Nova Scotia

Business fund under scrutiny

Nova Scotia's auditor general is expected to come down hard on a cabinet-controlled pot of money that's supposed to spur economic development.

Nova Scotia's auditor general is expected to come down hard on a cabinet-controlled pot of money that's supposed to spur economic development.

The Industrial Expansion Fund will be a key part of Jacques Lapointe's annual report, to be tabled Wednesday afternoon.

The IEF was created nearly 60 years ago. Previous Liberal and Progressive Conservative governments have used it as a rainy day fund for pet projects.

When in opposition, the New Democrats called it a political slush fund. But last year, the party boasted that it had committed the largest amount in the fund's history — $221 million.

Premier Darrell Dexter said he's ready for the auditor general's comments. He said some changes are necessary.

"I'm actually pleased to see that these recommendations are coming forward," he said Tuesday. "They echo what we have said in the past, and we will have an appropriate response."

Liberal Leader Stephen McNeil said it's hypocritical for a party that once called the IEF a slush fund to continue to manage it.

According to, a draft version of the auditor general's report includes several recommendations regarding oversight and selection of businesses that receive funding.

McNeil said the auditor general wants to take the fund out of the hands of cabinet ministers.

The Liberal leader suggests the money be given to Nova Scotia Business Inc. or another arm's-length agency.

"[Make] sure that the investments we make in the economy of this province are based on a sound business model based on the best interests of all Nova Scotians and not based on how it will affect the governing party of the day," said McNeil.

No 'free-for-all'

PC Leader Jamie Baillie said he thinks there's too much money in the fund. He suggests a range of $20 million to $30 million a year is appropriate.

"I won't put an exact number on it, but something that will allow for projects that for social reasons should proceed but doesn't turn into a free-for-all like we have now," Baillie said.

Baillie was once John Hamm's chief of staff. During his time in office — when Baillie was no longer part of his team — Hamm approved two controversial loans from the fund, one to a potato operation with links to one of his cabinet ministers and another to a theme park in his district.

The auditor general's report will also look at the fire marshal's officer and the rising cost of the new Colchester Regional Hospital in Truro.