Sask. Party MLAS block querying of fund manager
REGINA A government-dominated committee blocked the Saskatchewan NDP from calling an investment fund manager to answer questions about why taxpayer-funded programs he’s paid to oversee are now millions in the red.
Cathy Sproule, the NDP critic for central services, tabled a motion Wednesday calling on Westcap Management CEO Grant Kook to appear before the standing committee on Crown and central agencies.
She wanted him to explain why the Saskatchewan Immigrant Investment Fund (SIIF) and the First Nation Metis Fund (FNMF) have reported significant losses over several years.
Saskatchewan Party MLAS, who hold a majority on the committee, held a brief recess to discuss the motion before voting it down. Sproule assailed the move, saying there’s no reason why Kook shouldn’t testify.
“A lot of taxpayer dollars that just went down the drain,” she told reporters after question period that day. The losses amount to about $16.3 million, according to NDP’S calculations.
But Joe Hargrave, minister of Crown Investments Corporation, said it’s somewhat less, around $14 million.
He said the programs have been a success, despite a few bad investments over their years in operation. All told, he said the losses amount to just 2.9 per cent of the total.
“I wish it was zero,” he said. “I’m not comfortable with anything, but you could ask the Royal Bank of Canada, the Bank of Montreal what their loan losses are like, and if they were at 2.9 per cent they probably wouldn’t complain.”
Hargrave said it isn’t common practice to bring someone like Kook before the committee. He said he can answer all of Sproule’s questions himself.
“If they have other questions why wouldn’t they ask me the questions?” said Hargrave. “I’m the minister responsible.”
Sproule called Kook a “well-connected Sask. Party insider.” Westcap donated $7,925 to the Saskatchewan Party in 2018. She said her party has “simple questions” about the business decisions he made when managing the funds.
“A lot of money went out the door on these, and we want to make sure that the work that Westcap Management was doing was responsible,” she said.
“It’s very difficult to get transparency and accountability when you don’t have the proper witnesses in front of the committee process. These are public funds,” she added. “They should be publicly examined.”
Specifically, she wants to know how much work Westcap put into managing the funds. The company earned about $10 million in management fees, but Sproule believes that the workload on FNMF, in particular, may have been quite light.
FNMF was intended to provide venture capital for First Nations and Metis businesses. It is no longer making new investments. Sproule noted that some of the money was quickly written off.
“We have some questions about some of the choices they made there in terms of the companies that got the funding, and how Westcap management made those determinations,” she said. “There’s a number of those loans that are in arrears right now — significant arrears.”
SIIF operates the Headstart on a Home program, which partners with developers to construct entry-level housing in Saskatchewan. It was funded through the federal government’s Immigration Investor Program, which has now been wound down.
Hargrave did provide an account of how SIIF lost money. He said the loss came from a single apartment project in Prince Albert, just one of 74 housing projects the fund invested in. He said the issue is still before the courts.
“The company that was doing the project went bankrupt … There was errors with the receiver,” he said. “The water was left on and the heat was turned off.”
He also suggested that it’s irrelevant that Kook has Sask. Party connections. “The fact that he supports our party is neither here nor there,” said Hargrave.
He noted that for FNMF at least, the contract with Westcap was awarded through a request for proposals under the previous NDP government.
A lot of money went out the door on these, and we want to make sure that the work that Westcap Management was doing was responsible.