Jack Danylchuk
Northern News Services

Yellowknife (Oct 28/05) - The Business Development and Investment Corp. started life last April in the shadow cast by its predecessor.

The final annual report from the taxpayer-financed Business Credit Corp. shows a company mired in red ink, with a $3.09 million deficit and a sour pile of bad loans.

At the end of March 2005, the BCC increased its provision for losses on impaired or non-performing loans by $686,000 to $9.5 million.

Bad loans accounted for a quarter of the corporation's reported $41.5 million loan portfolio.

According to the final annual report, $24.2 million in loans were made to companies in the trade and service sector.

Travel and tourism accounted for $5.8 million; transportation, communication and utilities, $3.8 million; construction, $3.5 million; manufacturing, $2.6 million; fisheries, $555,000; agriculture, $531,000; wildlife, $149,000; forestry, $132,000; arts and crafts, $123,000.

The Business Credit Corp. grew out of a small business loan fund, established in 1970 by the federal government through the department of Indian and Northern Affairs.

BCC's government-funded capital base grew from $500,000 to $45 million and the maximum size of its loans and guarantees reached $2 million.

The Business Credit Corp. and its successor are lenders of last resort, with interest charges two or three pre cent above the commercial lender's prime rate, depending on the assessed level of risk.

Although the companies are important sources of business development money in smaller communities in the Northwest Territories, most of the loans support ventures in Yellowknife, Inuvik, Hay River and Fort Smith.

In its last year of operation, BCC approved 37 loans worth $10.6 million - 25 of those worth $4.2 million for businesses in the major communities.

Loans to businesses in second-tier communities - Rae-Edzo, Fort Simpson, Norman Wells - totalled $2.4 million last year.

All other communities accounted for eight loans in the 2004-05 fiscal year, worth $753,000.