Nunavut suspends operations of credit corporation

Nunavut Finance Minister David Simailak has temporarily suspended operations at the Nunavut Business Credit Corp. in the wake of a report released this week by federal Auditor General Sheila Fraser that found the Crown corporation mismanaged some loans and didn't monitor others.

As well, the territory's comptroller-general has asked police to investigate the corporation, Simailak said.

"The comptroller-general of Nunavut has referred financial records and controls to the RCMP for consideration," he told the legislative assembly on Tuesday.

Simailak said he has also accepted resignation notices from three members of the corporation's board of directors, including its chair and vice-chair. Interim members will be appointed to the board in the coming days, Simailak said.

The minister's move came the day after the Nunavut legislature tabled Fraser's report, considered to be the most damning report yet for the eight-year-old territory.

It identified a serious breakdown of basic financial controls at the NBCC, which handles millions of dollars in business loans.

Records for the NBCC were so shoddily kept that Fraser took theextremely rarestep of refusing to approve thecorporation's financial statements for 2005-2006. That fiscal year, the NBCC handed out loans totalling $18 million.

The auditor generalalso found that loans were mismanaged or not monitored, and some agreements were never even signed. More than half of the staff at the NBCC quit while the audit was underway.

The suspension of operations at the NBCC is short-term, Simailak said, while government officials plan to address the concerns outlined in Fraser's report.

Several Nunavut MLAs said the government should have acted sooner to address the problems at the business credit corporation.

"The government has failed," Rankin Inlet North MLA Tagak Curley said Tuesday.

"They did not have to wait for the auditor general to say, 'I can't certify this institution's financial records because I can't find any records' [in order] to act."

Iqaluit Centre MLA Hunter Tootoo said he wants to know why cabinet took so long to take the serious measures Simailak announced Tuesday.

"The government just didn't take any action on it and now to try and save face, they're making these drastic changes," Tootoo said. "It just doesn't make sense."