No disclosure on who gets Ontario business loans
Taxpayers need to know where money goes, lobbyist says
A $20-million federal program to provide loans of up to $500,000 to Ontario businesses does not require the public disclosure of the firms that receive the money.
The Southern Ontario Fund for Investment in Innovation — launched in July by Gary Goodyear, the minister of state responsible for FedDev, the economic development agency for southern Ontario — will be administered by a network of community development organizations, which will hand out loans of $150,000-$500,000 to provide “highly targeted support to innovative small- and medium-sized enterprises.”
Contacted two weeks ago, an administrator for one of the groups — the Eastern Ontario Community Futures Development Corporation — said the group did not intend to announce the recipients publicly, because the recipients often prefer to keep the loans quiet, but will send regular reports to the agency.
A spokeswoman for FedDev Ontario confirmed it won’t be making the loans public.
“The responsibility for reporting on loans approved through SOFII rests not with FedDev Ontario, but solely with the two administering bodies,” said Kerri Dunning in an email.
Contacted later, spokespeople for the eastern and western networks said they would consult with their boards and consider making the loans public. Neither group is certain it will make public the names of the people on the committee considering the loan applications.
It’s surprising that the program was designed without allowing for taxpayers to know where the money’s going, said Gregory Thomas, the federal director of the Canadian Taxpayers Federation.
“This absolutely should have been a requirement,” he said Wednesday.
Goodyear, who set up the fund, said in an interview Wednesday that he and his officials make sure the program is running effectively.
“There are obviously measures in place that I am privy to,” he said. “We watch that. In fact, we have instituted performance metrics on how they function going forward.”
The companies receiving the loans may not want that made public, he said.
“We try to find a balance between the privacy issues of corporations who may not want their competitors to know they need assistance, but that said, at my level we do have the ability to look at the metrics and audit them,” he said.
Thomas said taxpayers should be able to see who gets the money.
“I think the government must have an obligation to disclose where the money is going, who it’s being loaned to, what the terms of the agreement will be,” he said. “That’s what you’d expect.”
Community Futures organizations across the country have for years issued federal loans without public disclosure, usually for sums less than $150,000. Larger loans, however, are normally disclosed on the website of the federal regional development organizations.
Goodyear said the idea for the innovation fund came from community round tables, where a funding gap was identified. The loan agreements with the businesses that get the money require them to accept public disclosure, but the contribution agreement between the government and the development organizations does not provide for public disclosure.
It does, however, require the development organization to “participate in and assist with the co-ordination of a public announcement by the minister in the form of an event,” and “co-ordinate a mutual agreement on venue, date and time in light of the availability of the minister for public media events outlining project achievements.”