Mr. Speaker, my questions are directed to the Minister of Finance with regard to my statement earlier about the loan to Discovery Air to the tune of $34 million. The Minister talks about due diligence and when we review the report it’s surprising to me that there was no market disruption review done in regard to this particular loan. There are other lending agencies out there who had loans in place, they had a major stake by way of shared equity in this company, but they weren’t even contacted in regard to this government’s $34 million loan which undermines their ability to basically provide that service in the northern economy. Yet, Mr. Speaker, the loan that the Gwich’in presented at $10 million was at 9.25 percent but the government loaned some $34 million at 10 percent, which is higher than what’s presently in place now. I find that kind of odd.
I’d like to ask the Minister, during the evaluation of the loan request submitted by Discovery Air, did the government officials or Deloitte Touche provide information about the possible ownership, management options and what could be an exchange between the Gwich’in Development Corporation or other private investors such as lending agencies to take ownership of that loan?
Thank you, Mr. Krutko. The honourable Minister of Finance, Mr. Miltenberger.
Mr. Speaker, Discovery Air came to us with an unsolicited proposal. We dealt with the company that came to us. We did not, nor do I think it was appropriate for us to try to sort out whatever things may have been going on outside of our purview in terms of other interests, other financing. We were aware the general credit market was very, very tight, that there was time constraints. The level of detail that the Member is asking about the Gwich’in and their plans and all the other possible players were not something that came to our table. Thank you.
Mr. Speaker, it’s pretty obvious if he didn’t do a market disruption analysis of this loan, I guess you wouldn’t have got that information. But don’t you think by due diligence that that should have been done and why was it not done?
Mr. Speaker, this was a loan for an existing financing arrangement. There was no expansion to the firm. It was not considered anything but that kind of loan agreement and didn’t require a market disruption. Thank you.
Mr. Speaker, again, as I mentioned, there was an offer made by the Gwich’in Development Corporation and other lending agencies to the board of directors of Discovery Air based on an agreeable price and a percentage by way of the loan that they were willing to offer. They met with the board of directors before this government made the offer for $34 million. Was that ever considered and the question asked have you approached other lending institutions to see if they are willing to lend you the money versus you coming to the government for a $34 million loan?
Mr. Speaker, Discovery came to us with a request for $34 million. I understand, from what the Member is telling us, the Gwich’in offered 10. Discovery Air made a choice and they came to us with their proposal which we then considered. Thank you.
Thank you, Mr. Miltenberger. Final supplementary, Mr. Krutko.
Thank you. I think the Minister was misled or something as the Gwich’in had already loaned Discovery Air $10 million at 9.25 percent. They were willing to lend them more to get an increased share in regard to that company. I’d like to ask the Minister again, is this government going to follow some rules and procedures that are in place for other loans where you have to go to other lending agencies, get a letter basically showing that you were not able to get a loan from a bank or another institution before you come to the Government of the Northwest Territories so that rules and procedures can be followed with any loans that this government gives out in regard to this Immigration Fund?
Mr. Speaker, we followed the due diligence process. We did not think this was a market disruption. We did not query what other loans may have been out there. My understanding was that the $10 million loan had expired. We accepted and dealt with the company as they came to us with their request for $34 million, which we saw not only as a loan but as an investment with interest accrued and all the value-added at a time of extreme economic turmoil in the country, and in our own jurisdiction, a company that has hundreds of jobs, it has business relationships with other firms and aboriginal businesses up and down the valley. On that basis we reviewed this, did the appropriate due diligence and made the decisions. Thank you.
Thank you, Mr. Miltenberger. The honourable Member for Tu Nedhe, Mr. Beaulieu.
