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One of the things I never see in these free money deals: the government never takes an equity position. If you are truly the lender of last resort, why not ask for a modest ownership position, say no more than 20%, redeemable at cost after the loan is paid. Also, a position on the board of directors would give the government some level of insight into the workings of the company – particularly if the borrower is one of these fly by night operations who seem to disappear when the free money runs out. That would allow the province to step in and seize the capitol assets before they cross the boarder at Aulac.
Jon Coates | October 18, 2013 | Reply
Well the hazards of handouts really points to some glaring failures and generosity that was not really needed. The Dexter Government tried to make political hay out of the Ship contract by attaching the taxpayers to a 260 million dollar loan to the Irvings. The what if will always be in the mind. What if the province refused to make this hand out ? Would Irving pulled up stakes and courted the New Brunswick government for similar money ? Probably but they would indeed not have been successful. For the Irvings, Port Hawkesbury Paper and DSME’s that have been questionable one could point to Michelin , the Sobeys the Eastlinks and other in this province who have benefited from similar handouts with great payback over time to the Nova Scotia Economy. As an Adam Smith Capital I would personally say no to them all especially a Golf Course in Inverness. Problem is the world does not run in Laize Faire Economics where the strong survive on their own skills
paul | October 18, 2013 | Reply
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