Liberals defeat motion calling for audit of Homburg deals

Ryan Ross
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Opposition critic says Islanders need to know if tax dollars put at risk

Opposition Leader Olive Crane is flanked by Progressive Conservative MLAs Hal Perry, left, and James Alyward as they prepare to enter the Provincial Legislature in Charlottetown in this Guardian file photo.

The provincial government won’t be calling for an audit of its dealings with any companies associated with businessman Richard Homburg after defeating a motion from the Opposition Thursday.

Opposition innovation critic Hal Perry brought forward the motion and said there are many unanswered questions about the province’s dealings with Homburg and his related companies.

“This government uses taxpayers’ dollars as if it was their own,” he said.

The motion came several weeks after Homburg Invest Inc. announced it was shutting down the Holman Grand hotel because of what it said were unsustainable losses.

Homburg Invest Inc., which is a publicly traded company, has been under creditor protection for more than a year and owes the province about $16 million it borrowed to build the hotel.

Earlier this week, Premier Robert Ghiz said government was close to announcing a buyer for the hotel.

The provincial government also has outstanding loans for other properties owned by different companies that are or have been associated with Richard Homburg.

In presenting the motion, Perry said taxpayers need the auditor general to find out if tax dollars have been put at risk.

“Taxpayers need details,” he said.

Perry said the auditor general needs to find out if the government will be responsible for any of the hotel’s financial losses in the future.

“Is it the responsibility of the province if the hotel doesn’t meet its financial obligations on a monthly basis?” he said.

Islanders need the confidence of knowing the auditor general has looked into the issue, Perry said.

“They need an honest, impartial assessment of what has taken place without the political spin.”

The Opposition has suggested the hotel’s value has dropped and the sale price won’t be enough to cover the province’s loan.

In his response, Innovation Minister Allen Roach questioned where the Opposition was getting the idea the hotel would be sold at a bargain basement price.

“I just don’t know where that comes from,” he said.

Roach criticized the opposition for what he said was attacking and portraying the local business sector in a negative light.

“This is extremely unfortunate when we are at a critical time of sensitive negotiations on the sale of this property,” he said.

When it came time for the vote, only Opposition MLAs stood in favour of the motion and it was defeated.

rross@theguardian.pe.ca

Organizations: Homburg Invest Inc., Holman Grand hotel

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Recent comments

  • don
    November 23, 2012 - 13:50

    dizzy you lied. you said you would have an open government nothing to hide not like the binn's government. lets see. PNP, humburg,should we go on?

  • Not Fooled by Mudslinging
    November 23, 2012 - 12:25

    I sure hope the honorable minister was wearing his rubber boots while he was mucking out that stall! Since when is parliamentary privelige a defense from Slander and Libel ( that means one in a recorded fashion one not( verbal) To drag any business man's name into a debate and hint about improper dealings without any basis in fact is just wrong. Not to mention wasting work time on such drivel. Islanders are not so easily fooled. A company that is publicly traded is owned by shareholders. That hotel is owned by a company not a person and the management employees of the company make the decisions. not the guy who's name is on the building. Come on Hal that's economics 101

  • homburg university
    November 23, 2012 - 12:02

    I'd love for the Guardian or CBC or the Eastern Graphic to issue FOIPP requests relating to Homburg. If they get denied, go to the courts, just like with PNP. This is public taxpayers money that Ghiz and Brown and Roach and their incompetent staff are wasting. We the public demand to know every single detail. I'd also like to know about Homburg University, the Homburg Tunnel, the Homburg Theatre, as well as Dyne Holdings, the Homburg Financial Building, the Holman Grand Hotel and other such dealings. Every single word of every single email and cabinet minutes, etc. This should all be publicly available and searchable.

    • sure lets get all successful people
      November 23, 2012 - 13:15

      Lets not stop there lets go after all the successful businesspeople on the island! Ask the Murphy's about all their intricate business dealings, or the Bank's, Schurmans, linkletters, Mckinsys, heck lets reinact the french revolution. come on ! Have you asked anybody from any of these businesses what they are about.....Thought not.

    • islandwoman
      November 23, 2012 - 16:28

      "sure lets get all successful people" what on earth are you talking about? The french revolution? And what on earth does Homburg have to do with successful business people on the island? You're obviously on a computer - do some research. Homburg got millions and millions of islanders' taxpayer dollars. The people who paid that tax money deserve to know what happened to it.

    • homburg university
      November 23, 2012 - 17:32

      @ SURE LETS .... Obviously you don't know the definition of a successful person. Richard Homburg came to Canada from the Netherlands in the 1970s and built a real estate business that ended up being a complete house of cards. He bought former DND land in north end of Dartmouth and built a bunch of cheaply constructed apartment buildings which are known today as Highfield Park - the murder and drug and crime capital of the Halifax Regional Municipality. Building on this success, he bought other commercial and residential property in Halifax and other cities in Canada and the Netherlands. He came to PEI back in the mid-1990s when he bought Dyne Holdings from Mike Arnold and other investors - in the early 1990s they had used Immigrant Investor Fund money (pre-cursor to PNP) to buy the Confederation Court Mall and build the Royal Trust Tower (today BDC Place) and a connecting pedway. Dyne Holdings was created to own all of those properties and then Richard swooped in with a sweetheart deal. Then Richard's empire started to crumble when the world economy went into a tailspin in 2008. His financing costs went through the roof and his magic touch started to falter. He kept up great appearances through until 2011 when the chickens came home to roost and the minority shareholders ousted him and split up the little empire which is worth a fraction of what it once was. That's the real Homburg. No success story there, just a rusty nail sticking up that was waiting to be bent over and discarded.

  • Ed Gallant
    November 23, 2012 - 11:57

    In his response, Innovation Minister Allen Roach questioned where the Opposition was getting the idea the hotel would be sold at a bargain basement price. “I just don’t know where that comes from,” he said.....That's a pretty easy one to answer. All he has to do is to go on record to say that there are sufficent funds in any sale to satisfy the debt fully. Don't evade all the time, answer Hal's question. I'm sure Islanders would feel better knowing that their monies are fully protected.

  • Joe Blow
    November 23, 2012 - 11:52

    No surprise here....the Liberals are always blocking democracy to cover up their shady business deals!!! The taxpayers deserve to know how their tax dollars are being spent, especially when the government continues to cut services that those tax dollars are meant to pay for. The Liberals are using tax dollars for the wrong things and they are wasting millions of dollars doing it. The taxpaying public has a right to know how each and every dollar they pay in taxes, is being spent. If the government cannot give the taxpayers that luxury....then we shouldn't be forced to pay taxes anymore!!! I have no problem paying taxes....but I want my money to go towards the services our tax dollars are meant for.

  • Wayne MacKinnon
    November 23, 2012 - 11:48

    What are the Liberals attempting to hide now? An independent audit now would allow a much clearer picture of what occurred in this situation and hopefully prevent this financial fiasco from happening again in the future.

  • alfredd
    November 23, 2012 - 11:38

    what is going on, - no comments???? Can't be--- glitz??? Get going----------

  • YINTY
    November 23, 2012 - 10:05

    Maybe we can learn all about it at Homburg University?

  • Roach pull your head out and breath
    November 23, 2012 - 10:02

    Do you have amnesia Roach? The hotel was appraised at $9 million and your commander has us in for $16 million. I'm no rocket scientist but I see PEI tax payers losing again.

  • RESPONSIBLE GOVERNMENT
    November 23, 2012 - 10:02

    Responsible government is a conception of a system of government that embodies the principle of parliamentary accountability. Accountability!

  • Gman
    November 23, 2012 - 10:01

    Doesn't the auditor general have the power to go to court and get a court order to force the government to open there books? Maybe Judge Cheverie can side on this problem like he did with PNP? Isn't that his job? To find out where the public's money is going...

  • trevor
    November 23, 2012 - 09:15

    fire in the towel Olive Crane you will never stand for our goverment again! now its time to move on to something diferent. you are making a complete fool of your goverment and your self. STOP NOW AND MOVE ON!!!!!! giz is helping all and wait till trudeu comes in and stops all this foolishness good job robert

  • TAXPAYER
    November 23, 2012 - 08:29

    The provincial government won’t be calling for an audit of its dealings with any companies associated with businessman Richard Homburg after defeating a motion from the Opposition Thursday. This Liberal government has to be fired. Now.