Liberals changed rules to lend $224-million to MaRS, committee hears
The Ontario government quietly changed the rules of a public loan program expressly to give money to MaRS, underlining the effort the province made to use tax dollars to help the research incubator salvage a failing real estate deal.
In 2011, the province gave MaRS a $224-million loan, with a monthly interest rate of between 2.44 and 2.57 per cent, to save a plan to build a new office tower at University Avenue and College Street in Toronto. But MaRS did not actually qualify for the loan from Crown corporation Infrastructure Ontario. So the Liberals rewrote the rules.
The MaRS project was a unique situation, and the government made decisions to ensure that [the office tower project] did not collapse, Economic Development and Infrastructure Minister Brad Duguid said on Wednesday. And part of that was making a decision as to whether we would ensure that MaRS was eligible for that infrastructure program.
Mr. Duguid said the government stepped in because MaRS could not get financing from the private sector. Private lenders, he said, wanted the project to have most of its tenants signed up before they would support it. The tower is still only about one-third full.
It was a proposition that was very challenged, he admitted to reporters after a legislative committee hearing during which he discussed the governments rule change.
Even with the loan, MaRSs project fell apart, because the organization could not find enough tenants. The government bailed it out again this year. Mr. Duguid is considering moving bureaucrats into the building and paying MaRS taxpayer-funded rents to help it repay the loan.
In committee hearings this week, the Liberals have blocked the release of documents related to the MaRS loan and bailout. Among other things, the Grits refuse to release the business calculations Infrastructure Ontario did when evaluating MaRSs loan request. Mr. Duguid has said such calculations may not even exist.
NDP MPP Percy Hatfield accused the government of secrecy.
If you are doing this sort of thing, you should be upfront, fully accountable, fully transparent, he said. Tell the taxpayers: this is how were spending your money, this is why were spending your money in this fashion, and this is what we hope to achieve by it.
Progressive Conservative MPP Ted Arnott said the Liberals had clearly hidden some aspects of the bailout before the provincial election.
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Liberals changed rules to lend $224-million to MaRS, committee hears