Funding from ACOA for limestone aggregate producer criticized

Daniel
Daniel MacEachern
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Gerry Byrne

Recent funding to a Newfoundland limestone aggregate producer from the Atlantic Canada Opportunities Agency (ACOA) has drawn criticism from a Liberal MP and the recipient’s competition.

Last month, NCL Holdings of Cormack received about $438,000 from the agency to modernize and expand its agricultural limestone operations. NCL president Pansy Cross said the money would be used to buy two crushers to replace the aging equipment it was using at its quarry. NCL also received $247,500 from ACOA in September 2011 (with documentation noting other public-sector sources), and a $3,375 grant in 2010 for the preparation of a business plan.

Gerry Byrne, Liberal MP for the region, said he was concerned the money would give NCL — which also produces crushed stone and sand — an unfair advantage over its competitors. NCL last week renewed its five-year contract to supply bulk agricultural limestone to provincial farms.

“Whenever financial arrangements are made from public sources to a private-sector company, competitive impact analysis is normally front and centre on such a decision,” said Byrne.

He said it’s even more important for long-established industries like the construction sector, including the production of aggregates for road-building and other activities. Byrne acknowledged there are no other provincial producers of agriculture limestone, but said the funding will assist NCL in more than just limestone aggregate production.

“Whether or not the proponents themselves intend only to remain in the agricultural limestone business or whether or not they’ll use the two pieces of equipment to get into the production of aggregates for the construction industry, I guess time will tell.”

A Cormack-area competitor, who spoke on condition of anonymity, said the government funding gives NCL an unfair leg-up.

“If a company is getting money from a government, that everybody else is out working and has been in business for 40-plus years … it’s pretty unfair,” he said.

“I’m buying my crushed stone off of Humber Valley in Corner Brook for my cement plant because I don’t want to go and put myself in the hole to get a new crusher. But if a government’s going to be giving out money for crushers, I don’t see why I shouldn’t get one.”

See OUTSTANDING LAWSUIT, page C2

Outstanding lawsuit against company

The competitor said he hasn’t applied for government funding, and that his complaint isn’t just sour grapes.

Also at issue for Byrne and the competitor was a supposed outstanding lawsuit against NCL, which, if successful, would hinder the company’s ability to repay the loan.

Court documents obtained by The Telegram indicate a statement of claim was filed in Newfoundland and Labrador Supreme Court in late 2008, alleging NCL Holdings had quarry permits transferred to it from Island Aggregates in an effort to protect the assets from Island’s bankruptcy that year. But there has been no followup legal action and the lawsuit is considered dead by ACOA.

A request for an interview with an ACOA representative was turned down, but the agency provided a written statement

“NCL is the only supplier of bulk agricultural lime to the agricultural industry in Newfoundland and Labrador, and in March 2012, entered into a five-year contractual agreement with the Government of Newfoundland and Labrador under its Provincial Agricultural Program to provide agricultural lime for provincial farms,” reads the statement, emailed by ACOA director of public affairs Doug Burgess.

“The equipment purchased by the company is standard crushing equipment that can be used for other applications. ACOA’s loan to NCL is going towards the replacement of two older crushers to enhance the company’s existing agricultural lime operation. The balance of financing for this project is provided through a loan from a commercial bank.”

Pansy Cross, president of NCL Holdings, also declined to be interviewed for this story, but emailed The Telegram a statement that noted the loan provided funding to replace old and inefficient equipment, and that NCL was the only company to bid on the provincial contract.

“NCL Holdings continues to be a Newfoundland and Labrador owned company that operates solely in Newfoundland and Labrador. We employee 20 employees and provide a valuable service to the farming industry,” wrote Cross.

dmaceachern@thetelegram.com

Twitter: @TelegramDaniel

Organizations: Atlantic Canada Opportunities Agency, Liberal MP, Holdings of Cormack NCL Holdings The Telegram Newfoundland and Labrador Supreme Court

Geographic location: Newfoundland and Labrador, Cormack, Humber Valley Corner Brook

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Comments

Comments

Recent comments

  • Brandy Anyone?
    March 13, 2013 - 12:47

    Interesting that NCL and ACOA declined an interview. That tells a lot. Kickbacks?? $688,875 is a lot of money.

  • Joe
    March 12, 2013 - 17:31

    Gerry Byrne should keep his nose out of this one as I believe his uncle is Peter Byrne one of the co-owners of Humber Valley Paving. Clear conflict of interest. The article states that NCL Holdings "received" $ 438,000 but please be specific as I believe it was loan not a gift or grant as the readers are left to believe.

  • T. Sleeveen
    March 11, 2013 - 09:27

    Wow, Gerry Byrne criticizing ACOA, Really? Before he was let go as minister resopnsible for ACOA years ago, he poured money into his riding and ignored the rest of NL and Atlantic Canada. What a hypocrite!!

    • Concerned citizen
      March 12, 2013 - 11:22

      Why have ACOA at all if this is what we get. It’s ridiculous that ACOA is pouring money into this company year after year. Careless decisions.. wasteful spending. Thank-you to Mr. Byrne for doing his official Parliamentary duty as ACOA Critic.

  • Phil MD
    March 09, 2013 - 20:11

    Good on Gerry for keeping them Honest!!

  • Rob
    March 09, 2013 - 15:39

    This is a great article, but it makes my blood boil. These guys can't stay afloat on their own and are using taxpayers money to keep their equipment up and running. What a joke. ACOA should be strung up for this.

  • East coast Mike
    March 09, 2013 - 13:33

    Why are taxpayers funding this company year after year. Very creative how they managed to get funding to subsidize other operations on the back of the agricultural industry. Whoever approved this application should be included with the provincial job cuts.

    • Jeb
      March 10, 2013 - 18:58

      You got it a$$ backwards. They're not subsidized on the backs of the agriculture industry. The price of limestone is subsidized to the farmers.

  • Deer Lake Resident
    March 09, 2013 - 12:41

    I like the one that the contractor is complaining because they don't want to go in the hole to buy a crusher..will they are not free. All ACOA loans have to be repaid. Business is about risk taking. At least this company employees 20 people, in a province where so many people are being laid off and having to go out of province for work.

    • Risk?
      March 11, 2013 - 04:03

      The level of risk is minimal when getting interest free loans for equipment upgrades to compete against other companies in the area. NCL is on a social program.

  • Eyes Wide Open
    March 09, 2013 - 12:05

    I guess the Crosss' got a little upper hand on Gerrys buddies! Pretty brave to be making issues about that in public, especially give his track record in his ACOA days.

  • Happily Retired
    March 09, 2013 - 11:45

    ACOA is only a PR vehicle for politicians to use in order to announce funding, get their faces in front of a mirophone, and to be seen in a positive light. All opposition politicians hate it, but then use it in the same way when they assume power. Sounds like the Senate, doesn't it. If a business is truly deserving of funding, it should get it from a non- government source.

  • too funny
    March 09, 2013 - 09:18

    Gerry Byrne complaining about how ACOA spends money. Now that's funny.

  • david
    March 09, 2013 - 08:57

    This is the inherent, fundamental problem with government subsidies of anything. Anytime. And to selectively choose when and which ones to protest and get outraged driven by nothing more than politics and special interest lobbying (while thumping ones chest and talking about "competition and a fair playing field") , is the other side of the exact same, unprincipled coin.

  • Foghorn Leghorn
    March 09, 2013 - 08:54

    The icing on the cake is that form what I am led to believe the defunct Island Aggregates and the new NCL Holdings are essentially the same company. It was nothing more than a paper shuffle to get rid debt. Now they have received almost $700,000 in government funding ..... Things that make you go hmmmmm!