ONB reveals millions of loans it will never see paid off

The New Brunswick government’s premier job creation agency has quietly written off tens of millions of dollars in business loans dating back more than three decades.

Opportunities New Brunswick has now officially said goodbye to all hopes of getting the money back, some of which date back to the Frank McKenna era and include well-known fundraising fiascos.

The largest amount is $ 7.4 million which went to Canzinco Ltd., then owner of the Caribou mine near Bathurst, in 1988-1989.

Other prominent names on the list include Atlantic Yarns Inc., Precision Nuclear, Royal Oaks Golf and Country Club, and Miramichi Lumber Products Inc.

The total amount the province is wiping off its books is $ 49 million.

While the losses are not new, People’s Alliance leader Kris Austin said compiling the amounts into one document and officially writing them off underscores the long-standing problem with government grants.

“It’s not surprising because we know this has been the model… when it comes to how the government subsidizes businesses. It’s disheartening but not surprising.”

Austin said the province would boost job creation with tax cuts.

“Corporate welfare is really not having the effect we would like it to have.”

People’s Alliance leader Kris Austin said the amount of written off loans is “disheartening.” (CBC News)

The $ 800,000 write-off at Atlantic Yarns is only a fraction of the $ 80 million Liberal and Progressive Conservative governments poured into the two textile factories in Atholville and Pokemouche in the late 1990s and early from the 90s.

“We obviously need to stabilize the industry and maintain jobs, and it is a major employer in the north of the province,” then Business New Brunswick Minister Greg Byrne said in May 2007, when he announced a new loan of $ 3.4 million for the company. .

Then-Progressive Conservative MP Kirk MacDonald supported this decision. “From my point of view, I consider that this protects the investment that we have already put in place,” he said.

But operations were closed two years later, putting 360 people out of work, one of many examples of job creation loans failed on the ONB list.

Two loans worth $ 500,000 to Precision Nuclear are also officially canceled.

This company was launched in 2006 with the aim of supplying Atomic Energy of Canada Ltd. with components for the refurbishment of the Point Lepreau generating station.

But AECL sued the company when it didn’t have the cash to meet its deadlines and ultimately abandoned it as a supplier. It closed in 2009.

55% of old loans deemed uncollectible

Opportunities New Brunswick spokesperson Autumn Lawrence said the crown corporation chose to formally write off decades of debt following a recommendation from Auditor General Kim Adair-MacPherson in 2019.

Although bad debts have been listed in more obscure public documents, the agency released the list online for the first time this year “as part of an increased commitment to further improve transparency and accountability to neo -Brunswicker, ”Lawrence said in a written statement.

Adair-MacPherson said in his 2019 audit that Opportunities New Brunswick owed $ 102 million on old loans and that about 55% of them were deemed uncollectible.

The write-offs do not affect the province’s bottom line, as they have been recorded in previous years, Lawrence said.

ONB wrote off $ 259,000 in loans to Miramichi Lumber Products Inc. 10 years ago.

Only one of the loans on the list has been approved by Opportunities New Brunswick, she said. The rest were taken out by former government job creation agencies.

She did not respond to a request for an interview with ONB representatives.

Another delisting on the list is $ 4.9 million from 2008-2009 for the Royal Oaks Golf and Country Club in Moncton.

The money goes back to a loan guarantee originally issued in 1998. It was converted to a loan in 2002 and then to a stake in the business in 2008.

A year later, the company’s bank called its loan and a receiver put the financially troubled property up for sale. The bank filed for the province as an authorized creditor to recover its money from the sale.

ONB also wrote off $ 259,000 in loans to Miramichi Lumber Products Inc. ten years ago.

This company found itself embroiled in several legal battles with the crown corporation over an insurance payment of $ 992,000 for a fire in 2015 at its sawmill.

There is also a $ 1.4 million write-off at Air Canada from 1996 to 1997 related to a “customer contact center”. The airline has a call center in Saint John that has received provincial funding over the years, including $ 1.5 million in payroll rebates as of 2018.

Air Canada spokeswoman Pascale Déry said any money the airline owed in April 2003 would have been “compromised and governed” by a court-overseen financial restructuring after seeking protection from the Air Canada Act. bankruptcy.

“We haven’t had this responsibility on our books for at least 15 years,” she said.

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