PNP returns to haunt Liberal campaign

Immigrant investment and the Provincial Nominee Program looked to be a tired issue when the writ was dropped for P.E.I.'s Oct. 3 election, but new revelations brought it to the forefront of the campaign.

Midway through the campaign three former provincial government workers came forward with accusations of government officials accepting bribes from potential immigrants. They passed the allegations on to federal Immigration Minister Jason Kenney, who referred them to the RCMP and Canadian Border Services.

The women's accusations brought new life to an old scandal, and put the Liberals on the defensive for the first time in the campaign.

A long-standing program

The immigrant investor section of P.E.I.'s Provincial Nominee Program ran for years with few people even being aware of its existence. In exchange for $200,000, a portion of which would be used as an investment in an Island business, people wishing to come to Canada could get a chance to immigrate to Prince Edward Island. Similar programs were running in other provinces.

The program started in 2001, and over the course of the next six years hundreds of immigrants took advantage of it.

But in early 2008, Immigration Canada announced it was shutting down PNP. Premier Robert Ghiz's government moved to take advantage of a potential immigration boom, rushing 2,000 potential immigrants through PNP, causing hundreds of millions of dollars to flow through the program.

It ended quietly on Sep. 2, 2008, but did not remain quiet long. A letter from Immigration Canada, expressing concerns, was leaked to businessman Rob MacEachern of Priest Pond. MacEachern had applied for PNP money, but was rejected because he was told his application was too late.

"I applied because I thought the thing was a farce anyway," MacEachern told CBC News.

"It just sounded too good to be true."

MacEachern shared the letter with CBC News in late September, and questions about what happened to all that money began to swirl.

Then Innovation Minister Richard Brown was one of the first to defend the program.

"We're not ripping off anybody here. I can assure you of that," said Brown.

But Brown admitted there were people with close contacts to the government who benefited from the program.

"There are people, MLAs and former MLAs, that are in this fund, yes," he said.

"I can assure you the conflict of interest officer was brought in on each and every one of them."

Brown refused to go any further than that in discussing where the money went.

"There's privacy rules and I'm going to honour the privacy rules," he said.

Private investments

Unlike the investment of taxpayer dollars, which are public knowledge, even announced in news releases and lauded at special events, the money invested in businesses under PNP came from private sources. Essentially, PNP investments were considered private business deals, facilitated by a government program, but private all the same.

In all, PNP applicants put up more than $525 million in 2007 and 2008. Almost half of that was on paper only, loans that were immediately repaid, without money actually changing hands.

Of the $290 million left over, close to half went in fees and commissions to what is known as intermediaries: eight private firms that matched businesses with investors. Another small piece went to legal and accounting fees, and the province held a trust fund to pay back immigrants who had their visa applications rejected.

That left $120 million that was actually invested in Island businesses.

Auditor General Colin Younker investigated the program. He found some irregularities, but no major concerns. While there was an appearance of conflict of interest, said Younker, there was no actual conflict.

By early 2009, opposition parties were calling for full disclosure.

"We need a public inquiry," said Progressive Conservative Leader Olive Crane.

"We needed it from the beginning and I continue to say that we need it until we get all the answers."

"We know that we have MLAs involved," added NDP Leader James Rodd.

"We know that deputy ministers and deputy ministers' spouses are involved."

The Liberals used their majority to stonewall efforts at the public accounts committee to disclose a full list. Some names did come out, and one former deputy minister was forced to return the money.

Apart from allegations of conflict of interest, Immigration Canada expressed concern about the quality of companies selected for investment. For example, start-up companies were not supposed to be eligible. There were also worries about how well immigrants were informed of the companies they were investing in. Some immigrants arrived on the Island without even knowing the name of companies they were part owners of.

Kenney said the sudden rush of applicants rang alarm bells.

"All of the sudden we had more nominations for that particular program coming than we did from most of the huge provinces like Ontario," he said.

"That had our heads scratching, but also we heard reports about promises being made about processing times or people not having to pay taxes in Canada."

A low boil

For three years, PNP simmered under the surface with the hint of something unethical. CBC News is still before the courts trying to get a full list of people who benefited from it.

While Crane was tried from the start to keep the issue on the front burner, years without new revelations appeared to have caused it to lose its steam as a scandal.

And then, mid-election campaign, came a whole new suggestion of unethical behaviour. One of three women who came forward said she personally saw money changing hands in Hong Kong.

Ghiz dismissed the accusation as crazy. He called the three disgruntled former employees, and noted letters written by the women included accusations against more than high government officials, but also the Supreme Court of P.E.I., and the CBC.

"It talks about a lot of different wild accusations in there," he said.

Crane leapt on the opportunity to raise the concerns about PNP once again, calling his performance on the file a disgrace in leaders debate.

There is still no full public record of exactly where all the $525 million of immigrant investment in 2007-08 went, but Crane said if she should become premier, there will be a full public enquiry, and it will all come out.