city spokesman said the municipality had conducted its own workplace investigation prior to the human rights complaint.

"That investigation substantiated many of the same allegations and resulted in a number of recommendations which were acted on at the time," Nick Ritcey said in an email. "When the complaint was made to the (human rights commission) we attempted to settle the complaint but were unsuccessful."

The city also tried to have Maddox added as a party at the inquiry to answer for his conduct, he said.

But Ritcey said this was opposed by the commission and the transit union, leaving the city responsible for the employee's conduct.

"We accept the findings of the board of inquiry and will continue our efforts to eliminate any form of discrimination in the workplace," he said.

Halifax put forward a defence based on freedom of expression, arguing that the comments and dialogues of co-workers fell within the scope of constitutionally protected expression.

But Ritcey said Thursday that the freedom of speech argument was only made in relation to allegations that were not "racial in nature."

Jacques Dube, chief administrative officer for the municipality, issued an apology Tuesday to the complainant and his family.

Dube said he is committed to a harassment-free workplace where all people are treated with dignity and respect.

The municipality said it has taken steps to "build a culture of diversity and inclusion" through training and engagement with the African Nova Scotian community.

The complaint about racism at the transit yard was originally filed with the provincial human rights commission nearly 12 years ago, in July 2006.

A hearing is set for Monday to discuss the awarding of damages or assignment of mandated training.