Follow the money? No, says Ottawa

Federal officials won’t provide any details on loss of $3.1 million in funding for Farm Genesis Group

It’s your money.

But when it comes to the $3.1 million taxpayers gave Farm Genesis Group Marketing, don’t bother asking what happened to it.

“There are confidentiality stipulations around the agreements we have in place with third parties,” said Gabriela Klimes, spokesperson for Western Economic Diversification which gave the money to the failed hemp-processing venture.

“When we settled with the government, we were told that we weren’t to say anything about it, and that was the agreement,” said Farm Genesis president Keith Hannah.

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Metal building.

In fact, the cone of silence covers pretty much all of the $289 million given to projects in Western Canada by the federal government since 2009 under its Community Adjustment Fund (which is administered by Western Economic Diversification). However, Farm Genesis falls into a special category because it is exempt from access-to-information requests.

“However, I can tell you that WD undertakes a rigorous review process before granting funding to proponents, and has stringent rules in place to ensure that taxpayers’ dollars are protected,” Klimes stated in an email in February when the Manitoba Co-operator was beginning its investigation into the failed venture.

That investigation has uncovered, among other things, that upon getting the federal cash Farm Genesis began paying one consultant $40,000 a month; embarked on buying equipment and building a 25,000-square-foot plant without having an established product or firm sales contracts; and didn’t have a chief financial officer or even an accountant.

If the government wants to claim its oversight is stringent and rigorous, then it should provide some evidence, said Colin Craig, Prairie director for the Canadian Taxpayers Association.

“One of the things any taxpayer should be able to do… is to get hold of the correspondence and file notes on a situation like this,” said Craig. “It’s extremely troubling that they forked over more than $3 million before someone said, ‘Hey wait, it’s time to pull the plug on this.’”

The NDP critic for Western Economic Diversification has also tried to get details on the Farm Genesis file, but without success.

“On one hand, yes, these projects are warranted in regions and communities in need of investment and an injection of cash, but I think you have to be very diligent about what kind of framework you put in place to really be accountable and transparent,” said Fin Donnelly, a B.C. MP.

“I would say for too long economic development agencies have been compromised by political interference and pork-barrelling by both the Conservative and Liberal governments; this is nothing new, but unfortunately it is happening too frequently.”

But Craig said government should just get out of the business of funding businesses.

“A lot of businesses just don’t repay the money they’re given and that’s not fair to all the good businesses out there that start up with private funding,” he said.

“There should be a red flag for the government if someone shows up on their doorstep and says, ‘I can’t get my friends, relatives or any bank to invest in me. Will you invest in me?’”

About the author

Reporter

Shannon VanRaes is a journalist and photojournalist at the Manitoba Co-operator. She also writes a weekly urban affairs column for Metro Winnipeg, and has previously reported for the Winnipeg Sun, Outwords Magazine and the Portage Daily Graphic.

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