FOR IMMEDIATE RELEASE
ISLANDERS DESERVE AN EXPLANATION ON PROVINCE’S BORROWING: NDP
February 13, 2012
CHARLOTTETOWN – The NDP is asking the province to explain a $700
million loan in treasury notes borrowed on January 24th, according to
the order in council’s minutes for that day.
Treasury notes, or t-bills, are securities that can be taken on a
province’s or corporation’s assets. It’s a debt obligation sold to
investors until the time the province can pay them back. The $700
million’s worth of Treasury Notes is equal to about half of the
province’s operating revenue. The terms of the agreement say that the
province is responsible for paying the $700,000,000 back by the end of
the year.
The Financial Administration Act was used to grant the loan, according
to the Order-in-Council document. The decision states:
1988, Cap. F-9 authorized the Minister of Finance, Energy and
Municipal Affairs to borrow up to seven hundred million dollars
($700,000,000.00) by issuing Treasury Notes on behalf of the province
for a period not exceeding twelve months.
Federal NDP Executive member Joe Byrne is asking for an explanation
from the province. According to Byrne, Islanders need to know what is
really happening with the province’s finances.
“The NDP is asking the premier to be forthcoming about what’s going on
financially for the province,” said Mr. Byrne. “The government has
to provide more transparency on this type of a transaction. 700
million is a huge amount of money that deserves to be clarified.
Especially in light of the announcement of a 3% cut to most
departments.”
Mr. Byrne adds that dealing in treasury notes is unusual for the
province. The last time PEI took out a loan via Treasury Notes was in
2004, two months after the Polar Foods Sale to Ocean Choice. That
year, the deficit was $85 million.
“We’re just asking that the province explain why we’re taking out more
debt and explain how they’re going to pay it off in a year, as per the
terms of their agreement. Islanders have the right to know how much
additional interest debt this deal is costing us.”
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For media inquiries, contact Joe Byrne
(902) 367-8228
joebyrne@eastlink.ca
