Regarding the recent $10million loan to Loewens Windows...
Kudos to Loewen for wanting to provide employment.
Shame on the powers that be for supplying our taxpayer money to finance this. My reasons are as follows...
Sure it's a repayable loan, but isn't that what banks are for? If the province steps in as a lender, are they going to follow the US banking model of just shovelling out the cash because it is for the overall good? and if in need of more money, just raise taxes? If the business has strong merits, bank financing should not be a problem. The Industrial Opportunities Program's guideline is $300K to $5 Million, but could be higher as per their website. Repayment terms are 60 months. So... they gave out $10 million? Hmm... has the payback been stretched out as well?
Loewen laid off 170 people last year .... why? because of the poor US economy and the housing slump. Now they want to double production and streamline operations. Where is their market and who are they going to sell to? Has anyone read the news about the Canadian housing market barely hanging on? Sure this deal is great for Loewen, but what about all the other window and door manufacturers who employ THOUSANDS of people in the province? Duraco, Paramount, Accurate are just a few of the big names that could be adversely affected. Will they be able to go to the public trough for help because precedent has been set? Certainly a good case for approval is set up for their benefit.
An apparent advantage for Loewen to meet lending criteria is they have to provide employment. Easy enough... just hire back the people they laid off - but does it really help the average person, or does it mostly benefit the owners?
You only have to look south of our border to see what happens with loosey goosey money management. The Automakers all seek bailout to the tune of billions of dollars. Reality is, and it has been mentioned by top financial analysts, the North American Auto sector does not have a sustainable business model. So, yet again, hail the taxpayer to come to their rescue.
We hear about our Canadian manufacturing sector being hit hard over the last year because of the rising Canadian dollar, relative to US exports. Has anyone even asked the question or researched the internal problem? My opinion is - if your only margin of profit and sustainability is the currency exchange, then do you really have a sustainable business model?
I recall the Palliser/Defehr equity swap with loans/buyouts supplied with our taxpayer money. Not sure of all the details - or who REALLY benefited out of this deal - but was this a good deal overall? Again I bring up the point that the currency exchange has had a devastating effect on the furniture export business across Canada - so do they really have a sustainable business model?
Pity the factory workers that have been laid off at these local furniture manufacturers over the last year or so. Maybe the solution is to go to the public trough, access taxpayer money to expand, and hire back all those laid off employees so they are compliant with loan provisions. Their new streamlined business will increase production, be more competitive in the marketplace and increase their sales. (Pity the other manufacturers)
Novel idea isn't it?? First application in gets the most, last one in gets denied and goes bankrupt!
Am I the only one concerned about this?