Liberal Government Summer Spending Spree Hits Atlantic Canada With $1.7B

OTTAWA — The federal government spent its summer announcing at least $1.7 billion in federal funding for programs and projects in Atlantic Canada, according to a HuffPost Canada analysis.

The Liberals won all 32 federal seats in Atlantic Canada during the 2015 election.

Funding announced over a 10-week period ranged from $11,000 to install new water-sampling stations in a New Brunswick village to $366 million announced by Infrastructure Minister François-Philippe Champagne on Aug. 16 for projects on Prince Edward Island over the next decade.

HuffPost reviewed all federal funding announcements made between June 21, when the House of Commons rose for summer break, to Sept. 3.

Other examples of infrastructure-related funding included $360,000 promised for a new building for the Miramichi Cross Country Ski Club in New Brunswick and $5 million to pay for the resurfacing of a runway at Gander International Airport.

The New Brunswick riding of Saint John-Rothesay, which has historically been a Conservative seat, tied with Charlottetown for the most number of new projects announced with eight each. The priciest riding-specific project was in Saint John-Rothesay: Public Services and Procurement Canada awarded a $67-million contract to a Saint John-based towing company for the lease of two offshore towing vessels set to be used off the British Columbia coast.

Liberal MPs and cabinet ministers were also busy announcing $43.1 million in regional investments to businesses. Money was distributed through the Atlantic Canada Opportunities Agency (ACOA), one of six regional development agencies under Innovation Minister Navdeep Bains’ portfolio.

The agency aims to “make strategic investments that build on competitive regional advantages,” according to the 2015 mandate letter given to Bains by Prime Minister Justin Trudeau.

The Atlantic development agency came in second for spending the most this summer, just behind the $1.13 billion announced by the Economic Development Agency of Canada for the Regions of Quebec. Both regions face fall elections (New Brunswick and Quebec) and saw joint announcements made by federal MPs and their Liberal provincial counterparts.

A countrywide analysis by HuffPost of summer government spending shows most of the money flowed to Eastern Canada, where the Liberals hold most of the seats.

One year out from a federal election, more than $1.1 billion in funding was announced across the crucial battleground of Quebec.

Dartmouth–Cole Harbour MP Darren Fisher told HuffPost that ACOA is important because it allows MPs to advocate for funding that will benefit their ridings.

He believes his constituents expect him to “fight for the projects that are being asked for in my region.”

In his district, where there’s a culture of paddling, canoeing, kayaking, and rowing, regional development money has flowed to club houses related to those sports.

When asked why it would be the federal government’s responsibility to fund paddling clubs, Fisher said he wasn’t sure.

“I see the federal government having a role in recreation. The previous federal government didn’t have a role in recreation, and a lot of things didn’t get done,” he responded. “Municipalities sometimes don’t have a lot of money. Provinces sometimes don’t.

“I think it’s important that all levels of government look at all aspects of community.”

Projects that receive money pass strict eligibility criteria, he said.

One of those recreation-related projects was the Canada 55+ Games. The Saint John, N.B. event drew sporty baby boomers from across the country to the East Coast this summer to compete in 24 events that included pickleball, hockey, running, and Scrabble.

Barbara Curry, co-chair of 2018 Canada 55+ Games Inc., the non-profit organization that hosted the event, told HuffPost the ACOA funds were helpful, though the process was a bit muddled.

The agency announced on Aug. 1 that it would make a $25,000 non-repayable contribution to help the group hire an event planner — three weeks before the games’ Aug. 21 start.

The application process was a lengthy one, Curry said, adding that forms were submitted in the summer of 2017 but that “it kinda got lost in space for a little bit.”

“It wasn’t a clear, understood process for a first-timer in all honesty,” she added.

Despite asking previous ACOA applicants and former government workers for help with her funding request, Curry said she faced disorganization on the federal end and had to hound the agency for updates.

The 2018 Canada 55+ Games turned out to be a great success, she said, drawing 2,300 visitors to the Maritimes city.

No public disclosure for repaid loans

ACOA provides funding on three different levels: non-repayable, unconditionally repayable, or conditionally repayable.

Companies that receive conditionally repayable funding are expected to generate some profits. Repayment hinges on whether a profit is made or the value of the business increases.

Unconditionally repayable funding is less forgiving if a business flops. Companies that receive these funds must repay the government “irrespective of the success or of the benefits resulting from the project.”

“The repayments vary by project types and recipients. ACOA’s goal is to be repaid within 10 years,” Étienne Chiasson, an ACOA parliamentary affairs and media relations co-ordinator said.

Contributions made to not-for-profit organizations are usually non-repayable, he said.

Although projects that receive ACOA assistance are publicized, Chiasson confirmed that the government does not publicly disclose which companies repay their loans.

‘Corporate welfare’ vs. ‘strategic investments’

Aaron Wudrick, the federal director of the Canadian Taxpayers Federation, doesn’t think the federal government should be giving money directly to businesses. He also dislikes the bureaucratic jargon used to describe federal grants.

“I think the average person understands a loan is something that’s repaid. So when you call it a non-repayable loan, it’s essentially a gift,” he told HuffPost Canada.

Critics, including former prime minister Stephen Harper when he was in opposition, deride the money handed out by regional development agencies as “corporate welfare.”

Harper’s tune changed drastically after becoming prime minister. He created two new agencies to hand out federal cash to businesses and local groups: the Federal Economic Development Agency for Southern Ontario and the Federal Economic Development Initiative for Northern Ontario (FedNor).

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Funding announced by regional development agencies, summer 2018

Economic Development Agency of Canada for the Regions of Quebec $68.7 million
Atlantic Canada Opportunities Agency $43.1 million
Federal Economic Development Initiative for Northern Ontario (FedNor) $12.7 million
Canadian Northern Economic Development Agency $11.1 million
Western Economic Diversification Canada $739,000
Federal Economic Development Agency for Southern Ontario $0

* * *

Wudrick said businesses fail every day, and it shouldn’t be the job of taxpayers to bail companies out. “This government has definitely not been shy about corporate welfare stuff,” he said.

Allen McCandless, president of Commercial Tent Rentals and Sales Limited based in Sussex, N.B., understands why taxpayer advocates have a problem with businesses getting public funding. But small businesses also return money in taxes, he said, such as when his employees pay income tax.

McCandless’ company bills itself as Atlantic Canada’s leading supplier of tents. ACOA announced at the end of June that it would give the company a $180,000 repayable contribution to “improve operating efficiencies, profitability, and maintain 30 jobs at the Sussex facility.”

Because his business is seasonal, McCandless said he would be unable to keep his 30 employees on full-time schedules without the funding.

“At the end of the day, I guess we just move forward, work with what we got, and you know, [we] try to operate things as efficiently as we can, based on where we’re located in Canada,” he said.

Since the Liberals came to power in 2015, planned spending trends for ACOA increased from $302 million during the last year of the Harper government to $336 million in 2016-2017.

For 2017-2018, the regional development agency has $311.5 million in available funding — which is a decrease of $24.6 million from last year, according to the 2017-2018 Main Estimates.

With files from Althia Raj