The Canadian Northern Economic Development Agency could have avoided a recent controversy if it had followed a report that recommended it stop using Dana Naye Ventures to hand out grants.
When it was created in August 2009, Cannor was supposed to be a fresh slate on which to clean up Ottawa’s spotty record doling out economic development grants.
Gone were the days of unfinished projects, unfair grant-giving and seasonal workers, said federal officials.
But to do that, officials needed to know what awaited Cannor in the Yukon’s economic landscape. So they commissioned a report.
In December 2009, that report, Study on the Business Services Environment in the Yukon Territory, landed on the desks of bureaucrats in the Elijah Smith Building.
Its recommendations weren’t very different from the pitch given a few months earlier when Cannor was created.
Cannor should replace several organizations that provide business services in Yukon, it said, recommending a one-stop shop for lending, accounting and business advice.
But Cannor didn’t follow the advice.
The report blames the Business Development Bank of Canada and Dana Naye Ventures for stagnant development in the Yukon.
Despite this, Cannor retained Dana Naye’s service.
Since 1997, Dana Naye has been used as a clearing house for business grants from the Aboriginal Business Development Program.
That program was transferred to Cannor from Indian and Northern Affairs in 2009, but it remained under the control of Dana Naye.
The report recommended changes.
It doesn’t mince words on the quality of business advice at Dana Naye.
They have a troubling record with local businesses and have a reputation for favoritism, it says.
Their business plans lack sophistication and their staff is inexperienced, it says.
Cannor will likely take over the roles of Dana Naye, according to data gathered from “knowledgeable locals” in the report.
“The influence of Dana Naye Ventures as a business advisory and financial service could be diminished,” it says.
Last month, Cannor’s reluctance to challenge Dana Naye led to a potential conflict of interest involving taxpayers’ money.
Dana Naye gave $213,000 from the business program to a company it partly owns, Kilrich Construction.
Cannor made the final decision to approve the grant, but neither party is answering questions on how the conflict of interest happened.
“I have no further comment,” said Wanda Thompson, the director of communication for the agency, in a phone call last week.
Cannor won’t say how Dana Naye recommended Kilrich Construction receive the $213,000. The money helped expand the company’s truss factory.
The agency won’t say if it has any rules about conflicts of interest.
Cannor’s website only has one sentence on the aboriginal development program.
Dana Naye’s website mentions the grants go to businesses that need help writing business plans, establishing a company and accounting services.
It’s not clear how many other grants have been doled out.
Dana Naye won’t answer questions surrounding the Kilrich grant on the advice of lawyers, said Elaine Chambers, its general manager.
No formal market research was done to get the grant, said Rick Boyd, a manager with Kilrich.
“There’s no real research, but the writing is on the wall,” said Boyd.
The grant could undermine a plan by a private company interested in building a truss plant here.
“We’ve been putting together some research toward putting up a truss plant in Whitehorse; we’ve had discussions in our company here,” said Ravi Kumar, vice-president of Edmonton-based Igloo Construction.
“We’ve had to rethink our plans,” he said.
“But we are still actively considering it.”
The business program is the only Cannor program administered by Dana Naye.
But Dana Naye also administers the Canada Business Loan Fund, an Indian and Northern Affairs Department program.
What’s stranger about Cannor’s forgiving attitude toward Dana Naye is the court case that erupted over the report.
In May, Dana Naye sued Ottawa and the authors of the report over its comments.
The report is defamatory, says Dana Naye, a claim that both respondents deny.
As long as the case is open, Cannor won’t say if the report’s recommendations have been implemented.
“As the matter is still before the courts we are unable to comment further at this time,” said Erin Macpherson, a Cannor spokesperson, in an e-mail Thursday.
The case is heading for a one-day hearing on November 25.
Contact James Munson at