A federal agency won’t answer questions surrounding a conflict of interest in a recent $213,000 grant to a local construction company.
The Canadian Northern Economic Development Agency, or Cannor, allowed Dana Naye Ventures to administer federal money to Kilrich Construction despite the fact that Dana Naye owns a stake in Kilrich.
Cannor won’t answer what measures were taken to address the conflict of interest. It
stopped returning phone calls.
Instead, it responded in a letter to the editor that doesn’t answer key questions related to how the money was handed out.
Meanwhile, other construction companies are complaining the grant to Kilrich hurts their potential for expansion in the Yukon.
The money for the grant comes from the pan-territorial Aboriginal Business Development Program, a $2.3-million fund designed to help aboriginal businesses grow.
In the Yukon, Cannor has dispatched Dana Naye to deliver the program.
“Dana Naye Ventures delivers the Aboriginal Business Development Program on behalf of Cannor in the Yukon region,” wrote Kathleen McLeod, a spokesperson with Cannor, in an e-mail last week.
Businesses looking for a grant need to be quick if they want a piece of the action.
“Submissions for funding are reviewed on a first-come, first-served basis, based on the eligibility criteria of the program,” wrote McLeod.
So obvious questions arise on how knowledge of the grant made its way to Kilrich.
How did Cannor share the information about the grant with Dana Naye? And how did Dana Naye turn around and tell Cannor that a company it owns should receive the grant?
No one will say.
Kilrich, which received the grant to help it expand its truss factory in the McCrae industrial area, won’t return phone messages left this week.
Dana Naye won’t respond on the advice of legal counsel, said Elaine Chambers, the group’s general manager, in a message left with the News.
And Cannor spokesperson Erin Macpherson won’t answer her phone or return multiple phone messages this week.
Instead, Cannor sent a letter to the editor Thursday morning that tiptoes around the conflict-of-interest issue. (See letter page 8.)
Dana Naye does not approve the funding in the Aboriginal Business Development Program, the letter says.
It’s Cannor that makes all the final decisions on who gets funded based on program criteria, it says.
But are there any criteria related to conflicts of interest? Does Cannor not think conflicts of interest are important when it hands out grants?
Macpherson, the Cannor spokesperson, did not return an additional phone call on those issues Thursday.
The situation is in stark contrast to the assurances given by Cannor president and deputy minister Nicole Jauvin in an interview last May.
Jauvin was asked to comment on the bad reputations earned by other regional economic development agencies.
They’re often derided as slush funds that only benefit well-connected companies.
“Sometimes mistakes occur and mistakes have occurred in other regional development agencies,” she said.
But Cannor was supposed to be different.
It would research all eligible grants and make sure there was no perception the agency was picking favourites, she said.
“I’m very comfortable that the processes are in place to ensure that there’s proper access to any number of projects,” she said.
Faced with its first chance to prove it, Cannor is remaining silent.
The conflict-of-interest isn’t the only signal Cannor’s grant process is flawed.
No market research was done by Kilrich to prove the company needed the grant.
“There’s no real research but the writing is on the wall,” said Rick Boyd, a manager with Kilrich, at a news conference announcing the grant last week.
In a follow-up e-mail with Cannor, some statistics on future housing needs in Whitehorse were sent, but there was nothing in the form of a report on the need for trusses, specifically.
Nor was there any argument made on why private capital couldn’t fund Kilrich’s truss factory expansion.
The grant has forced Igloo Construction, based in Edmonton, to rework plans it had to build a truss factory in Whitehorse.
“We are gradually increasing our investment in Whitehorse,” said Ravi Kumar, vice-president at Igloo.
“We’ve been putting together some research toward putting up a truss plant in Whitehorse; we’ve had discussions in our company here,” said Kumar.
“We were quite surprised at the government,” he said.
While the grant throws a kink in Igloo’s plans, they still want to build a truss plant.
“We’ve had to rethink our plans,” he said.
“But we are still actively considering it.”
At last week’s news conference, Minister of Democratic Reform Stephen Fletcher argued that Kilrich is an aboriginally-owned business and that the expansion of the truss factory was “critical for development in the Yukon.”
It’s also the only truss manufacturer in the territory, said Fletcher.
But that’s not true.
Paddle Wheeler Industries Limited, based in the Kulan subdivision in Whitehorse, manufacturers trusses, said Karen Gilbert, a co-owner.
They’ve been making trusses for five or six years, said Gilbert.
“It’s been on our business cards for years, we’ve been at the job fairs for years, we’ve been advertising,” she said.
Gilbert’s surprised no one from Cannor asked them what the impact of the Kilrich truss expansion would be on their small company.
“Nobody even phoned us to see if we were doing trusses,” she said.
Paddle Wheeler is a much smaller operation than Kilrich. It requires the contractors who want trusses to help in the making of the trusses, but it’s Paddle Wheeler who own the truss-making machinery.
The company wouldn’t be able to receive the grant because it’s not an aboriginal business.
That shouldn’t matter, said Gilbert.
“If they’re handing out grants for truss plants, I think everyone is entitled to a grant regardless if you’re aboriginal,” she said.
David Kalles also manufacturers trusses in Watson Lake.
He’s not worried about the grant.
“(Kilrich) doesn’t compete against me in Watson Lake just because of distance and I don’t try and compete in Whitehorse,” said Kalles.
Aside from Dana Naye, Kilrich is also owned by several First Nations and the Dakwakada Development Corporation.
Contact James Munson at