Governments lose millions in company bankruptcy
Last Updated: Monday, November 16, 2009 | 10:11 AM AT
CBC News
The federal and P.E.I. governments have lost almost $3 million in the bankruptcy of a manufacturer located at the foot of the Confederation Bridge.
'Just tells us how outrageous the amount of waste is through these types of programs.'— Kevin Gaudet, Canadian Taxpayers Federation
Quality Thermoform was located in the former Strait Crossing office building in Borden-Carleton, and made hard plastic packages used by the electronic and automotive industries. It was an Ontario company that expanded to P.E.I. seven years ago.
Both ACOA and the province provided the company with million-dollar loans, and the province provided a further $750,000 grant. In addition, the company received money from two potential immigrants under the P.E.I. provincial mominee program. Both deals were made under the previous Progressive Conservative administration.
Not only was the immigrant investment lost, but fees were not paid to the intermediary who arranged the investment. That intermediary is now suing. Only $150,000 worth of the government loans was repaid.
"Just tells us how outrageous the amount of waste is through these types of programs," Kevin Gaudet, head the Canadian Taxpayers Federation, told CBC News Friday.
Gaudet said businesess looking for loans should be going to banks, not governments.
"Why is it the case that governments treat Canadian taxpayers' money so carelessly, with much less regard than a bank would?" said Gaudet.
"The companies go bankrupt, and they all go away, and the taxpayer gets left holding the bag."
CBC News tried to locate the company owner Tom Ots without success. Phone numbers for the business on P.E.I. and in Toronto have been disconnected.
A mortgage sale of the company's remaining assets on P.E.I. will be held in Summerside on Nov. 27.
