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Minister of International trade Ed Fast responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Friday, April 27, 2012. Fast is returning home from a week-long visit to Australia and New Zealand with hope but no firm commitment that Canada will be accepted into the world's hottest new trading bloc. (Sean Kilpatrick/THE CANADIAN PRESS)
Minister of International trade Ed Fast responds to a question during question period in the House of Commons on Parliament Hill in Ottawa on Friday, April 27, 2012. Fast is returning home from a week-long visit to Australia and New Zealand with hope but no firm commitment that Canada will be accepted into the world's hottest new trading bloc. (Sean Kilpatrick/THE CANADIAN PRESS)

Tories suspend international business program after audit reveals 'irregularities' Add to ...

The Harper government is suspending a $20-million program that promotes Canadian business investment in developing countries after auditors uncovered what Ottawa is calling financial “irregularities” in some projects.

It’s bad timing for the Trudeau-era Investment Cooperation Program, the utility of which the Conservatives were already scrutinizing during an era of belt-tightening in Ottawa.

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International Trade Minister Ed Fast said he first learned of trouble at INC in early March following preliminary audits of a sampling of projects in the 2008 to 2011 period.

“Departmental officials have been authorized to seek recovery of taxpayer dollars wherever warranted, and if appropriate, to refer matters to law enforcement for possible further investigation,” Mr. Fast said.

The INC program is more than three decades old, dating back to 1978, and currently has about 200 active projects around the world.

It has supported investments from a farming venture in Cameroon to an aluminum factory in Honduras and was run by the Canadian International Development Agency before being shifted to the Department of Foreign Affairs and International Trade in 2010.

The Harper government says it cannot identify the companies or projects under investigation for legal reasons.

Further probing will determine whether the audit findings have uncovered fraud or merely sloppy accounting, officials say.

Ottawa says the projects in question represent 3.5 per cent of the program’s annual budget.

It has uncovered about $300,000 in irregularities, including missing paperwork or duplicate charges for items such as airline tickets, hotel bills and employee time sheets.

Mr. Fast said on March 30 officials told him that finalized audits confirmed the irregularities and that the government had suspended funding to all associated projects. He said at the time he asked the department to prepare a plan to “freeze the entire INC program.”

The trade minister said he’s now proceeding to do just that.

Mr. Fast said the INC initiative will remain suspended until a fundamental review of the program, including its internal controls, is completed. That won’t be until the 2012-13 fiscal year.

“In the meantime, I have instructed departmental officials to continue with their audits and investigations to ensure all taxpayer dollars were received and expended appropriately.”

The INC program offsets the cost of doing business in developing countries through measures such as underwriting studies on the commercial viability of an investment or subsidizing financial analysis or environmental management plans.

During the suspension of the INC program, no new applications for support will be accepted. The freeze will not affect projects with signed contribution agreements already inked.

In the 2011-12, the program contributed $3.9-million in support of developing country investments.

Each year about 10 projects are audited.

Follow on Twitter: @stevenchase

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