Nova Scotia Liberals denied promised aid to Irving Shipbuilding

Nova Scotia's Liberal government revealed Thursday it refused to honour a $200-million loan guarantee offered to Irving Shipbuilding in a secret 2012 provincial government letter to the company.

The $200-million loan guarantee was in addition to the $304million in provincial government loans and grants pledged to the Halifax Shipyard as part of its winning effort to secure the contract to build vessels for the Canadian navy under the National Shipbuilding Procurement Strategy.

Secret letter details promise

The loan guarantee was part of the assistance package announced in March 2012 by thethen-NDP government, but the exact amount was withheld until late July this year. That was only released after an appeal to Nova Scotia's information and privacy commissioner by the Canadian Taxpayers Federation.

The loan guarantee was detailedin theJan.10,2012, letter from acting deputy minister Sandra McKenzie to Irving spelling out the province'sfinancial commitment to the company.The letter released to CTFAtlantic director KevinLacey includes "a guarantee not to exceed $200million."

'The request was refused'

In response to questions from CBC News, the Nova Scotia Department of Business saidfor the first time that the Liberals refused to honour that guarantee.

"The $200 million that's referenced was part of the negotiations under the previous government, but it was not formalized," spokeswoman Heather Desserud said in an email statement.

"After the change in government, Irving talked to Premier [Stephen]McNeil about accessing that $200 million in assistance, but the request was refused."

Other funding used

The original agreement included a $260-millionforgivable capital loan,which has been fully disbursed, and is in good standing, the statement said. Another $44-million forgivable loan has been executed,but has not been drawn down, or used, Desserudsaid in the statement.

Providing additional information could violate existing agreements, her statement said.

Irving Shipbuilding said it is paying a commercial interest rate on its active provincial government loan.

"The additional loan guarantee referenced has not been utilized by Irving Shipbuilding," company spokesmanSean Lewis said in an emailstatement to CBC News.

'Shrouded in secrecy'

The size of the loan guarantee and the revelation that the Liberals rejected it was the result of a four-year pursuit for details by the taxpayer federation.

"This deal has been shrouded in secrecy from the beginning," Lacey said.

"Why does it take four years before we find out about this $200-million loan guarantee?"

Irving maintains the investment has been a good one, Lewis said.

"The modernization of the Halifax Shipyard and early stages of construction of the Arctic Offshore Patrol Ships have provided over $450 million in contracts to companies in Nova Scotia and over 4,000 direct and indirect jobs," he said by email.