Valid business use of PNP funds has been obscured by MLA and senior civil servant wrong doing

This story was in last week’s Eastern Graphic and I missed it until I went to Kings County on Sunday. Everyone in Kings County has the Graphic in their kitchen.

It’s about time businesses came forward with the truth about the PNP even if the government won’t tell us.

I am not an apologist for Kevin Murphy and don’t set investment policy for the Province. That said, I have no problem with Kevin’s companies receiving PNP money.

He’s a businessman running several inter-related operations generally in tourism and food service. Foreign investment is what he and others like him need to stay alive in Canada’s tiniest market.

In a larger centre, an operations like Murphy’s could attract investment money that is almost impossible to find in PEI. Everyone knows banks are not a real source of money for business growth.

I also don’t care if he is connected to the government. Everyone in business on PEI has some political connections. That’s just the way it works for most businesses. Ignore that and watch your competition eat your lunch.

Hats off to Kevin Murphy.

The more people explain their participation in the PNP, the less fog there will be about what was right and what was wrong with the program.

It does seem unusual that he took so long to make his case. I have a feeling the PNP pot is going to boil over. The smart people want to be away from the heat when that happens.

Eastern Graphic

By Paul MacNeill paul@peicanada.com

Prominent Charlottetown businessman Kevin Murphy says to understand the true benefit he received from the controversial Provincial Nominee Program first requires an understanding of how his business is structured.

Provincial corporate records show that businesses many might associate with the Murphy name received 19 units under the immigrant investor program. That, however, is misleading, he says.

Some of those businesses he owns, such as East Side Marios. Some businesses he owns a portion of, such as Gahan Pub. And some, such as Sims Corner Steakhouse, he simply manages for others under the umbrella of the Murphy Group of Restaurants.

“The reality is we have a large company with a lot of companies for a lot of reasons. Some of them are for shareholders. Some of them are for tax reasons,” he said in an interview Tuesday. “There are probably eight different situations about how we do things.”

And that is part of the reason Mr Murphy believes his name is often associated with rumours about excessively benefiting from the PNP program.

“It’s nutty. It’s untrue and it can’t be substantiated. It’s not there. The facts are the facts.”

The companies in question are as follows:

1. 100369 PEI Inc., two units. It is owned by Murphy Investments and operates East Side Marios. Murphy Investments is Mr Murphy’s personal company.
2. 100415 PEI Inc., four units. Mr Murphy owns a 75 per cent share in the company that operates the Gahan House Brewery. The units were received under the former Conservative government.
3. Gahan Pub Inc., two units. Mr Murphy owns 75 per cent.
4. P. & W. Food Services, four units. Mr Murphy owns 60 per cent of the company that operates Pat and Willy’s, Fishbones, Jake’s and Off Broadway.
5. Mr Murphy also owns a percentage of K & M Home Heating that received a single unit under the former Conservative government.
6. Businesses that he manages include K&D Entertainment, which operates a pool hall. It received a single investment unit under the previous Conservative government and is owned by Chris Wright, a Murphy Group vice-president and Jeff Groom.
7. Castello’s Inc, a Charlottetown restaurant, received a single PNP unit. Records indicate the president and primary shareholder is Murphy group employee Charlene Morrison.
8. The Murphy Group also manages Sims Corner Steakhouse and ISE’s Sports Bar, each of which received two PNP investment units.

Each unit represents a $200,000 investment into an Island business by a potential immigrant. In return, the immigrant is fast-tracked for a Canadian visa. After all fees are taken off the top an average of $50,000 is actually invested in the business. The local company names the potential immigrant to its board of directors for a five-year period.

Collectively the 19 units represent an investment approaching $1 million. Mr Murphy says based on his ownership percentages his actual benefit equates to less than six units.

The PNP applications were made at separate times over a number of years and all monies were invested directly into the specific business. The businessman said he was very careful to follow all the rules and regulations, including supplying business ownership percentages, an issue that the Auditor General raised in his most recent report.

Prior to January 2008 rules governing the PNP program placed a limit of four investors per company, including wholly owned subsidiaries and affiliated companies. In his report earlier this year, the Auditor General pointed out the Ghiz government changed that rule without fully informing the public. Island Investment Development Inc., the crown corporation overseeing the program, did not update the policy manual located on its website.

“In January 2008, this policy was no longer enforced and the eligibility section of the website was updated with a statement that, where there are common shareholders between multiple businesses seeking access to the Program, IIDI reserves the right to limit access to further units if one purpose of the company structure is to access further units. This decision would be at the sole discretion of IIDI. However, the original detailed policy on restrictions on cumulative investment remained on the website,” the Auditor General wrote.

Mr Murphy says it is important to remember the benefit the PNP program brought to the Island.

“I thought the program, with its faults and there is some, has been a huge advantage to the tourism industry for a lot of property owners.” He points to his own businesses as an example.

“We’re in business just like anybody else. We have a lot of businesses that we run and we employ a lot of people. We are in different industries – manufacturing, hotels and restaurants, “ he said. “You just go around my businesses and see what was done to them in the last year or so.”