Debates of August 17, 2007 (day 12)

Thank you, Mr. Speaker. I welcome our friends, the Ambassador and the Consul General from the Netherlands. You heard Mr. Speaker say “Mrs. Groenewegen,” so there is one good name down here on the floor of the House.

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My questions today are for the Minister of Industry, Tourism and Investment, in keeping with my Member’s statement, Mr. Speaker. The Minister gave a good briefing on the BDIC business program and I thank him for that. One of the changes was to switch the focus to less developed communities and make no direct contributions available to level I communities. I would like to ask the Minister why this was an action and decision that was taken by this program. Thank you.

Thank you, Mrs. Groenewegen. Honourable Minister of Industry, Tourism and Investment, Mr. Bell.

Return To Question 146-15(6): BDIC Business Program Policy Changes

Thank you, Mr. Speaker. It is a philosophical change and I have talked to my colleagues on this side of the House as well, Minister McLeod about his days as an economic development officer in Providence. We know that the amount of money we have available for business development funds and the amount of grants to go out to communities has been decimated over the last 10 to 15 years. We see much less money available in terms of grants, so we had a shrinking pool. Most of the money was being accessed by the larger communities and it became very apparent that the larger communities had easier access to capital, not enough access admittedly but easier access, and that many of our small communities weren’t able to get much in the way of business development funding. So we’ve made a decision that we would target the grants to the smaller communities and try to improve loan access for the larger communities. Thank you.

Thank you, Mr. Bell. Supplementary, Mrs. Groenewegen.

Supplementary To Question 146-15(6): BDIC Business Program Policy Changes

Thank you, Mr. Speaker. Mr. Speaker, speaking of loan access to the larger communities, I would like to ask the Minister about the Community Futures Program. The GNWT has talked about accessing an extra $2 million through the SINED funding. I would like to ask the Minister what is the status of that application for that extra money? Thank you.

Thank you, Mrs. Groenewegen. Mr. Bell.

Further Return To Question 146-15(6): BDIC Business Program Policy Changes

I will have to get a formal update for the Member, from committee members, in terms of where the various different aspects of SINED funding sit today. There are very many schedules, targeted investment programs, application-based programming available. Individuals can apply through the Department of Indian and Northern Development to access funds. Government departments have been successful in accessing funds, whether it be for a road at Taltson, some runway work. There have been other pots of money that have been allocated across the territory. ITI has been involved in that. In terms of the specific $2 million that the Member is referring to, I will certainly have to get more information and I will provide an update as soon as I get that. Thank you.

Thank you, Mr. Bell. Supplementary, Mrs. Groenewegen.

Supplementary To Question 146-15(6): BDIC Business Program Policy Changes

Thank you, Mr. Speaker. Mr. Speaker, in terms of level I communities, the amalgamation exercise that took place with the Business Development Corporation, with that and the new programs that are available, what has improved for level I communities, which is a community I represent? Thank you.

Thank you, Mrs. Groenewegen. Mr. Bell.

Further Return To Question 146-15(6): BDIC Business Program Policy Changes

Mr. Speaker, the amount of our loan portfolio continues to grow. I don’t have a specific number here, but I believe the portfolio under the BDIC is in the $40 million range. That is up significantly, so we are getting more money out to our communities. The Member, in her statement, talked about the personal limits set now at $2 million for any one business or ownership group. We’ve had a lot of discussion around that. Our concern is we want to be sufficiently diversified. If one business runs into financial difficulty and we have a loan default, we want to make sure that that isn’t such a large part or portion of our loan portfolio that it has a devastating effect.

So we are discussing, and we will continue to review, those loan limits. But the best information I can give to the Member is our portfolio continues to grow; we continue to get more money out into our communities; we continue to work to improve the provision of service as well, related to our programming and the work the staff are doing in the regions. Thank you.

Thank you, Mr. Bell. Final supplementary, Mrs. Groenewegen.

Supplementary To Question 146-15(6): BDIC Business Program Policy Changes

Thank you, Mr. Speaker. Mr. Speaker, I would like to ask the Minister if they had ever considered a two-tiered lending program where the cap could be larger for existing businesses that are expanding and have a proven track record as opposed to the higher risk businesses that are fledgling, new and just being tested out for the first time? Perhaps a different cap for businesses that have already been operating for awhile and offer some history or track record that would give some level of comfort. Also has there been any more thought given to the patient capital program that was discussed? Has anyone tried to access it? Where are we at with that? Thank you.

Thank you, Mrs. Groenewegen. Mr. Bell.

Further Return To Question 146-15(6): BDIC Business Program Policy Changes

Several questions there, Mr. Speaker. I hope that I can keep track and remember them all, but in terms of the patient capital, this is one of the new programs proposed by BDIC. They are out actively consulting. They are around communities in the North. I hope Members are being advised and apprised that they are in their communities looking to consult with stakeholders on this. I think that can be a successful and new program for the BDIC. So these discussions are underway.

We are also looking at creating some differential rates, loan rates, depending on the level of risk to the business. We may have prime plus one, two, three, depending on the level of risk of the business is another thing that we had looked at, the BDIC is proposing. We were looking to put that into regulation.

Increased cap -- thank you very much to the Member -- there has been some discussion around this and I think our preference at this point would be to see those businesses that have a track record and are bankable, that we would get those loans out from under the realm of the BDIC and into the realm of the chartered banks. They don’t really need the BDIC support and we can move them off into the chartered banks. That’s what we would like to do and free up more money under our portfolio for new businesses. So there are some things we are looking at. If that isn’t really viable, then maybe this is something that we do need to look at and that would be a couple of different tiers of lending. So these issues are very much in a state of discussion and we continue the consultation on these initiatives.