Three P.E.I. deputy ministers and/or their spouses received money for their companies under the Island's Provincial Nominee Program, the province's auditor general's report says.
The report, released Thursday, does not name which deputy ministers or bureaucrats at the deputy minister level, were involved, or when, but says under Treasury Board guidelines their involvement is a conflict of interest.
"There is an appearance that these individuals could have used their positions to gain approval under the program and therefore were in a conflict based on the Treasury Board guidelines," wrote Auditor General Colin Younker.
One civil servant at the deputy minister level, Brooke MacMillan, the CEO of the P.E.I. Liquor Commission, admitted last year to receiving money for one of his companies. MacMillan was deputy minister of innovation, the department in charge of the PNP, for much of 2008, but not at the time his company received the money.
The auditor general's report was highly anticipated for its section on the PNP, in particular the Immigrant Investor section of that program, which has been immersed in controversy since shortly after it was suspended by the province on Sep. 2, 2008.
The program allowed potential immigrants to the province to put up $200,000 to fast-track a visa, pending health and security checks by the federal government. A portion of that, $55,000, went for an investment in an Island business.
In late September, questions began to be raised about the quality of the companies invested involved, and that some of those companies were owned by government MLAs and senior bureaucrats.
Concerns about oversight of program
Early in 2008, the federal government notified the province it was changing the guidelines for the PNP, raising the minimum amount immigrants would have to put up from $200,000 to $1 million.
The province responded by putting a rush on applications before an imposed deadline of Sept. 2, and so a program that saw only 368 applicants in 2006-07 received 750 applications in 2007-08 and 1,877 from April 1, 2008 to Sep. 2, 2008.
In a media briefing with the media, Younker expressed his concern with oversight of the program as the number of applications mounted.
"The first problem we found in administration was the board was inactive," said Younker.
"Most of the changes were made at the program director level.… The board should be active, or why have a board?"
Of the more than 2,000 investment transactions made in 2008, Younker's staff reviewed a sample of 60 in depth, and another 35 in varying degrees of detail. He found a number of instances where exceptions were granted to policy at the program director level.
Three companies were approved that were professional services companies. Two companies were not-for-profit. None of those companies were eligible under the criteria.
The auditor general's office also found seven instances where eligibility concerns were raised by PNP staff and the deputy minister, and the transactions were approved by a senior bureaucrat, whom the report did not name.
The report also addressed a trust fund established by the province to pay immigrants their money back should the federal government not approve their application to come to Canada.
That fund currently contains about $9 million, enough to cover a rejection rate of about seven per cent of the 2,281 nominees who are currently awaiting approval from the federal government. While historically P.E.I.'s nominee rejection rate at the federal level is only two per cent, the report points out the 2008 nominees differ significantly from those that came before.
The bulk of those nominees did not have to travel overseas for an interview. Instead, that screening process took place in their own countries. The nominees did not therefore need to apply for a visitor's visa, which typically acted as a screening process.
In addition, agents were promoting P.E.I. partly because of its relatively fast processing times, an advantage that has been lost with the huge number of nominees in 2008. The federal government estimates it could now take two to four years to process all the 2008 applicants.
Given these differences, "federal representatives expressed concern that even a 10 per cent refund coverage might not be sufficient," Younker wrote in his report.
It is not entirely clear where the liability beyond the trust fund would fall, Younker wrote, and the government needs to seek further legal advice on that question.
The report found that four MLAs were shareholders in companies that received money under the PNP. Again, the MLAs were not named.
In three of those cases, the MLAs sought guidance from the conflict of interest commissioner, and had the investments cleared. Younker questioned some of the premises of the conflict of interest commissioner in granting that clearance, but noted the MLAs were acting in good faith.
"Each member who applied to the conflict of interest commissioner clearly intended to avoid a conflict situation," he wrote.
Younker noted that the books on the Immigrant Partner Program are far from cleared, despite its suspension last summer.
"The program's not really done yet," Younker told the media briefing.
"There's still 2,200 immigrants that have to go through."
Fewer than 400 of 2008's nominees have been approved and are now living on P.E.I., he said.