Loans totaling $ 68 million have been granted to companies that do not meet the criteria of aid programs created to offset the effects of the pandemic, reveals a report by the Auditor General.
The document, tabled Wednesday morning in the National Assembly, indicates that these sums were granted thanks to the discretionary power devolved to the Minister of the Economy Pierre Fitzgibbon, who could adjust the terms of their allocation.
In particular, the beneficiary companies had to be profitable before the pandemic. This criterion was not met in at least six of the ten loans examined by the audit.
“This way of proceeding raises questions about the transparency of the process,” says the report. Indeed, other companies could have applied on the basis of similar needs if this possibility had been communicated publicly. “
Ten loans were granted during the period from March 2020 to March 2021 examined by the Auditor General.
They come from the Temporary Concerted Action Program for Enterprises (PACTE), which was managed by Investissement Québec (IQ). IQ and the Ministry of Economy and Innovation (MEI) had made the program criteria public.
This did not prevent several companies whose request for aid was over $ 5 million or which had already established a business relationship with IQ from obtaining PACTE loans without meeting its criteria, the report stresses. ‘audit.
The Minister authorized these 10 problematic loans on the basis of analyzes and recommendations produced by the Specialized Financing and Major Accounts sectors of IQ.
“The analyzes recommended helping these companies deemed strategic for the Quebec economy,” says the report.
Upon further examination of these transactions, the Auditor General identifies several problematic elements in each of the ten loans.
A loan was given to a company that was in serious difficulty before the pandemic. A few months after receiving PACTE’s assistance, she placed herself under the protection of the Companies’ Creditors Arrangement Act.
Another company was finally deemed eligible for the PACTE after being initially refused by a regional IQ office. IQ’s Specialized Financing sector then issued a favorable opinion to this company.
“The company does not present historical or forecast profitability,” however, notes the audit report made public Wednesday.
One loan was used mainly to cover construction costs and debt repayment, expenses which were not, however, eligible for the PACTE program.
Real estate and infrastructure overheating
In addition, the Auditor General notes that real estate overheating has more and more impact on construction projects managed by the Société québécoise des infrastructures (SQI).
The majority of budget increases authorized for projects that were in progress as of March 31 were associated with the overheating construction market, the report notes.
“A more accurate estimate of costs at the planning stage and especially taking into account the context of overheating of the market would allow the SQI to make more informed choices from the outset and avoid having to request new authorizations” , write the auditors.