(Quebec) At the discretion of the Minister of the Economy Pierre Fitzgibbon, at least 10 companies were able to benefit from the assistance program linked to the pandemic for a total sum of $ 68 million without meeting all the criteria.
This is what the Auditor General of Quebec, Guylaine Leclerc, reveals in her annual report tabled in the National Assembly on Wednesday.
Due to the effects of the pandemic on the economy, the Legault government created the Temporary Concerted Action Program for businesses (PACTE) in order to offer them emergency aid, exceptional and circumstantial support.
For the purposes of her investigation, the Auditor General analyzed 22 loans or loan guarantees granted under this program. They represent $ 251.2 million, or nearly 30% of the assistance granted as of March 31, 2020 under the PACTE.
However, among the 22 files that she analyzed, the auditor discovered that “10 loans were authorized even if these requests did not meet all the eligibility criteria provided for in the internal management guide”. This is almost half of the cases examined.
One of the loans was granted to a company not to enable it to cope with the pandemic “but rather to support its growth”. Another dealt with capital expenditures that are not eligible for the PACTE under the criteria made public.
“For the eight other loans, the beneficiary companies did not adequately meet the criteria, […] because they presented a precarious financial situation before the pandemic or they were not able to demonstrate that their financial structure suggested a prospect of profitability ”, one can read in the report.
It is added that the authorization of these loans was justified by the fact that a provision of the internal management guide of the Ministry of Economy and Investment Quebec provides that the terms “may be adjusted by the Minister according to the needs of files ”. This important nuance has not been communicated publicly.
It is therefore “on the basis of a decision by Minister” Fitzgibbon that these 10 loans totaling $ 68 million were granted. “This decision was supported by an analysis which recommended helping these companies deemed strategic for the economy of Quebec,” said the Auditor General.
“Although we do not question the relevance of having granted these loans, this not being the objective of our mandate, this way of proceeding raises questions about the transparency of the process. Indeed, other companies could have applied on the basis of similar needs if this possibility had been communicated publicly. ”
For another aid measure, the Emergency Assistance Program for Small and Medium-Sized Enterprises (PAUPME), “the processing of requests for assistance has not always been fair from one RCM to another and, in several of the files verified, no documentary evidence came to support the amount and the conditions of the loan granted ”.
Still according to the Auditor General, “the lack of uniformity in the requirements and criteria used has resulted in unfairness for certain companies who have seen their applications refused when they could have been accepted if these companies had been located in a other MRC. ”
Four of the five RCMs selected as part of the Auditor General’s work “added their own criteria or requirements.” The purposes of the program have also been interpreted in different ways from one place to another, with some RCMs believing that it was very permissive emergency aid while others were more stringent and rigorous.
“The justification for the amount of several loans granted was not supported in the file, and some were accompanied, without explanation, of an amortization period of 60 months, which, according to the standards of the program, constitutes a situation of exception ”, deplores the Auditor General. In some cases, there was simply no justification for the amount awarded to companies.
According to her, the Ministry of the Economy “did not ensure adequate follow-up of the weekly status reports sent to it by the MRCs”. Four of the five RCMs testified that the ministry never questioned them about their follow-up statements, even though the date of starting a business was not well presented (the business had to be in business since at least six months to benefit from the PALM).
In her report, the Auditor General also denounces that the Montreal School Service Center has not put in place essential elements to ensure that its resources are distributed in accordance with the needs of students and institutions. She deplores the cumbersome and complex process of assigning substitute devices to a physical disability, such as a wheelchair. She reiterates that the cost estimates of the projects are not adequate for the Société québécoise des infrastructures. Meeting deadlines is also a problem. She adds that the cybersecurity measures put in place by certain audited organizations should be improved.