Provincial Government Program Effectively Managed

The Honourable Keith Hutchings, Minister of Innovation, Business and Rural Development, assures residents that the Newfoundland and Labrador Immigrant Investor Fund Limited is being managed responsibly and effectively. Minster Hutchings provided information on the fund to correct inaccurate statements by members of the Official Opposition made in the House of Assembly.

“It is disappointing that the Official Opposition is publicly communicating inaccurate information relating to the Immigrant Investor Fund,” said Minister Hutchings. “At no point have there been losses totalling $5 million and I challenge them to identify their source for that incorrect information. Furthermore, there are repayment terms attached with this program and we have to be good stewards of the provincial treasury and ensure that any investment is the right one.”

Established in 2005, the Newfoundland and Labrador Immigrant Investor Fund receives, administers, and disburses funds from Citizenship and Immigration Canada under the Business Immigration Program. Funds are intended to be used for large-scale economic development initiatives and have to be repaid to the Federal Government after five years.

“In its very essence, funds from the Immigrant Investor Fund are borrowed money and have to be treated as all borrowed money,” said Minister Hutchings. “To date, the Provincial Government has not had to access this fund due to its strong cash position. We have made sound investments using existing programs to advance economic development initiatives throughout the province.”

In January 2010, the Auditor General recommended that in the absence of suitable projects that the Provincial Government place some of the available funds under the Immigrant Investor Fund into investments with higher yields to ensure that there are no losses.

“As a government, we shared the view of the Auditor General and invested in strip bonds in March 2010,” said Minister Hutchings. “Currently, the corporation has approximately $88 million in strip bonds. They are earning interest higher than can be earned on bank deposits and higher than required to cover any fees and as of March 31, 2012 recorded a cumulative surplus of more than $3 million.”

“We have and continue to identify possible infrastructure developments that could be supported under the Immigrant Investor Fund that would bring benefits to Newfoundland and Labrador,” said Minister Hutchings. “However, the point that any investments must be repaid within a predetermined period cannot be overstated.”

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Media contact:
Scott Barfoot
Director of Communications
Department of Innovation, Business and Rural Development
709-729-4570, 690-6290
scottbarfoot@gov.nl.ca

2012 11 29                                4:45 p.m.