Premier Robert Ghiz hiding from the truth defending the bad and ugly PNP

There is a lot wrong with how it was run

If a legitimate business person, not including lawyers accountants and consultants, applied for and received PNP funds there is nothing wrong with that. If civil servants politicians, families and friends got PNP funds it was a breach of public trust.

One of Premier Ghiz favourite refrains about the PNP program is “It’s a great program.”  He is correct.

However the administration of the Provincial Nominee Program by his office PEI was the antithesis of a good government program.

What was good

The PNP was designed to provide regions in Canada outside of the industrialized core with capital to expand. All businesses need capital or business investment money. If you try to run a business on borrowed money you won’t survive. Capital builds a building and stocks it with equipment before the first widget is sold. Capital funds 5 years of research and development before a drug is approved or a software program ready for market.

In Canada, the big sources of capital are clustered in Quebec, Ontario, Alberta and British Columbia and generally in the most populated places. Capital is regional. There is a reasonable amount of capital around Montreal and Quebec City, but usually only for businesses in the area. Bay Street in Toronto likes to invest in companies it can touch or speculative mining and mineral companies.

Added to that is the reality that our US competitors are likely to have three to ten times the amount of capital investment in their businesses.

When Home Depot moves into town, it puts the smaller building supply companies at an immediate disadvantage since they don’t have the capital to compete. Customers like the bigger stores with more inventory and lower prices. Walmart is a perfect example of how capital beats under-capitalized businesses.

Regional businesses have some access to capital from Provincial programs, more from ACOA but a source like the PNP is worth utilizing.  In business, the rule is never leave investment money on the table. You will need it.

What is Bad about PNP

PNP money is akin to a Head Tax. The immigrant is paying a fee but they aren’t forced to invest and the old rules actually gave them equity and management responsibilities. Of course, if the investor had no experience in the particular business it might be an arranged marriage made in hell.

PNP money came with high costs to intermediaries, sometimes 25% of the money went to frees of agents, lawyers and accountants. However, that is only 50% higher than fees on raising money from investment bankers.

The program can dispense money to people who are not worthy. There is no use investing in a company that doesn’t exist – as in numbered companies on PEI – or that is going bankrupt. It wastes valuable capital.

What is Ugly about the PNP

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On PEI, and in other Provinces to a lesser extent, the Provincial Nominee Program became a cesspool of political corruption.

Greedy civil servants used the program to enrich themselves. We had examples of this under both the Conservative and Liberal governments.

Greedy politicians broke the public trust in their fiduciary role by obtaining PNP funds for themselves, their spouses,family and political friends. That is clearly wrong.

An investment program of $540 million where the agents, lawyers and accountants take 80% of the money is fraudulent, plain and simple. It is not a business arrangement but Tony Soprano would love to get involved. It looks like money laundering if nothing else.

Remember the Liberal Sponsorship Scandal? Very little of the actual wrong-doing was fraud. A few people went to jail for billing the government for work they didn’t do or for kicking money back to politicians.

The real scandal of Sponsorship Scandal was the breach of public trust, allegedly by Minister Gagliano and his cohorts, in subverting a good program of promoting nationalism in Quebec. They used the money to make themselves rich. Sound familiar?

The money had one purpose and their greed tempted them to use it for themselves – a breach of trust.

It cost the Liberals the government and continues to haunt them almost a decade later. Although it was never proved that Chretien was involved, he was tainted by it.

The cover-up of the PEI PNP scandal by Ghiz will likely be his undoing as well. Good Liberals who touched not a penny will be tarred with the same brush.

The interesting thing is how Olive Crane insists on an inquiry of the program from the start. She knows that it will also bring up Conservative dirty laundry but that pales beside the magnitude of the Liberal greed.