Nunavut lender’s deficit continues, does not name clients
Territory’s business lender of last resort increases portfolio to 57 loans
The Government of Nunavut’s arms-length lending agency, the Nunavut Business Credit Corp., expanded its lending portfolio and has cut down its operating deficit, but it is still not identifying the businesses that receive loans, the lender’s 2016-17 annual report reveals.
That report, tabled in the Nunavut Legislative Assembly Sept. 14, follows calls from legislative standing committees and the territory’s information and privacy commissioner for improved transparency from the NBCC on who receives public loans from the agency.
The NBCC loan portfolio increased to more than $24 million by the end of March this year, spread across 57 loans, which is up from $21 million reported at the end of the 2015-16 fiscal year.
While the number of clients grew to 51, up from 49, the number of “performing” clients—or clients living up to the terms of their loan contracts—decreased to 39 from 40.
That means 12 of the NBCC’s clients are currently not meeting the terms of their repayment agreements, accounting for $4.7 million of the total lending portfolio.
The NBCC report explained that some of those clients are long-standing, and predate the creation of the territory in 1999.
The agency reported an operating deficit of about $1.2 million, an improvement over the $1.6 million deficit incurred during the 2015-2016 fiscal year.
The NBCC said it has addressed concerns about the “continued viability of some of its clients” from last year, but will need to remain vigilant in monitoring their financial performance.
The agency’s CEO, Peter Ma, said he is “cautiously optimistic” about the growth of Nunavut’s economy, which will, in turn, help NBCC clients whom he said were facing challenges from a “general downtown” in the economy.
That will come from new sectors such as technology, alternative energy, research and tourism, the NBCC report predicted.
Nunavut’s construction industry, which accounts for 27 per cent of the NBCC’s lending portfolio—almost $7 million—will also likely improve in specific communities as more infrastructure projects are announced, the report said.
Missing again from the report is any detail on the specific companies or individuals benefitting from NBCC loans.
Nunavut’s Standing Committee on Oversight of Government Operations and Public Accounts said that was problematic in a 2015 review of the agency, especially because the NBCC’s application forms specifically notify applicants that their identity can be released to the public.
The standing committee report also cited confirmation from Nunavut’s privacy commissioner, who reiterated again in 2016 that there was nothing stopping the NBCC from releasing that data.
That same year, the NBCC took to court one of its clients, David Wiseman, who was declared bankrupt after he forfeited on a nearly $1 million NBCC loan granted in 2012.
Wiseman is currently before the courts on separate charges of fraud, although those charges have yet to be proven.
The minister responsible for the NBCC, Monica Ell-Kanayak, told Nunavut’s legislative assembly in June that future reports from the agency “would be structured differently” but did not say if the agency would release individual client information.
As a publicly owned agency, the NBCC acts as a “lender of last resort” for small or medium-sized enterprises to apply for lines of credit.
In 2007, the Auditor General of Canada issued a scathing report on the NBCC, highlighting financial irregularities and mismanagement, which in turned spurred an overhaul of the NBCC and a relocation of its office from Cape Dorset to Iqaluit.