The Yukon Hospital Corporation claims it’s common practice to keep the details of its $67-million bank loan secret.
But this information is commonly disclosed by jurisdictions across Canada, according to Jennifer Davies, assistant vice-president of Partnerships BC.
“It’s in the public interest. Taxpayers want to know where their dollars are going,” she said. “I’m not sure what the reason would be in not releasing that information.”
Her agency oversees British Columbia’s public-private partnerships, and it is considered a leader in the country for its open and transparent practices.
She can’t think of a single instance in which the details of bank loans underwriting government projects would be kept secret in Canada.
Such details were kept under wraps during the early days of public-private partnerships in the United Kingdom, during the 1970s and 1980s, she said. But that’s never been the case, to her knowledge, in Canada.
That comes as a surprise to Joe MacGillivray, CEO of the Yukon Hospital Corporation.
“That doesn’t jive with what I’ve been told,” he said on Tuesday. “I’ll look into it.”
He expects it will take “a week or two” to reach any decision, he said.
The hospital corporation wants to borrow $67 million from CIBC in order to finance three infrastructure projects: the new medical residence being built beside Whitehorse General Hospital and new hospitals in Watson Lake and Dawson City.
The loan was expected to be finalized before the new year, but that decision has been put off until late January because of difficulties in scheduling a board meeting before then, said MacGillivray.
The loan will be repaid over 15 years. Its interest rate remains a secret, thanks to a confidentiality clause that the bank has negotiated as part of the deal, said MacGillivray.
This is to protect proprietary information, he said.
But Davies doesn’t understand why the interest rate would be considered proprietary. That sort of information is frequently released in BC and elsewhere, she said.
The only proprietary information she would expect to be withheld are detailed financial models used by the bank.
The hospital corporation may also find itself running afoul of Canada’s auditor general, Sheila Fraser, if it sticks with its plan to keep the interest rate secret.
That’s because Canada’s generally accepted accounting principles state that the interest rate of a loan should be disclosed in a note to the organization’s consolidated financial statements.
In the case of the hospital corporation, those records are publicly released every September as part of the government’s public accounts.
MacGillivray plans to look into that, too, he said, and likely raise the matter directly with the auditor general’s office.
This is the first time the hospital corporation has solicited private money to build expensive infrastructure projects. It entered the construction business over the last year, at the request of Premier Dennis Fentie and his cabinet.
Fentie and Health Minister Glenn Hart dodged questions about this policy decision when the legislature last met, but the reasons seem obvious enough.
Yukon expects to post a modest surplus this year, but it may not wind up with an extra $67 million to spend. And the government is prohibited from running up a traditional deficit by the Taxpayer Protection Act.
So Fentie’s government has shifted the cost of these big-ticket infrastructure items off the public books with the hospital’s bank loan. It’s an accounting sleight-of-hand known as off-balance sheet accounting, and it’s a favourite among governments looking to hide debt.
It comes at the expense of having to pay millions in interest from now until 2025. But just how many millions, nobody can say, at least for now.
Contact John Thompson at
johnt@yukon-news.com.