The controversy behind a remote town’s stimulus project - Macleans.ca
 

The controversy behind a remote town’s stimulus project

Ottawa’s $1.1-million deal with a Quebec hotel sparks cries of favouritism


 

Geoff Howe/CP / Stéphane Voyer

Havre-St-Pierre on Quebec’s North Shore is famous for its whale watching, though getting there is almost as much of a trek for tourists as it is for humpbacks. A 15-hour drive from Montreal, the town tends to attract only the hardiest of nature lovers.

Still, local businessman Daniel Dresdell recently opened up a 100-room, three-star hotel in the town—convinced, he says, that tourists will flock to the town of 3,280 if they have a decent place to stay. Apparently, the federal government is convinced as well: last December, the Conservative government financed 20 per cent of Dresdell’s project to the tune of a $1.1-million two-year interest-free loan, just one of the fiscal stimulus measures of its Economic Action Plan. “Tourism contributes significantly to the socioeconomic development of Quebec’s regions and the well-being of their residents,” said Conservative MP Denis Lebel at the time.

“There is a small core of tourists who were coming and finding there was nowhere to stay, so they would stay elsewhere,” Dresdell told Maclean’s. “My hotel is changing that.”

But others believe that Dresdell is capitalizing not on the trickle of whale watchers but on the huge influx of workers from Hydro-Québec’s massive Romaine dam project nearby—and that the $1.1-million loan amounts to government favouritism. “It’s a stupidity,” says Gilles Boudreau, who runs the L’Archipel hotel. “We already have tons of hotels in the area. This isn’t for tourism.”

Havre-St-Pierre does indeed already have 12 bed and breakfasts and tourist hotels with nearly 160 rooms between them. Boudreau says occupancy is way down.

Dresdell’s timing is certainly canny. Construction on the hotel started a month after ground was broken on Hydro-Québec’s $6.5-billion project, which will be completed in 2017. According to Quebec’s business registry, the hotel is described as a “hotel for workers.” (“I’m going to have that changed,” Dresdell said when informed by Maclean’s.) He owns several other area businesses, including the town’s only grocery store. He says his business interests employ 175 people from the town.

The hotel, which includes a 200-person cafeteria and a bar capable of hosting 112 revellers, was built by Groupe Secto, a construction company specializing in mobile offices and large-scale worker camps. It has a history of outfitting Hydro-Québec; it built two camps for two of the energy giant’s largest projects. The hotel’s parent company, Complexe MV Inc., actually received the government loan after the hotel was built, mere weeks before it began taking reservations. (An Economic Development Agency of Canada official recently told Maclean’s the delay in payment was due to the size of the project.) Secto and Complexe MV Inc. actually share some staff: Marcel Maltais, Secto’s director general, is also vice-president of Complexe MV Inc.

Boudreau, for his part, says the region’s smaller hotels haven’t seen much of the business clientele associated with Hydro’s project. “They’ve been subsidized by the federal government to bust our teeth,” says Boudreau of the new hotel. “Our phone isn’t ringing.”

Dresdell says he needed the government money to get him through the first lean years. “You try to fill a 100-room hotel with just tourists in the first year,” he says. Roughly 50 per cent of the hotel is currently rented to workers from the Hydro-Québec project, he says; though he expects tourist traffic to pick up in the next two or three years. “I’m a businessman, and as a businessman I’m here to fill up my hotel rooms. Of course I’m going to use my contacts to try and get business.”


 

The controversy behind a remote town’s stimulus project

  1. Another hotel in Quebec siphoning money from taxpayers to favored and connected constituents. This is news?

  2. Auberge Grand-Mere redux?

    • A problem with history? Here is a reminder of the Liberals in action.

      Beaudoin was the guy who had the gall to say "no" to Chretien in 1996 and was nearly destroyed as a result. Beaudoin refused to approve a $1.6-million loan to Chretien's associate, Yvon Duhaime, a convicted criminal with a bad credit history and the owner of the Grand-Mere Inn in Chretien's Quebec riding. This is the inn Chretien once co-owned and was adjacent to a golf course Chretien was still owed money for.

      Even though Chretien repeatedly denied to the public that he lobbied Beaudoin to give Duhaime a $1.6 million loan, he was later forced to admit that he did. Outraged that he could not control Beaudoin, Chretien appointed two loyal cronies to the BDC–Jean Carle, Chretien's former director of operations became the bank's VP of public affairs, and Michel Vennat was appointed chairman of the BDC.
      http://paulsrants-paulsstuff.blogspot.com/2010/08

  3. 'a $1.1-million two-year interest-free loan'. Assuming the money is paid back in two years — what is the cost to the taxpayer? $50,000-$60,000 ? As a taxpayer I am hoping the venture proves to be an enormous early success.

    • As a taxpayer, I am wondering why the risk on this venture is being taken.

      • As a taxpayer, I am wondering where the millions of dollars still missing in the Liberals' Adscam scandal are being hidden.
        This at least is a loan, with long-term benefits for local taxpayers in the region through expansion of the commerical tax base and a draw for tourism; the Liberal fiasco, by comparison, was a straight-out heist, where the only beneficiary was the Liberal Party of Canada.
        What about it Libs? Can we taxpayers have our stolen millions back?

        • Adscam has as much to do with this as Sir John A's Pacific Scandal. Stay in this century, okay?

          The point of the article seems to question whether this expands the commercial tax base or just redistribute money to a Harper supporter and whether it will draw tourism into the province or just draw it away from other hotels in the area. Those are legitimate questions.

          Another legitimate question one might ask is what happened to all the conservatives in the Conservative Party? I had no idea corporate welfare was so widely supported so I am quite surprised.

          • Yes, supporters of the Liberals often default to Adscam being 'old history'. As if those still-missing millions of taxpayers' dollars should just be forfeited and the Libs (many still serving in Parliament, I might add) that appropriated them for the furtherance of the Natural Governing Party should just get a wink and a nod for it.
            What's your home address, tedbetts? You obviously don't mind people stealing from you. And I could use a plasma-screen TV. Oh, and a Blu-Ray, if you have one.

          • Yes, supporters of the Conservatives often default to Adscam being more relevant than the topic being discussed whenever the topic being discussed makes the Conservatives look bad (a common occurence these days and increasingly so). Change the topic. Lie. Conceal. Fabricate. The Conservative Way!

            So much so that we even have a term for it: DefCon6 as in –
            DefendConservatives1 – If an issue arises, say it's a non story
            DefCon2 – If the issue won't go away, then blame the media
            DefCon3 – If the issue still won't go away, then blame the Liberals
            DefCon4 – If the issue still won't go away, then blame a bureaucrat or provincial premier
            DefCon5 – If the issue still won't go away, then blame a staffer
            DefCon6 – If the issue still won't go away, then start talking about Adscam, coalitions, broken GST promises and the NEP

          • Ok, here goes: A repayable federal loan to develop rural tourism facilities in Quebec's north is a fair economic stimulus measure, for both the region and the Canadian taxpayer. The only 'controversy' about this is what a leftist 'reporter' is attempting to generate.
            There, now that I've addressed your topic, how about addressing mine? The questions are pretty straight forward: Do you like money being stolen from you? Do you support political parties taking taxpayers' money into their personal coffers? Would you, as a taxpayer, like to see the Liberal Party reimburse Canadians for the money that was taken from them illegally?
            There's a lot of questions there you don't seem to want to answer. If a Conservative Government perpetrated an Adscam, would you so willingly forgive that party the way you've seemingly forgiven your Liberals?

          • The "stimulus" here will take jobs away from private companies who are already established in the area but who may not support the Conservatives. It is also not based on market terms so doubly unfair to small business owners in the area who aren't benefitting from Harper's largesse. This is assuming the loan is ever collected.

            This is a sop to HQ and CPC friends. Period. There is no net economic benefit. It is taking from Paul to pay Peter.

          • And even if it isn't partisan stupidity, it is still stupidity. For all the market-distorting reasons you eloquently cite.

          • Ah Gee guys, have you never lived in Quebec? This is normal.

          • What political party, country adheres to your non-Keynesian philosophy? You prefer Friedman a more libertarian free market?

            Which political party in Canada is the closet to a free market ideology?

            Both the US/Canada exchange rate and the TSX index are driven by the energy price, leading to a moderately high positive linear correlation of the two series. The e¤ect of the short term interest rate di¤erential is asymmetric, caused primarily by the asymmetric intervention of the Bank of Canada. When the energy price index decreases, the Canadian dollar depreciates and the TSX index drops, leading to the lower tail dependence during the economic downturn period. In this case the Bank of Canada does not intervene since the low value of the Canadian dollar is good for Canadian exports and employment. Thus there is no need to use macro policy to reduce the lower tail dependence. However, when energy prices are very high, both the Canadian dollar and the TSX index will rise a lot, leading to the upper tail dependence. However, too high energy prices and the appreciation of the Canadian dollar reduce exports. In this case, the Bank of Canada will intervene by decreasing the Canadian interest rate, thereby containing the appreciation of the Canadian dollar. These movements of the two series will tend to reduce the upper tail dependence. These arguments provide a reasonable explanation for the observed dependence structure in the lower an upper tails of the joint distribution of the TSX index and the U.S./Canada exchange rate.

            http://www.ryerson.ca/economics/seminars/paper071

          • As for the rest of your nonsense, it is nonsense and your own bitter hatred that has invented an alternate universe.

            If/When the Conservative government perpetrates an Adscam AND they called the RCMP to investigate them fully (would never happen under Harper), AND they called a full inquiry into their own activities (would never happen under Harper), AND they paid back the money the judge concluded they owed (which the Liberals did), AND we kicked them out of office (as we did), AND it was 15 years since the Conservative Adscam happened, AND all of the political operatives were long since gone, AND not forgiving them meant more undemocratic, unaccoutable, incompetent, fiscally irresponsible, big spending, deficit-producing government… then yes, of course, I would forgive them.

            Should we all still be holding a grudge for Sir John A's Pacific scandal? What about Dief's Munsinger Scandal? How about forgiving Airbus and $300,000 secret cash payments (that we know of)? After a decade or so, you learn to move on. Canadians have. You should too.

          • lol Liberal Adscam! I'm neither Lib nor Tory nor anything else just yet.
            However, I do know one thing. I'd like Canada to stay just that: Canada.

            Maybe our friend Ceeger would've prefered the Libs let Quebec seperate
            in 1995 so that today, we'd be part of the United States of North America.

            The Libs payed dearly for their mistakes. Now to move on and let's have a frank
            and intelligent discussion about the Con's blatant cynicism across the board.

          • Gee, no partisan presuppositions evident in how you like to have "frank and intelligent" discussions, eh?

          • A frank and intelligent discourse must include, as a matterof political tradition, throwing mud in the other guy's eye. If you get one or more parties, it is hard to throw dung without getting some on yourself. TYhat's why we have four parties and counting; you're bound to hit something that way.

          • If Canadians have moved on, as you assert, then the polls certainly haven't shown it. The criminal activities employed by the 'Natural Governing Party' has stripped them of that title probably forever and has made Canadians naturally wary of appointing thieves to govern over them again. That party is so badly compromised in the eyes of honest Canadians that only partisan drones can't recognize it.
            Also, I love your condition about the money 'paid back' as is determined by a judge! You and I both know the Liberals 'paid back' only a small fraction of the vast amount of money that is still unaccounted for in Adscam. And how can you even seriously call it 'pay back?" That implies that it was a loan, with conditions. Let's at least call it what it was, money stolen from Canadians. Not only should Canadians be reimbursed for what was taken from them, but the Liberal Party should pay damages on top of that – just like any white-collar fraudster criminal.
            I know it is useless to try and change your mind, so I won't. Hopefully the exchange above at least highlights for other readers here the avoidance tactics and hypocrisy so routinely employed by the left to justify criminality on the part of their favored sons.
            PS: I didn't know I could create alternate universes, as you assert. Why, then, is Jessica Alba not my mistress? That would be the kind of universe I'd like to live in, could I invent one.

          • If Adscam explains why so few Canadians support the Liberals, then what explains why so few support the Conservatives? Must be that lingering anger over the Pacific Scandal, eh, that it remains so badly compromised in the eyes of honest Canadians that only partisan drones can't recognize it, eh?

            I think you only read about Adscam in the headlines and blogs to make comments like you have. The Liberal Party paid back all that was taken by their operatives. The Canadian government (and the Liberal Party itself you know) were defrauded of additional money, 'tis true, and the RCMP continue to investigate.

            What avoidance do you speak of? We were discussing the use of taxpayer money by today's government. You tried to veer us into a discussion about an even that happened about 15 years ago, three PMs ago, 5 Liberal leaders ago, and was fully investigated. It was a weak effort to distract so it may not even really count as avoidance, but a little lame you accusing others of that (especially when your lies about Adscam have indeed been answered here).

          • Leave Ceeger alone. He got 35,000 Economic Action Plan dollars to build a gazebo in his yard and if he posts enough on message boards he's hoping to get $60,000 more for an infinity pool.

          • yes, tedbetts, but the awful taste in the mouth lingers. But then as I said, that is normal for politics in Quebec. What is the point of having a rich uncle if he can't help out his relatives?

          • Teddy, in 2000 the Liberals looked invincible.

            The NDP, Greens support rebounded in the last few years eliminating the support for the Liberals.

            Your arrogance is suggesting voters can only vote for the two front runners. Voters have many options including sitting on their hands and not voting for their traditional party.

            You have failed to score any points. You have not apologized for the lack of respect for taxpayers by the Liberals during the Chretien-Martin decade of darkness.

            You ignore the massive export boom into the US as the collapse of our dollar during the Liberal's reign.

            This project might be an issue for Liberal partisans as was the $ 57k water effect.

            Reality vs Perceptions
            The Conservatives took in $4.1 million in donations between April 1 and the end of June, compared to $2.4 million for the Liberals, NDP and Bloc Quebecois combined. For the Conservatives it is their best second quarter result since coming to power in 2006, despite months of negative headlines about deficits, Guergis and the G20. The Liberals raised a total of $1.6 million, down from last year's total of $4 million when they actually out-tallied the Conservatives on fundraising.

            Clearly you have a difficult time with facts.

          • tedbetts This is priceless. Do I have your permission to use it elsewhere?

          • You not only have my permission, you have my encouragement!

  4. Another Non Story attempting to Smear The Tories biline should under Wherrys name………

  5. Adscam will look like a pee in the ocean once the AGs report gets out!

  6. Is there controversy behind the sun rising in the East?

    Is there controversy over the atomic make-up of a molecule of water?

    Is there controversy over government money being misspent on a favoured business to distort a market?

    It will someday stop being cute that people repeatedly express shock and outrage that massive government spending might include garbage like this. It's almost like everyone's grey matter gets shaken like an etch-a-sketch every night. Maybe all-caps will leave a mark on the screen that will linger: PEOPLE! THIS IS WHAT GOVERNMENTS DO WITH GOBS OF CASH, IF WE LET THEM! PLAY OUTRAGE ALL YOU LIKE, BUT FOR PETE'S SAKE STOP WITH THE SHOCK AND SURPRISE!

    • There was an error in your post. It should read as follows:

      PEOPLE! THIS IS WHAT CONSERVATIVES DO WITH GOBS OF CASH, IF WE LET THEM! PLAY OUTRAGE ALL YOU LIKE, BUT FOR PETE'S SAKE STOP WITH THE SHOCK AND SURPRISE!

      • Sunshine Coaster! Telephone! Shawinigan Golf Course & Hotel manager on line 1. Newfoundland cucumber greenhouse accountant on line 2. CEO of Bombardier on line 3. Public and Government Relations Office of VIA Rail on line 4…

      • THIS IS WHAT HAPPENS WHEN YOU STUPIDLY FORCE CONSERVATIVES TO SPEND MONEY THAT THEY DON'T WANT TO BECAUSE IT'S THE FLAVOUR OF THE DAY. CONSERVATIVES WILL INTENTIONALLY SPEND DRUNKEN MONEY ON DRUNKEN ITEMS ENTIRELY TO SPITE THE STUPIDITY OF LIBERALS.

        • Ha! Take that Liberals!

          These are exactly the qualities I look for in a governing party; drunk, spiteful, stupidity.

    • 100% in agreement with you on this. Favouritism is never going away. And in way, that's a good thing, if there wasn't favouritism we'd be machines!

  7. For any problems with the stimulus, please see: the liberal coalition that would have destroyed Canada.

    Thank you.

    When you force someone to spend like a drunken sailor when they're a competent manager, what do you expect to happen? It's better that Harper pretend to be a drunken sailor than actually have one running the country.

    I lay 100% of the blame for any stimulus problems on all liberals and 100% of any success stories that may possibly arise from the stimulus on the conservatives. If you don't like it, too bad.

    • I have come to the conclusion that you have scared off the NDP and Greens.

      Two Greens came to the door the other day. They have to go in pairs because one can read and the other can write (adapted from an old Air Force Polliceman line.)

    • Poor judgment and poor taste. harper attracts people with both these characteristics, not to mention, the woefully ignorant and the blatantly uninformed……

  8. I am looking forward to the audit on the EAP.

  9. If it gets even one vote away from the bloc it is worth it to the cons.

  10. I'm posting this using the hotel's fast wireless internet sitting in the comfy beds watching the flat screen tv. Thanks governement of canada!