TPC Program Part II - Slight of Hand? (en francais)

TPC Part I

If there's ever a program that the Auditor General needs to dig into, this is the one. I think this has the potential to make Adscam look like chump change.

When you look at the Terms and Conditions, specifically Repayment, there are enough loopholes to drive a truck through.

Let me give you a 'for example'.

ABC corporation is developing a speciality widget. While their widget is a leading edge design, the market for it is very small. Along comes TPC with a helping hand. A contract is worked out between TPC and ABC Corp to use goverment funds to develop their project. Using a fixed-date repayment plan, ABC Corp is to begin paying back the government once they have delivered 25 units of their new widget.

Problem for the taxpayers is, the market for the widget is at best 20 units. The chances of production reaching 25 units is slim to none.

Ahh you say, then why would they set the repayment trigger so high? That's certainly the critical question and explains why only a complete review by the Auditor General can resolve most of the questions with this program.

I'd be interested to see the ridings that this money has been 'invested' in and a comprehensive list of companies receiving these funds. A look at some of these companies' Board of Directors would probably be a very revealing exercise, along with a cross reference to the Elections Canada donations database.

That's the problem with programs like this, when they are run behind the veil of secrecy. Questions such as I have listed above may be valid or totally off the mark, but we have no way of knowing. The Liberals say - "trust us". My parents used to say, "you have to earn that trust". When taxpayer funds to the tune of $2.5 billion dollars has been dispersed with little or no repayment, my BS metre starts warbling on high.

TPC Terms and Conditions - April 2001

9.REPAYMENT

Repayments of contributions will be set by the Minister in accordance with the Treasury Board Policy on Transfer Payments. TPC will manage the contributions so that all repayments and recoveries are recycled into TPC, allowing potential for future growth.

TPC contributions are generally conditionally repayable, including potential for sharing in upside returns. Repayment is not limited to the face amount of the contribution. In view of the risks inherent in projects of a high-technology nature, it is recognized that not all projects will succeed, and consequently, that not all contributions will be fully repaid.

A variety of repayment instruments will be considered, including: royalties, fixed repayments, warrants on the recipient’s equity, and/or a combination of the different instruments. Hence, repayment terms are negotiated on a case-by-case basis, and are based on an assessment of the nature and risk of the project, need of the applicant and benefits to Canada.

Repayments will generally be triggered by a fixed date. Due to the variety of the repayment instruments, this date is also established on a case-by-case basis. Examples include: a fixed date following the completion of the statement of work or a predetermined date when the technology is expected to be inserted into the company’s operations.

TPC will monitor all provisions of the contribution agreements including those relevant to repayments. All contribution agreements will include provisions requiring recipients to submit annual information updates on projected and actual repayments to the Minister together with explanations of significant changes, if any.

As part of its repayment administration process, TPC will ensure interest is charged on overdue repayments, in accordance with the Interest and Administrative Charges Regulations.

An interesting thing with this program:

13. DURATION AND RENEWAL
These terms and conditions will come into effect on the date of approval by Treasury Board and will remain in effect until December 31, 2005 or otherwise revised or rescinded by the authority of the Treasury Board.

Prior to submitting these terms and conditions for renewal by December 31, 2005 an evaluation will be undertaken to assess the effectiveness of the program.

The evaluation noted above was the one I looked at in part one of this post. The one that found that nothing was wrong with the program that a couple of minor adjustments couldn't fix. Industry Minister David Emerson has promised some program revisions to fix things. But, now we're back to that "trust us" problem. What worries me is that this will all be happening around the same time as the Gomery report is due. It's very possible that any future announcements on this will be time to fly well below the radar of official Ottawa and the MSM. It's like announcing something on Friday afternoon before Parliament breaks for the Christmas Holidays. Most people are in such a hurry to get home, they don't even notice.

To let this one slip away without thorough scrutiny would be an affront to the average taxypayer struggling to get ahead.

BTW - still looking for a good name for this one. I'm leaning towards Robogate unless I can get a better one. Has a ring to it.