Nova Scotia announces $35M in loan guarantees for 3 large tourism operators

Three large tourism operators in Nova Scotia are getting loan guarantees from the province totalling $35 million.

The loan guarantees were announced Monday, six months after the province announced it would offer as much as $50 million for up to 11 companies whose revenues have suffered due to the COVID-19 pandemic.

Finance Minister Labi Kousoulis said the three companies announced Monday were the ones that made it through the entire process.

The Cabot Links golf resort in Inverness can access up to $14.25 million. Halifax-based Ambassatours Gray Line and Murphy's on the Water can access up to $11 million, while Coach Atlantic, which has offices in Halifax, Dieppe, N.B., and Charlottetown, can access up to $9.5 million.

The government is providing the three companies standby letters of credit that can be used to secure loans. It guarantees the borrowing amount up to 95 per cent and the interest rate cannot exceed the prime lending rate plus 1.5 per cent.

Taxpayer money protected

In a news release, Ambassatours CEO Dennis Campbell said the loan guarantee program is about providing flexibility to operators, and the public has nothing to worry about.

"I am willing to bet my career and reputation that this program will not cost taxpayers one dollar because the companies that were chosen were pre-COVID strong and were meticulously vetted by [the Nova Scotia COVID-19 recovery council] and our banks," he said.

The program drew criticism when it was announced last fall, in part because it was learned that it started as a lobbying effort.

AllNovaScotia.com reported at the time that the loan guarantee program was similar to one advanced by a group of large tourism operators, which included Ambassatours and Ben Cowan-Dewar of the Cabot golf courses.

Lobby effort helped create program

The lobbying efforts were spearheaded by Kristan Hines, a senior vice-president at National Public Relations and a former chief of staff to then-premier Stephen McNeil. 

Kousoulis said he couldn't comment on how the program came about because he'd left cabinet at that point to seek his party's leadership, but he said he's comfortable the public's money is protected.

If the companies did file for bankruptcy, the assets the government would get are worth far more than the loan guarantees, he said.

NDP Leader Gary Burrill had no comment on what companies received support or how much, but he said the way the program came about further highlights a long-standing problem in the province of not having a lobbyist registry that is accurate and up-to-date.

"Our lobbying registry hasn't got any effect and our lobbying registry doesn't have any teeth," he told reporters at the legislature. "So these things are problems."

Preventing risk to tourism sector

Kousoulis said the program is a lifeline, in particular, for Ambassatours and Coach because of how reliant they are on tourism, including the cruise ship industry.

"Their revenues have pretty much been completely wiped out," he said.

The minister said he'd been concerned about recouping infrastructure and the impact on the tourism sector if the assets of either company were to be liquidated or sold off to keep them afloat. It would have left "a very large gap and void" in the province, he said. 

Kousoulis said the remaining money announced as part of the loan guarantee program has been diverted to the recently announced property tax rebate programs for restaurants and accommodation sites.