Newspaper article The Canadian Press

No Proper Business Case Was Done for $224M MaRS Loan, Opposition Says

Newspaper article The Canadian Press

No Proper Business Case Was Done for $224M MaRS Loan, Opposition Says

Article excerpt

No business case for MaRS loan: opposition


TORONTO - Scores of documents released Thursday by the Ontario government failed to convince the opposition parties that the Liberals did a proper business evaluation before granting a $224-million loan to a troubled Toronto real estate project.

The Progressive Conservatives and the New Democrats have been calling on the government for weeks to release a business case for the loan that Infrastructure Ontario granted for the MaRS Phase 2 office tower in 2011.

The released documents included an appraisal for the tower, a debt service guarantee and the financing agreement, which the Liberals say essentially comprise a business case.

But Tory MPP Randy Hillier said those don't add up to a business case.

"We had some suspicion that they had not done their due diligence and hadn't evaluated this on any merits and it's clear so far from the released documents that we were right."

Construction of MaRS Phase 2 was halted in 2008, when the recession hit, and resumed in 2011, but the building has had trouble attracting tenants. MaRS didn't originally qualify for a loan under Infrastructure Ontario's rules, so the government has said that in 2010 the regulations were changed to ensure MaRS was eligible.

NDP house leader Gilles Bisson suggested the government wanted to give an appearance of transparency with release of the documents, but didn't actually show how the loan was approved.

"There are municipalities across this province that tried to get approved under Infrastructure Ontario," he said. "They couldn't qualify and the government moved heaven and earth in order to qualify this loan without having the business case...I think it's a question where the government really wanted to do this and they didn't have the proper business case in the first place to go forward."

Infrastructure Minister Brad Duguid insisted the paperwork released Thursday equals a business case.

"It's unfortunate that Randy Hillier doesn't seem to know that a business case for a loan comprises of a value assessment and a secure creditor, which are included in this package of documents," he said in a statement. …

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