News Release
Office of the Official Opposition

Government ignores its own business guidelines
November 22, 2006

Liberal Opposition Critic for Innovation, Trade and Rural Development and MHA for the District of Grand Bank, Judy Foote, says the proposed fibre-optic deal between government and a business consortium continues to prompt a multitude of questions, not the least of which involves government’s disregard of its own investment guidelines for funding business proposals.

Foote took some of these questions to the floor of the House of Assembly today when she questioned the

minister of business on why the proposed subsidy goes against government’s own business investment guidelines, which state that ineligible business projects for government funding include those that assist a business to gain market share from other local companies.

"The minister today tried to twist the fact by saying that it is not really an investment in a consortium, but merely a purchase of fibre-optic cable space. The reality is that $15 million of taxpayers money is being diverted into this project so that competition can be introduced into the marketplace, one of government’s own lead arguments for justifying the deal. This government funded project will eventually compete against a local company, already employing hundreds of Newfoundlanders and Labradorians."

The Liberal MHA also questioned the innovation minister on the advice sought from, and recommendations provided by, the Business Advisory Board with respect to this particular business proposal. The minister confirmed in his response that this board was one of many which provided input into this telecommunications project.

The Business Advisory Board was appointed last year by the premier to provide advice and recommendations to government on matters of economic development and business in the province. One of its members is Dean MacDonald, a former business associate and a friend of the premier and CEO of Persona, a partner in this deal that has requested $15 million of taxpayers money. The conflict of interest perception of this project because of this close relationship has generated tremendous suspicion both in the public and with the Opposition that it really is the premier looking after his friends.

"The minister was not able to deny that this board provided business advice on this unsolicited proposal, and we have the premier wondering why people are questioning the process and the relationships involved in this whole deal. If the premier was surprised by the extraordinary number of people at recent job fairs, no wonder he is surprised and annoyed by the scrutiny this proposal is receiving province wide."

Media Contact:
Kim Ploughman
Caucus Communications
Office of the Official Opposition
709-729-6427