Nova Scotia

Nova Scotia Liberals denied promised aid to Irving Shipbuilding

Nova Scotia's Liberal government reveals it refused to honour a $200-million loan guarantee offered to Irving Shipbuilding.

Government at first refused to reveal promised $200M in loan guarantees at all

Nova Scotia promised under the NDP government to guarantee up to $200 million in loans to Irving Shipbuilding, but the Liberal government refused to honour the agreement, a spokeswoman said Thursday. (Irving Shipbuilding)

Nova Scotia's Liberal government revealed Thursday it refused to honour a $200-million loan guarantee offered to Irving Shipbuilding in a secret 2012 provincial government letter to the company.

The $200-million loan guarantee was in addition to the $304 million in provincial government loans and grants pledged to the Halifax Shipyard as part of its winning effort to secure the contract to build vessels for the Canadian navy under the National Shipbuilding Procurement Strategy.

Secret letter details promise

The loan guarantee was part of the assistance package announced in March 2012 by the then-NDP government, but the exact amount was withheld until late July this year. That was only released after an appeal to Nova Scotia's information and privacy commissioner by the Canadian Taxpayers Federation.

The loan guarantee was detailed in the Jan. 10, 2012, letter from acting deputy minister Sandra McKenzie to Irving spelling out the province's financial commitment to the company. The letter released to CTF Atlantic director Kevin Lacey includes "a guarantee not to exceed $200 million."

Nova Scotia Premier Stephen McNeil was asked by Irving for that loan guarantee, but the premier refused, a spokeswoman said Thursday. (Andrew Vaughan/The Canadian Press)

'The request was refused'

In response to questions from CBC News, the Nova Scotia Department of Business said for the first time that the Liberals refused to honour that guarantee.

"The $200 million that's referenced was part of the negotiations under the previous government, but it was not formalized," spokeswoman Heather Desserud said in an email statement.

"After the change in government, Irving talked to Premier [Stephen] McNeil about accessing that $200 million in assistance, but the request was refused."

Irving Shipbuilding maintains the investment has been a good one. (Sabrina Fabian/Radio-Canada)

Other funding used

The original agreement included a $260-million forgivable capital loan, which has been fully disbursed, and is in good standing, the statement said. Another $44-million forgivable loan has been executed, but has not been drawn down, or used, Desserud said in the statement.

Providing additional information could violate existing agreements, her statement said.

Irving Shipbuilding said it is paying a commercial interest rate on its active provincial government loan. 

"The additional loan guarantee referenced has not been utilized by Irving Shipbuilding," company spokesman Sean Lewis said in an email statement to CBC News.

Kevin Lacey of the Canadian Taxpayers Federation had to appeal a response through freedom of information legislation in order to find out how much financial aid the Nova Scotia government promised Irving Shipbuilding. (CBC)

'Shrouded in secrecy'

The size of the loan guarantee and the revelation that the Liberals rejected it was the result of a four-year pursuit for details by the taxpayer federation.

"This deal has been shrouded in secrecy from the beginning," Lacey said.

"Why does it take four years before we find out about this $200-million loan guarantee?"

Irving maintains the investment has been a good one, Lewis said.

"The modernization of the Halifax Shipyard and early stages of construction of the Arctic Offshore Patrol Ships have provided over $450 million in contracts to companies in Nova Scotia and over 4,000 direct and indirect jobs," he said by email.

About the Author

Paul Withers

Reporter

Paul Withers is an award-winning journalist whose career started in the 1970s as a cartoonist. He has been covering Nova Scotia politics for more than 20 years.

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