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$8 million loss on Centennial Food loan puts total Tory business losses to near $3.8 billion, says Liberal Treasury Critic Sapers
The sale of the Centennial Food Corp. loan at a projected loss of $8 million to taxpayers is another addition to the long list of Tory business bloopers and blunders, says Alberta Liberal Treasury Critic Howard Sapers.
Sapers was responding to the announcement that the government had decided to sell its loan in Centennial Food to the Bank of Montreal for $5.4 million.
"Is it coincidence that the Provincial Treasurer served up this $8 million loss on a Friday (March 10), just before weekend? I don't think the taxpayers of this province will be giving the Klein government any thanks for this deal. The latest $8 million loss brings the total amount of Tory business losses to an astronomical $3.8 billion. That amount could run Alberta's public hospitals for about a year," said Sapers.
Sapers pointed out that the Provincial Treasurer still refuses to disclose the amount of interest that has accrued and has been paid on the Centennial Food loan since April 1, 1991. Under the loan agreement, the government was eligible to receive interest payments of between 3% and 10%, with the actual interest dependent on the amount of cash flow generated by the company. If the cash flow was inadequate to permit repayment of the minimum interest of 3%, interest was to accrue at 3% and was due at maturity in 2003.
Using the minimum 3% interest rate as a benchmark, Alberta taxpayers appeared eligible to receive a total of nearly $3.9 million on the loan through March 10, 2000. Through July 31, 1997, the government has received only $135,000 in interest payments.