Small business owners on P.E.I., who got PNP money are crying the blues. Readers say this really is a mega sized scandal.
Teresa Wright, Charlottetown Guardian (Twitter official photo)
By TERESA WRIGHT, The Guardian
Small business owners on P.E.I., who received investments through the Provincial Nominee Program, are upset their financial benefits from the program are being erroneously reported, says the president of the P.E.I. Business Directory.
Peter Trainor, who heads up this business association, said many of his 850 members have received money from the PNP, but not nearly as much as has been reported by government and media.
Some received as little as $10,000, he said.
The Provincial Nominee Program is a federal-provincial program in which potential immigrants invest in a local business in return for a Canadian visa.
The immigrant purchases $200,000 worth of shares in a local company. Of that total, $100,000 is taken by the province and put in trust to be paid back after a period of time — usually five years. Another $50,000 goes toward lawyers and broker fees. The remaining $50,000 goes into a local business.
But Trainor says some business owners who legitimately received money through this program actually received only $10,000 or $15,000 after all legal and accounting fees were paid.
“It’s only a fraction of the investment that actually gets to the business community,’’ he said, adding many small business owners are dismayed at the perception a lot of money was injected into small businesses via the program.
A large part of that impression is being created by the province, Trainor said.
Innovation Minister Richard Brown, whose department oversees the PNP, has been publicly defending the program against public concerns both in the legislature and at public accounts committee meetings.
“Monies from foreign investors (were put) into private companies in this Island to the tune of $200 million,’’ Brown said during legislature question period on Dec. 3.
“Since the program started in 2001, millions of dollars have been invested in 1,423 companies — 1,423 small businesses out there have accessed this program,’’ Brown said during the last public accounts meeting.
Trainor says it was the lawyers and accountants that brokered the investments between the immigrants and the businesses that benefited most from the PNP.
“Why does it cost $50,000 for a lawyer to do this work? We’re not talking about a major transaction here, it’s basically setting up a simple trust fund. I can go down and get that done at the bank for free.’’
He believes government should have policed these administration fees more thoroughly, especially considering additional legal and accounting fees were deducted from the businesses’ shares. That’s why some businesses got only $10,000.
“Why would the lawyers or the accountants get more money than the businesses?’’ Trainor asked. “It sounds shady.’’
However, local businesses owners are wary of coming forward with these concerns.
Many fear they will be viewed as having done something wrong by their mere involvement in the PNP.
The program has been mired in controversy for months. Bonuses paid to employees who processed PNP applications and the large volume of applications processed in the four months before the program ended have caused some concern.
Also, the fact a number of MLAs and the former deputy minister in charge of the program have admitted to accessing PNP money has come under scrutiny.
The provincial auditor general is investigating the PNP, as is the public accounts committee, and the RCMP is looking into an allegation of fraud by a business owner’s involvement in the program.
A total of 1,877 PNP applications were processed between May and Sept. 2., more than double the total amount processed during all of 2007.
Guardian reader comments:
speedy from PE writes: WOW!!!!
harry gallant from west prince, pei writes: At last we are getting somewhere. I always knew this was basically a good news story with the only problem being the price that was paid to special consultants like Capital Investments International. They are a company that have been around since the Pat Binns years and we all know who they are and how much they’ve skimmed from this program. The real Liberal problem here was trying to hard for too many small Island companies. This allowed for some sloppy administration but they were committed to helping as many small businesses as possible.
Robert ghiz had one heck of a situation on his hands when they came o power. Fishing and farming and tourism were all heading south. The budget was tanking and education, healthcare and transportation in all but ruin. In 18 months he has tackled these problems and we are beginning to see some progress. Beef is doing a lot better. Potatoes are in great shape. the fishery is holding it’s own, in very difficult market times, and tourism is trying new things and will get better. All ministers were new and some will be replaced. I am very impressed with the job Robert Ghiz is doing and things will really begin to move forward in the second half of his first term.
Elizabeth from PEI writes: Media…please keeping digging and giving us information about this program. We need information that has not been spun by the government.
Stephen Pate from Charlottetown, PE writes: The businesses organization should publish the facts and end all the speculation. Facts include gross amount of investment, all the fees paid and to whom and their net. For overpaid fees they should first asker the professionals for a refund. Failing that apply for refunds to the Institute of Chartered Accounts, Society of Management Accountants, Certified General Accountants Association and the PEI Law Society. All of those professional bodies have a code of ethics that prohibits charging what the market can bear. Fees are expected to be reasonable and within the range in the Atlantic region if not PEI.
I would suggest each business owner provide a copy of their grant papers to the RCMP and lay charges where applicable.
The PNP scandal is unraveling at the seams which I predicted months ago. Too much money and too many people involved for it to remain a secret.
JD from PE writes: Speedy……I agree WOW!!!!!This really is a mega sized scandal.
So who were the lawyers and accountants who got all this money?
Were all the Lawyers and Accountants in the trough? Or Just certain Liberal Lawyers.
What about the $100 Grand the Ghiz Government kept.
Precedent from PE writes: If someone doesnt fix this, and quick, the PNP immigrants are going to get alot more back than just their good faith deposit. There is precedence in Halifax where a group of immigrants were able to convert their preferred shares into common shares thus giving the investor their rightful ownership stakes in the company and the all important voting rights and fought the outrages fees charged by the Professionals, and I use that term lightly, more like scavengers. Hope you are ready for a big refund ( Tax payers)!!!
Head shaker from pe writes: How may immigrant held up their end and can show they stayed for a year and learned english?
Watcher from PEI writes: The underlying story here is the accounting firms and lawyers who were paid millions of dollars for little or no work. In fact clerks and administrators within each firm did the majority of work which for the most part was clerical in nature and repetitive. Some lawyers and accounting firms were actually calling clients and offering money just so they could get their share of the pie. I know because it was offered to me. Same old story. The owners/shareholders in the accounting and law firms who are also well known political bag men and assorted hacks for both parties offered money to their clients and friends while raking in huge amounts of cash. What a stinking mess this is and once again an embarrasment to both parties.
Follow the bucks from Charlottetown, PEI writes: Yeah, the small businesses didn’t get the real money. Someone else did.
You Do the Math from PEI writes: Well, FIVE HUNDRED MILLION is one heck of a lot of money. If it was supposed to be distributed to the Island economy, I am sure it would be obvious. Divide ONE HUNDRED and THIRTY THOUSAND ( Island population) into all the millions, what do you get?
facts right from PEI writes: The facts arent right here…. The lawyers werent the ones getting $50,000. It is the investment agents who found the investors, acted on their behalf, etc. Lawyers did not get that much.I would be VERY surprised if someone actually only got $10,000.
I do think that the biggest crooks here are these investment agents, they are the ones taking huge unjustifiable fees in my opinion.
lame brain doodling from charlottetown, pei writes: I don’t recall reading about these particular details before. This investment program just plain doesn’t make any sense. Is it something all the provinces are doing and, if so, are they doing it in the same way as PEI ? What kind of investment return is anyone going to get for a mere ten thou ? All I read before was the province kept twenty five thou as a good faith deposit in return for one year as an island resident. Plus the twenty they kept for the English Language thing. And those two amounts were not included in the initial two hundred thou. And now a hundred thou is being kept for five years. This wasn’t a program for the benefit of the investers or the small businesses. No way, no how can that be claimed. Certainly not a program to benefit island taxpayers either. Nope. Also, I assume, not being a lawyer, that the small amounts being invested into business are taxable as well So that would cut it down a bit more. Double WOW
Catherine A from Summerside, PEI writes: I remember listening to a business owner tell us about the expereince they had with recieving these dollars. Yes he explained how the amount he recieved was significantly lower than the unit but what perplexed me more was the explanation that these immigrants sign a paper stating that when they come to the country they will sign their shares back over. Is this a legitimate investment? Or an expensive ticket into the country?? I would love to see some research into how the island business community really benefitted. I would love to hear a story from start to finish .. One word comes to mind Deception
john from pei writes: This is is all about nothing .There we have the director of a busniess organization now complaining that some of it’s members are complaining that they only got $10000.00 of this pnp program.I don t know what is reequired to be a member of this organization but the last time I looked in my bank account I didn t have this amount in it and if my memory is correct this money was tax free. So will all these people who are sticking there hand out for more money from this pnp remember that it is not good to be greedy and they should be gratful that this government has provided a lot of businesses with a chance to grow but there are a lot of other businesses who could also benifit from some of this tax free lotterey
Keep It Up from PEI writes: I hope the media keeps after this one. They’ve been doing a great job so far.
Such a shame that this kind of money went into dirty pockets when it could have benefited the Island in such a big way.
I hope small business people do come forward. I don’t think anyone blames them for this scam.
You Got To Be Kidding from Harry, P.E.I writes: ONE TERM FOR MR. GIZZ…..Period
JD from PE writes: It is now time for a public inquiry into the workings and the dealings of this program.Plus the RCMP need to be brought in if nothing else to examine and investigate some of the items stated above.
This is a Mega Sized Scandal that is rocking PEI and making us all look like a bunch of backwater hicks in the rest of Canada and I would imagine in China as well.
The Ghiz Government has tainted every Islander and made all of us look bad.
It is TIME for the dirty laundry to be made public and for an Open and Transparent process like Ghiz promised in the election.
A lesson learned from PE writes: Well there you have it, The business owners blaming the lawyers for getting the most money , the lawyers blaming the Government. It appears that they are ALL to blame for greed and taking advantage of people that want to improve their lives. Like a bunch of hogs at a feeding trough , fighting to see who is going to get the most. Makes you ashamed to be an Islander doesn’t it.
Leave a Reply