September 28, 2022

The Queens County Citizen

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Auditor General’s Report: Pierre FitzGibbon Discretionary Involvement in 10 Troubled Loans

Auditor General's Report: Pierre FitzGibbon Discretionary Involvement in 10 Troubled Loans

A report publicly found on Wednesday that Finance Minister Pierre FitzGibbon had used his discretion to grant $ 68 million in financial aid to companies that did not meet the standards set by the pandemic program.

Ten troubled loans were granted from March 2020 to March 2021, as examined by the team of Quebec Auditor General Gailine Leclerc.

One of the eligibility criteria is that businesses should be profitable before the epidemic. At least six of the ten loans examined by the audit did not meet this standard.

Investment Quebec (IQ) is a government agency for the Temporary Concerned Action Program for Enterprises (PACTE), which aims to help businesses maintain their working capital during the epidemic.

According to the audit report, companies whose applications were rejected by the regional IQ office received a positive response after consulting other IQ units, namely the specialized financing and major accounting divisions. .

At a press conference after presenting his report to the National Assembly, Mr.Me Leclerc explained that Mr FitzGibbon used the terms of the Internal Management Guide to “adjust the terms and standardize loans to suit the needs of the files”.

“I do not know if he’s a fan,” he said.Me Leclerc. All I can tell you is that we found that there are 10 companies that do not meet the published standards. “

To make his decisions, Mr. FitzGibbon relied on the analysis of the Specialized Financing and Major Accounts Departments, according to which he had to grant them loans because they were “considered strategic for the Quebec economy”.

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MMe Leclerc said she was unable to meet the standards to declare the company very important. “To make sure it’s not a strategic business, I want to have standards related to strategic business,” she said. So without standards, judgment would be difficult. “

M’s audit teamMe Leclerc examined 22 loans granted under PACTE. In ten cases several problematic factors were identified. A company has been helped to support its growth, not to fight the epidemic. Second loan to finance capital expenses not eligible for PACTE.

In addition to the six businesses that helped when the pandemic was not profitable before, two were funded without displaying future profitability.

Mr FitzGibbon denied that he had exceeded the standards. “I’m very happy with the government, I think we’re very good for business,” he said.

The minister requested that the Quebec government be flexible, as the quickly established assistance did not anticipate all cases. Those who know the lending sector will understand that it is impossible to standardize everything.

Mr FitzGibbon agreed that the bankruptcy rate of companies benefiting from PACTE, which currently stands at 0.5 per cent, would rise. “The rate for us is very low, but it will increase. There are those who can’t pay,” he said.

As of March 31, 2021, 1,076 companies had received $ 850 million from PACTE.

Meghanne Perry Melancon, a PQ spokeswoman for the economy, urged the minister to shed light on all loans granted. “If there is no affection, we must explain it to ourselves and give assurances about it,” the deputy told a news conference.

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For his part, Mr FitzGibbon assured him that he had no personal interest in these companies, but ruled out the possibility of links with managers. “Of course I know people, I know everyone,” he said.

IQ declined to name 10 companies, Mr. FitzGibbon objected that no discretion was used because his decisions were based on analysis. Spokeswoman Isabelle Fontaine explained: “We do not disclose the names of companies targeted by the Auditor General’s activity loans for privacy reasons.”

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