Aurora Fund winding down
Federal changes spell an end to controversial funds

Richard Gleeson
Northern News Services

Yellowknife (Mar 17/00) - The Aurora Fund is winding down, along with similar provincial and territorial immigration funds.

Under new regulations the government adopted last year, Citizenship and Immigration Canada has taken over sales of immigration funds from the provinces and territories.

The funds are used to provide Canadian businesses with borrowing capital. In return, foreigners get fast tracked to a Canadian visa and the prospect of a slight return on their investment.

"These funds will continue to run ... until all of the loans are terminated and funds returned to investors," said Financial Management Board comptroller general Lew Voytilla, who is also a member of the funds' board of directors.

Voytilla emphasized the investment risk sits entirely with the immigrant making the investment -- "The territorial government is not on the hook in any way shape or form," said Voytilla.

That will change under the new rules. If the government draws money from the new program to reinvest in local businesses it must guarantee repayment, Voytilla said.

The 1999 financial statements of the Aurora Fund and its successor the Aurora Fund II will be tabled at the upcoming session of the legislative assembly.

The federal government centralized the immigration fund administration to increase the economic benefit of the fund, reduce the potential for abuse and reduce the amount of government resources required to administer the funds.

Under the new regulations, those hoping for Canadian visas are required to invest a minimum of $400,000. Minimum investment in the Aurora Fund was $250,000.

The Aurora Fund was a central issue during last year's conflict of interest inquiry into a complaint against former premier Don Morin.

During the hearing it was revealed that the government violated its own policy in appointing former cabinet secretary Roland Bailey as fund manager.

A numbered company partly owned by Bailey got a $4.2-million loan from Pacific and Western Trust Corp., the Saskatchewan-based trust company that does most of the financing associated with the fund. Voytilla bristles at any suggestion that there are any conflicts of interest associated with the fund. He pointed out that the funds' board, headed up by Finance Minister Joe Handley, can accept or reject recommendations of committee composed of three southern businessmen. It cannot approve a loan application rejected by the committee.

The funds were also not as good a deal as the government had hoped when it established them.

Loans given for Northern business ventures are charged 6.9 per cent interest. At the time the fund was introduced interest rates were running in the 12 per cent range. "Any one of the people on this list (of borrowers) could go to any bank and get a loan," said Voytilla.