The list of failures is growing for the Williams administration give-aways of public money to businesses.
In late 2008, Progress Software received $325,000 in an interest free loan from the Williams administration. The company was supposed to add 10 new software engineering positions to the company’s operation in St. John’s.
The company closed its St. John’s office less than 18 months later without adding any new employees. NTV and the Telegram reported the story this month but neither version is available online.
According to the Telegram, the provincial government is looking for the money back. The company has agreed to repay it but to date there’s no sign of any cash.
The story is all too familiar.
In May, the Telegram reported that Kodiak received an $8.0 million interest free loan of taxpayer cash from the same government fund – the Business Attraction Fund - to add 75 new positions at its boot-making factory in Harbour Grace. Instead, the company slashed its workforce.
There’s no word on whether the provincial government has sought repayment of any of that money at all.
Bond Papers readers will recall SAC Manufacturing. That company went belly up a mere four months after it received a total of $675,000 in taxpayer cash from the provincial government.
According to the province’s auditor general, the money would likely have to be written off. In late 2009, though, the provincial government’s audited financial statements still showed the shares in SAC manufacturing and in another failed company on its books as assets. That fourth company – Consilient – figured prominently in an auditor general’s report criticising the way the Williams administration hands out business development cash.
Fortunately for taxpayers, sometimes these deals fall apart before the company gets the cash.Last month, taxpayers watched - likely with jaws agape - as natural resources minister Kathy Dunderdale entertained a proposal from a bankrupt company seeking $52 million to take over the defunct paper mill at Grand Falls-Windsor. Neither Dunderdale nor her officials seemed to know what was going on until the story broke about the bankruptcy and the company withdrew its offer.
The litany of failure stands in stark contrast to the 1995 EDGE program. At a cost to date of $17 million, the program has produced between 1500 and 1600 jobs.
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