Agriborealis milks government

by Doug Ashbury
Northern News Services

NNSL (Feb 18/98) - Among businesses off the hook for GNWT loans is dairy Agriborealis Ltd., according to the NWT's Business Credit Corporation fiscal 1997 annual report.

Agriborealis, which went bankrupt in 1987 after only 10 months of operation, was set up by former city finance director Joe Kronstal who would later reorganize the dairy as Tuaro Dairy Corporation Ltd.

The future of Tuaro remains unclear as the dairy's cows were shipped south last fall.

Kronstal could not be reached Monday for comment.

"We were able to get some money back (from Agriborealis)," Business Credit Corporation CEO Afzal Currimbhoy said.

As well as the $130,157 Agriborealis debt, the GNWT forgave $494,035 worth of credit corporation loans to five businesses in the North outside Yellowknife.

The five others were: Valley Hardware and Building Supplies Ltd., Tundra Adventures Ltd., Meni-Dene Co-operative Association Ltd., PRJ Mechanical Contractors and Pierrette Allaire operating as Sub Arctic Restaurant.

In all, $634,192 worth of loans were forgiven compared to $161,000 for the prior fiscal year.

Once a loan has been forgiven, no further collection action is possible.

But a loan written-off is still subject to collection action.

In 1997, no loans were written off by the corporation compared to a $34,000 in 1996.

On level one loan approvals for 1997, the corporation supported 46 of 58 applications. In 1996, 33 approvals were given with 35 applicants.

Level one includes Yellowknife, Hay River, Fort Smith and Inuvik.

Kimberly Staples, chairperson of the NWT Business Credit Corp., said: "Although loans to smaller level one communities (Fort Smith, Hay River) increased, the number of loans to Yellowknife businesses decreased by over 40 per cent."

She suggested the Yellowknife drop may be an indication other lending institutions are "handling more business needs, leaving the corporation to fulfil its mandate as a higher risk lender."

Across the North, the corporation approved 99 of 111 applications worth $9 million in 1997 compared to about $8 million in the prior fiscal year.

Of the $9 million, only $888,000 went to North Slave region businesses. A large share of the $888,0000 went to Yellowknife businesses, Currimbhoy said.

The corporation's 1997 year-end deficit was $2 million, down slightly from $2.1 million thanks to $67,000 1997 net income. In 1996, the corporation made $664,000.

The corporation reports to Economic Development Minister Stephen Kakfwi. The annual report was tabled in the legislature last Thursday.

The maximum liability for any one business or group of related businesses is $1 million. The interest rate is prime plus two per cent set quarterly.

On loan activity since the credit corporation's fiscal year ended March 31, Currimbhoy said: "Business continues to be very active. We and RWED, which administers the program, continue to be very busy."