Some deals just smell like aged Roquefort
ACOA taking action to recover funds
By Shawn Fuller
The federal government’s Atlantic Canada Opportunities Agency (ACOA) is taking action to recover money loaned interest-free to Americans who created great hopes and little else in the Nova Scotia farm community three years ago.
La Ferme d’Acadie, the Yarmouth N.S. based cheese manufacturing plant started in 1999 with much fanfare and a substantial injection of public money is closed and ACOA is scrambling for repayment of a no-interest loan in excess of $100,000.
Collapse of the cheese plant has left behind a trail of angry and confused milk producers. Rural Delivery has now learned the quick demise of the company created just as much confusion within ACOA.
Rural Delivery has obtained more than 400 pages of internal ACOA documents relating to the contract with La Ferme d’Acadie under the federal Access To Information Act. More than 100 of those pages were blank. The Agency refused to release a complete picture, claiming some of the documents were proprietary information of the now-defunct company.
The remaining documents, however, provide a trail dating from the time of La Ferme d’ Acadie’s original application for assistance from the Agency, through to the collapse of the company in the spring of 2000. These shed some light on why the company failed. They also provide a glimpse inside the workings of an agency that handles hundreds of millions of taxpayers’ dollars.
American partners Daniel Abel, Charles Leary, and Vaughn Perret began the process of securing ACOA funding for the cheese-making venture in 1997, about a year after purchasing a picturesque property, including a small island, at Chebogue Point, Yarmouth County. On February 25, 1998, the provincial Department of Agriculture handed the American partners a milk quota. An undated Project Fact Sheet produced by ACOA shows La Ferme d’Acadie had start up Costs of$253,900.
This included $185,000 for building construction; $43,900 for machinery and equipment and $25,000 for marketing. ACOA agreed to lend the company $133,200 interest free to help with those costs. In return the American partners promised to create four jobs and generate sales of $378,710 worth of European and other specialty style cheeses by its third year of operation. The company’s job and sales projections were modest. Nevertheless, documents show La Ferme d’ Acadie was unable to generate the sales needed to maintain its small workforce.
ACOA’s contribution to the venture included half of the company’s capital costs, which amounted to $114,450, and 75 percent of its $25,000 marketing costs. The company also became eligible for a 10 per cent federal tax credit of$22,890, bringing the anticipated total government contribution to $156,090. At the end of the day taxpayers would cover 61.5 per cent of all start-up costs for a company that is believed to have operated for less than a year.
Stay tuned for Part 2 tomorrow.
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