Use of PNP proceeds still a mystery

Teresa Wright
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PNP 101: All eyes on Mr. Younker

Four years have passed and government still has yet to determine whether companies that benefited from the Provincial Nominee Program spent their immigrant investments appropriately.

Island Investment Development Inc. (IIDI), the agency that ran the PNP, is still reviewing information from a ‘blind sample’ of 157 companies selected for follow-up on their Use of Proceeds Agreements, according to an email response provided to The Guardian Monday.

These agreements were signed by companies that applied to the PNP after October 2007. They accompanied a business plan and included a detailed explanation of how companies would spend the immigrant investments they received.

Although IIDI sent out its first letters in late 2009 reminding companies to file reports on these expenditures, the agency is still in the midst of following up with this blind sample of companies and determining whether their Use of Proceeds Agreements were honoured.

“IIDI is currently reviewing information received to date, and in a few cases has requested additional information from the investee company,” a communications officer with Innovation P.E.I. wrote in an email to The Guardian.

“Once the entire blind sample has had an opportunity to report and the assessment has been complete, IIDI findings will be published in its annual report. Releasing a partial summary of the sample taken would not be a true representation.”

The Use of Proceeds Agreement stated all proceeds from PNP units must be used for either expansion of business operations or the purchase of necessary capital assets, excluding motor vehicles. It required all recipient companies to file a report detailing how they spent their PNP investments and submit it to IIDI within two years.

Former Auditor General Colin Younker noted during his investigation into the PNP in 2009 there were no follow-up procedures in place to ensure these reports would be filed. He recommended IIDI develop a strategy to follow up on businesses that received PNP units and to include the results in its annual report. He also pointed out that the initial files subject to the Use of Proceeds Agreement would be due in the fall of 2009.

Younker also told the public accounts committee his office sought a legal opinion on the proceeds agreement which determined it is legally binding, and that IIDI can pursue companies that do not comply with heavy fines.

In its response to the auditor general, IIDI said it consulted its own legal counsel and determined it has the ability to follow up with only the companies who signed the Use of Proceeds Agreement.

“IIDI will be following up with those companies,” IIDI wrote to the AG's office in 2010.

The Guardian's attempts to secure an interview with someone from the department or IIDI on this issue were unsuccessful.

No indication was given on when IIDI will release the information it obtains from PNP recipient companies on the use of their immigrant investments.

A total of 1,354 companies benefited from P.E.I.'s Provincial Nominee Program. It offered permanent residency to immigrants who invested money into a local business and was aimed at boosting immigration to the province. The federal government shut down the immigrant investor stream of P.E.I.'s PNP in the fall of 2008 after officials were made aware P.E.I.'s nominees were not taking an active, day-to-day role in the companies in which they invested.

twright@theguardian.pe.ca

Twitter.com/GuardianTeresa

 

Organizations: Island Investment Development, The Guardian

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Recent comments

  • FLO
    November 26, 2012 - 09:30

    This whole thing is just a big scam from the day it started .Very sad to think our province has come to this .

  • Hilrey
    November 25, 2012 - 17:04

    The pnp program would of been a real asset to island business.To expand their business and to make some needed jobs.It should of been public information about this program.instead of just people who knew someone connected to the source.There would not be to many business on pei who this program would not of helped in the hard times we are seeing .But the greed of a bunch ruined it on everyone.When you have to make a numbered company in order to get money .You don't have to be very smart to know this is wrong .Those crooks who used their mothers names and other family names .Are they so stupid that they don't know if something comes out about those people were fraudulent.Did the mother get to see any of the money ? I would guess not. people who were not even connected to the company were letting their names be used.The numbered accounts were the worse ,because they were trying to hide them selves.The people who got the money honest ,and used it for what it was intended .I wish them all the best and good luck in your business. and those crooks who got it dishonest and used it for what it was not intended .We hope the tax man comes calling and they have a lot of sleepless nights.

  • Yesterday's news
    November 20, 2012 - 12:58

    This whole story is frankly getting pretty old, almost four years. The program didn't cost me as a tax payer a red cent and has done nothing but toss a bunch of new cash into the Island economy. I wish the program was still here to be honest. PEI needs immigration and we need every penny we can get if we are to maintain the tremendous standard of living we now have.

    • Either really naive or more likely a nervous PNP recipient
      November 20, 2012 - 15:09

      This story is anything but old. Rules were broken. That has been well established by the AG. Apparently no investigation was undertaken by IIDI as to how the money was used.People in positions of conflict of interest received multiple units. And if you think it isn't costing you money please wake up! There are all kinds of additional teaching/ teacher's aid positions required for all the kids that couldn't speak English that are paid for by the taxpayer, you and I unless you don't work or pay taxes. Those people also have access to social programs and healthcare, once again funded by the taxpayer. The adults also receive language training paid for by you guessed it, the taxpayer! And when the hundreds of immigrants that bought a citizenship but don't receive it because they are inelligible and they file a class action lawsuit, they will once again be reimbursed by non other than the taxpayer. So don't give me anymore crapola about what a wonderful benefit this program has been and how it didn't cost us anything!

    • Yikes
      November 20, 2012 - 16:07

      Holy crap, either you're a 12 year old girl with the attention span of a 12 year old boy, or you're nuts! Yesterday's news? This will be news worthy well past Monday, October 5, 2015. With all due respect to Teresa Wright, Islanders need a team of investigative journalists to expose this "news".

    • Dear YESTERDAY'S NEWS
      November 20, 2012 - 17:26

      Dear YESTERDAY'S NEWS, are you the same person who keeps saying that Plan B is yesterday's news? That the HST is yesterday's news? That the Holman Hotel is yesterday's news? The the dialysis cutback is yesterday's news? That the million dollar bootleg tourism contracts is yesterday's news? That the Cynthia King patronage scam is yesterday's news? Okay, hmmmm, my guess is that . . . . you're Robert Ghiz! Right? Come on, fess up. Am I right or what?

    • Theft is theft
      November 21, 2012 - 02:03

      The program was abused and so were the immigrants as they gave money but they did not get what they were supposed to in return. PNP was NOT meant for immigrants to give businesses money so they could come here. There was fraud and theft. A scandal known all over country. If there is no money in the holding bank account where the gov't was supposed to hold millions that the immigrants given but have not been accepted is not there, taxpayers will pay because the rich took the money; also they gave money and were supposed to get some back- again if not in bank acct and rich spent it, then taxpayers on hold for this. PEI has been blacklisted all over the country for stealing from immigrants. It is dishonest, fraud, theft. That should bother anyone.

  • PNP Recipient
    November 20, 2012 - 10:02

    Looking in the wrong place. Investigate 12 Legal and Accounting firms that orchestrated the PNP pyramid, and charged 15-45% of the investment amount in fees. That's where the connection to fraud and government corruption is.

    • Dan
      November 20, 2012 - 12:55

      PNP, if you are a recipient, perhaps you could enlighten us as to what responsibilities you owe to the investors. Did they in fact receive preferred shares in your company? What was the agreement for paying the money back? How much of the $200,000. "unit" did you actually end up getting? Did anyone demand "kickbacks"? Just wondering.

    • Yep, yep and yep.
      November 20, 2012 - 13:36

      Wonder if Teresa Wright et al is following up on this well known "rumour"? Until this is investigated, and the "transparency" Mr. Ghiz is known for espousing is proven or again discredited, the PNP will continue to haunt not only the two traditional parties, but PEI as a whole . . . or hole, depending how you look at it.

  • Marie
    November 20, 2012 - 09:11

    What a story of conflicts and contradictions....What is IIDI doing any reviews for? They weren't capable of handling this program honestly and yet the same incompetents will get to judge it's honesty!!! ROFL The first companies to receive the monies were to report by 2009 meaning they received their money in 2007. This is 2012!!!! Does that mean all the companies in the first blast DID NOT have to sign the Use of Proceeds Agreement so will never be questioned about the number of units they received or what they used the funds for? How convenient! A blind sampling??? Must've had a hard time with that...wouldn't want to pick a company that'll make you look more incompetent than you already are. Why don't you all just admit that this was such a big cash cow, your greedy brains took over and you lost all control and sense of your employment and STEP DOWN FROM YOUR JOB THAT YOU ARE/WERE INCAPABLE OF DOING!!!! I bet most of the companies that had to sign the "Agreement" were after 2008...by then the friends were already looked after. Can anyone spell "scam" and "corrupt"? And what's wrong with the RCMP? Are they so busy being security for highway construction they've forgotten their real job to Canadians??? If I pulled this immigration scam, I'd be picking soap off the shower room floor. The government does it, and it's swept under the rug. So ashamed of you ghiz....your silence says it all!!! Keep it up Teresa and Olive. Force the truth as quick as possible to avoid any more cover-ups, as we all know there are many in this story.

    • Amen
      November 20, 2012 - 11:01

      Amen. It is time for more investigations in to wrong doing, and more information should be put out there for the taxpayers to see.

  • Dan
    November 20, 2012 - 08:55

    From my reading of published PNP information it suggests that the immigrant investor received preferred shares in the amount of $200,000. for every unit invested, even though the company itself received only $50,000. Reviewing the list of companies that got at least one "unit", I would be surprised if half of them were worth anywhere close to $200,000. Will this mean that the immigrant investor can eventually claim complete ownership of these companies?

  • Sam
    November 20, 2012 - 08:34

    "The Use of Proceeds Agreement stated all proceeds from PNP units must be used for either expansion of business operations or the purchase of necessary capital assets, excluding motor vehicles.."......REALLY!.....So anyone who didn't spend it on legit business purposes committed fraud ? Is that what IIDI is sayin

  • IF
    November 20, 2012 - 08:00

    This government should put all they have on the table to the test and call an election to see if the people are behind them and want them to continue as government, because they sure as hell didn't ante up before the last election.

  • JAXY
    November 20, 2012 - 07:48

    So these guys will not even report on a 'sample' because so few PNP payments are credible. So the question remains if we will ever see the really incredibe ones, the ones that are very deeply hidden, involving the premier and other extremley well protected ones. These will never make it into any 'sample' because they are not on any ' list', public or otherwise. There is now as of today a second letter to the editor indicating a business named on the publicly released PNP 'list' should not be on that ' list". The' list' itself is now not credible. If names are on there that should not be there then just as readily there are names omitted that should be listed. What is the good of taking a 'sample' if the 'list' is not the proper one. This is assuming that at some point the ' sample' is assessed as per the regulations. Four years is not quite enough. Obviously. Everyt file should be assessed throug a public inquiry. This is required because of the suspicion that the government has been up around the whole question of PNP.

  • John W.A.Curtis
    November 20, 2012 - 07:31

    I see companies that received PNP units and have expanded, excellent. I have seen companies that have received PNP units and closed boooo.

    • Sam
      November 20, 2012 - 08:30

      ....and companies who recieved money that never opened. Existed on paper only to tap the free PnP money

  • Hold Up To Scrutiny
    November 20, 2012 - 07:26

    I trust that the lawyers, accountants, professional consultants etc that have been and continue to be called upon by our government for PNP related matters are all at arm's length. They should obviously be avoiding any potential bias. Very good work, Teresa.

    • don't think so
      November 20, 2012 - 10:28

      I don't think there are any lawyers or accountants at arms length on PEI - look at the list of party donations. And we couldn't find a single lawyer on the Island to help us in the fight against Plan B - what does that tell you?

  • What gave birth to PNP gave birth to Plan B
    November 20, 2012 - 07:21

    Lest we forget, this is the same value system that gave birth to Plan B - millions of public dollars fed to a few local companies. And this government still professes that Islanders are stupid enough to believe it was for reasons of safety? How stupid, idiotic really, does Vessey and Ghiz think we are! The PNP is barely invisible - but the road remains a physical monument to political corruption. This is the fundamental reason for continued resistance to Plan B, if we forget its significance they'll keep on doing it over and over again.

  • Railbird
    November 20, 2012 - 06:44

    Mr. Premier ,please tell me how Easter stables qualified for the pnp when the rest of the stables couldn't access these monies.,as they didn't qualify. I know you have an answer for this simply question. See you at the races ohl.

  • Adolpus
    November 20, 2012 - 06:30

    Never mind the 'sample' testing. Let's have all companies show what they did with their "units". This program was never intended to be a cash cow for those 'on the inside'. I see where the Bike Shop received some units. Hmmm..... haven't shopped there for a while. Companies who did actually use the funds properly or those who were named but never received any (ie Callbecks) should call the media to clear their names. Right now you are all being tarred with the same brush. - and not to say that you may deserve it. Let's have companies step up to the plate. Seeing your company on that list made you look as good as owing back taxes.

    • Dan
      November 20, 2012 - 10:23

      Adolpus, I believe that Billy Callbeck pointed out that the Callbeck business was sold, along with the name. So it would seem that the business did get funds, but the Callbeck family no longer had any interest in the business and thus did not benefit from or receive any PNP funds.

  • Lbh
    November 20, 2012 - 06:27

    The pnp is another example of a few ruining it for the many. Greed and secrecy has tarnished many companies and cast a shadow of doubt on many others. But I laugh because most lemming like voters on pei will still vote based on family tradition and not think for themselves. How many times do we hear. Oh he would make a great politician. Yet for the most part we consider politicians to be liars and theifs. So maybe we should vote for the anti-politician. Voting for the typical politician has got is in this mess. Why expect any different results by continuing to repeat the same process every four years.

  • Jean Paul
    November 20, 2012 - 05:40

    I participated in the recruitment process for a PNP officer in 2008. It appeared that. IIBI was looking for "Controllable" individuals at the time. Now we know why . I even took my complaint to Richard Brown and the Premier s office.

  • waste of time
    November 20, 2012 - 00:23

    Having IIDI perform the review is like asking a thief to check his friend's house for stolen goods and then believing him when he says he can't find anything. The RCMP and CRA should be straight in there, now they know the names. Those who have abided by the rules will have nothing to fear and should also be pushing for this in order to clear their names of any attached stigma.

  • don
    November 19, 2012 - 22:24

    FOLLOWER OF PNP SCANDAL. it is simple it appears that the RCMP on PEI is controlled by dizzy and they do as they are told look at plan b the hours they spent there and not looking after our roads. so who is in control of the RCMP the tax payer or the liberal government of PEI?

  • johnny
    November 19, 2012 - 22:06

    The guy across the street from me who does ''consulting'' bought a fancy new pickup truck in 2009. I see where he received at least 1, if not more, PNP units. Oh Canada Revenue Agency must be wringing their hands in anticipation of the next few months...

  • Islandwoman
    November 19, 2012 - 21:33

    What does this mean " IIDI said it consulted its own legal counsel and determined it has the ability to follow up with only the companies who signed the Use of Proceeds Agreement?" Is IIDI saying PNP money was provided to companies that didn't sign the Use of Proceeds Agreement? Why would that be?

    • names please
      November 19, 2012 - 22:10

      Was this ''legal counsel'' an in-house government lawyer or was it a private law firm that is friendly to the party in power? What about the accounting firms and law firms that have made a fair percentage off the PNP? That should be public knowledge - names and amounts paid. Every red cent.

  • Red bird
    November 19, 2012 - 21:01

    I wonder what investment dandy duds made,they have been closed for years?

  • Follower of PNP Scandal
    November 19, 2012 - 20:26

    Great work Teresa Wright, keep probing you are on the right track, this is the second time we have seen an article by you on this PNP Scandal. The RCMP should follow your lead if they have not to date, I am hoping when their Investigation is released the tone is the same as yours Teresa. Again Olive Crane should keep pushing for a Public Inquiry as well for the results to date of the RCMP Investigation. For all you lawyers and accountants, this is not going away, all of you who played this game will eventually be exposed and rightfully so. I have read blogs stating the Immogrants should get their own lawyers and file a class action lawsuit against the Liberal Government including all the law firms and accounting firms who had a hand in this total fraud and mismanagement of this program from the start. Corruption at the highest level. Someday you all will be dealt exactly what you deserve, hopefully soon, since its been almost five years of constant denial and evasive answers by this Premier Ghiz leadership. This is Immigrants money divided among many Politics, lawyers and accountants fraudulently, not government money, why in hell does it take years for the RCMP to do such a simple probe?

  • don
    November 19, 2012 - 19:55

    how many people put the money in bank accounts under a fake name or under there wives names so it can not be touched. i know a few places that are now selling now that the names are out i wonder why?

  • Joe Blow
    November 19, 2012 - 19:34

    Well it wouldn't be a mystery if the government would stop hiding the truth!!! They have done everything in their power to prevent the truth from coming out, so its very obvious they have something to hide. All they have to do is admit to stealing the money, giving money to friends and families and false businesses and admit to giving Liberal party supporters several units of PNP money and allow the public to investigate EVERYTHING about the PNP program and we'll have the truth. If they had nothing to hide, they would have allowed a full investigation long ago!! Liars and crooks with power are very good at hiding and protecting incriminating evidence!