Minister says news story on Infotel Call Centre leaves false impression

Infotel Publications Inc. has not received provincial incentives to date for a call centre it operates in St. John�s, contrary to the impression given by a news story today (April 27), says Kelvin Parsons, Minister of Industry, Trade and Rural Development.

Responding to a story and headline ("Call centre received provincial incentives...") in today�s Telegram, Minister Parsons said that Infotel has not received any benefits under his department�s Economic Diversification and Growth Enterprises program, commonly known as EDGE, and will not receive any until its contractual obligations with the province are met.

"EDGE is a performance-based program designed to encourage new business investment and create new jobs in the province. There are no up-front grants. Financial benefits available through the EDGE program only flow to a company after it creates new jobs and provides an appropriate report to government on its success in this regard -- a report that must be verified by an external independent auditor. This does not normally happen until a year or so after a company begins its operations," Minister Parsons said.

Minister Parsons said that in addition to complying with these reporting requirements, the department�s formal EDGE contract with Infotel requires the company to comply with all statutes and regulations governing a business operation in the province, including those of the Corporations Act, before any financial benefits flow to the company.

"I want to make it very clear that Infotel will not receive any financial benefits under EDGE unless the company complies with its EDGE contract with my department. The appropriate checks and balances are in place to ensure the taxpayers� interests are protected," Minister Parsons said.

Infotel Publications Inc. was granted EDGE status in May 2000 after meeting eligibility requirements of the EDGE legislation, and after the department contracted an internationally recognized independent financial audit firm to conduct an extensive background check on the company. The company did not open its call centre business in St. John�s until June 2001. The company was not provided with any other provincial incentives.

"None of the background checks on Infotel produced anything that would cause us concern," Minister Parsons said. "The background checks included a detailed analysis of the company�s financial information as well as credit and other background checks on the company�s principals and affiliated companies."

Minister Parsons said that Infotel has created upwards of 60 jobs since it opened for business in St. John�s less than a year ago � jobs that did not exist before � and the company projects that number to increase to 100 or more over time.

If Infotel meets all its contractual requirements, it would be eligible under EDGE for a rebate of the provincial corporate income tax, as well as an exemption from the provincial payroll tax. These benefits will apply for 10 years, with partial benefits to apply during the phase-out period for the next five years.

The EDGE program is generally available to new business start-ups and businesses interested in significant expansion of their operations, provided they meet eligibility requirements specified under the EDGE legislation.

Media contact: Josephine Cheeseman, Communications, (709) 729-4570; (709) 687-3353.

2002 04 27                          3:00 p.m.