Frozen investments prompt policy reversal from Finance

The territory will not pour any more money into asset-backed commercial paper, the controversial investment that has frozen $36.

The territory will not pour any more money into asset-backed commercial paper, the controversial investment that has frozen $36.5 million of government money.

Finance Minister Dennis Fentie announced the policy change Monday morning, two weeks before the Auditor General will release a report reviewing the investments.

Finance officials will examine alternative investments in the money market now that its policy bans so-called ABCP investments, which has been used by the government for 12 years.

The decision follows a review after a crash in the American money market this summer.

Asset-backed commercial paper investments are based on high-risk loans for mortgages on homes, cars and other large purchases.

About $36.5 million of government funds are frozen while investors wait for a restructuring proposal meant to repay the investment expected in the next couple of days.

The new restrictions shrink the investment-market options by one-third, said Clarke LaPrairie, assistant deputy minister of financial operations and revenue services.

“Asset backed commercial paper is the second largest category of investments so we’ll obviously have less to pick from,” he said.

“It will make the job more challenging in terms of the exact date we want assets to mature on, but we’ll accommodate.”

The decision comes in advance of a visit from federal Auditor General Sheila Fraser on February 7.

Fraser will release two reports: one on the territory’s role in the 2007 Canada Winter Games and a second on the government’s investments in asset-backed commercial paper.

The new policy is not connected to findings in Fraser’s report, said LaPrairie.

“We have some general ideas about the report, but they’re not connected,” he said.

“We’ve provided information to the auditor general, but I won’t presuppose what she’s going to say.”

Fentie has not been briefed on the audit, said a cabinet spokesperson.

The auditor general’s report includes responses from the government departments undergoing a performance audit.

A spokesperson from the auditor general’s office could not confirm if the audit of asset-back commercial paper will include response from the Finance department.

The report is “substantially completed,” but not yet printed, said the spokesperson.

The Liberals asked the auditor general to review the controversial investments last November.

The Finance department has been reviewing its procedures for several months, said LaPrairie.

“Given the unprecedented events in the money markets this summer, it was a good time to review our investment practices,” he said.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Many continue to opt for take-out as dining rooms reopen

City considers options for more patio space

Yukon government suspends phone program for vulnerable women after data overage issues

The Yukon government suspended service without warning last month to cell phones… Continue reading

Campgrounds reopening June 4

Yukoners are asked to stick to their “double-bubble” households, respect social distancing… Continue reading

Yukon government has valid claim in Wolverine mine bankruptcy, judge rules

“This application arises because of an irresponsible mining venture in the Yukon”

City tickets 50 on day one of return to parking meter enforcement

A total of 50 parking tickets were issued June 1 by the… Continue reading

Driver charged in 2019 Whitehorse pedestrian death

A driver has been charged in relation to the 2019 death of… Continue reading

Council holds off on designation decision for portion of the tank farm

Decision comes in light of notice of violation to project proponent

UPDATED: Yukon government clarifies businesses available to travellers

Travellers can stop anywhere along the approved route in one of the marked communities

City hall, briefly

A look at decisions made by Whitehorse city council this week. June… Continue reading

Pilot Station salmon sonar to go ahead this season

The Pilot Station sonar, located near the mouth of the Yukon River… Continue reading

Renovations start at LePage Park

The Yukon Historical and Museums Association has started a resurfacing project for… Continue reading

Most Read