P.E.I.'s $400M question

It started with one curious businessman: a packet of documents dropped anonymously into his mailbox has raised serious questions about the biggest business investment programin the history ofPrince Edward Island.

The Provincial Nominee Program (PNP), signed bythe provinceand the federal government in 2001, operated without controversy up to the time it ended on Sept. 2, 2008. The agreement allowed people interested in immigrating to Canada to put up money for a new or existing P.E.I. business, and move to Canada if they passed health and security checks.

The price tag, by the time lawyer and agent fees and various deposits were added on, was $200,000 a head. The program was moderately successful, attracting a few hundred immigrants a year.

A final rush of applicants

Until 2008, that is. Early in the year the federal government announced an end to the program and put a quota on the number of immigrants the province could nominate: 2,000. The government got to work and met that quota, raising a staggering $400 million, an amount equal to one third of the provincial government budget.

Such an unprecedented amount of money raised for investment in Island businesses would seem to be good news, as would the impending arrival of 2,000 new immigrants and their families increasing P.E.I.'s population through immigration is a stated goal of the government but nothing was made of it at the time.

Local businessman Rob McEachern applied for some of the PNP funds. "It was just too good to be true," he said. His application, filed late, was rejected.

His interest piqued, McEachern started an investigation into the program, and that caught the interest of someone with access to high-level correspondence between Citizenship and Immigration Canada and PEI Business Development, the agency charged with qualifying companies for the money.

That someone dropped some of that correspondence into McEachern 's mailbox, correspondence that outlined CIC's serious concerns about the quality of the investments approved for the PNP, specifically the high number of new companies involved.

McEachern took the correspondence to the media and interest in the story began to grow.

PNP good for P.E.I.: government

Provincial Innovation Minister Richard Brown defended the program, saying while lists of companies and immigration were approved by the province, the actual investment was a deal between a private individual and a private company.

It then came out that some government MLAs had taken advantage of the program for their own businesses, and one immigrant professed ignorance of the company he had invested in.

Premier Robert Ghiz stepped in, saying he agreed that having government MLAs involved in the program did not look good. But he said when the issue came up earlier this year he decided to pass the question on to the conflict of interest commissioner, who cleared the deals.

The controversy shows little sign of going away, with the provincial auditor general announcing he is launching an investigation of the PNP, one that could go back to its inception in 2001.