The Peace Tower is seen on Parliament Hill in Ottawa on November 5, 2013. The federal government is writing off more than $6.3 billion in loans to businesses and students it never expects to collect. (Sean Kilpatrick/The Canadian Press)

The Peace Tower is seen on Parliament Hill in Ottawa on November 5, 2013. The federal government is writing off more than $6.3 billion in loans to businesses and students it never expects to collect. (Sean Kilpatrick/The Canadian Press)

Liberals write off $6.3 billion in loans as part of money never to be collected

That includes student loans and a $2.6 billion write off that came through Export Development Canada

The federal government says it won’t collect $6.3 billion in loans, a figure fuelled by the write off of a nearly decade-old automaker bailout that the Liberals say had no hopes of being recouped.

The Liberals have written off some $3 billion in loans in each of the past two years, but they jumped past that mark in fiscal year 2017-2018.

Key to the jump was a $2.6 billion writeoff that was part of a financing package the previous Conservative government made in 2009 to keep automaker Chrysler afloat and save an estimated 52,000 Canadian jobs during the recession.

In 2011, former finance minister Jim Flaherty said taxpayers would likely never recoup the full value of the bailout when Chrysler repaid $1.7 billion provided to the restructured company, now known as Fiat Chrysler.

There was still a US$1.125 billion loan, excluding interest, sitting on the books to the “Old Chrysler” when the Liberals took office in late 2015.

The company had paid back about $238 million from its original loan, but the Liberals decided to write off the remaining principal and interest in March after officials exhausted every avenue for recovery.

International Trade Minister Jim Carr blamed the terms of the loan set out by the previous government to explain his government’s decision.

“At the time they handed out the loan, they knew it would be 100 per cent written off,” Carr said Monday.

“The ‘Old Chrysler’ did not have an opportunity to pay it back … there are no surprises here.”

READ MORE: Prime Minister pledges to ensure ‘thriving’ dairy industry post USMCA

Separate from the writeoffs, the government is also forgiving other debts to the tune of about $1.1 billion, including nearly $344 million that officials don’t expect to recover from student loan recipients.

Combined, the annual public accounts documents show the Liberals decided in the 12 months ending in March that the government wouldn’t collect $7.4 billion owed the federal treasury — a record since they took office in late 2015.

The detailed accounting documents provide an annual window into how much the government spent in the last year, what it spent money on, and just how much wasn’t spent.

Lapsed spending this year, for example, totalled $10.7 billion, but the numbers in the public accounts are not always big.

A review of the documents shows the government paid $58,803 in damages and other legal claims because of the problem-plagued Phoenix pay system that has left civil servants underpaid, overpaid or not paid at all.

Canada’s auditor general estimated in a report that the government owes underpaid employees some $369 million and overpaid others about $246 million. The total is $615 million worth of pay errors as of March 31, 2018.

The Phoenix fiasco was the “one significant blemish” on the government’s books for the last fiscal year, Michael Ferguson said in his audit opinion about the public accounts.

He said the number of employees affected by Phoenix pay problems has continued to grow.

“The government still has not shown signs that it has reduced the impact of pay errors coming from its transformation of pay administration, which includes the Phoenix pay system,” Ferguson wrote.

Federal books finished in the red last fiscal year as the government posted a second consecutive $19 billion deficit as overall spending across ministries, departments, agencies and Crown corporations hit $332.6 billion.

The deficit for 2017-18 was slightly smaller than what the Liberals predicted in February’s budget.

There are concerns the Liberals’ deficit-spending plan at a time of economic expansion could lead far deeper down the deficit hole in the event of a recession, fuelling criticism from the Opposition Conservatives about the lack of a road map to return to a balanced budget.

Jordan Press, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

Orange shirts, shoes, flowers and messages are displayed on the steps outside the legislature in Victoria, B.C., on Tuesday, June 8, 2021 following a ceremony hosted by the Songhees and Esquimalt First Nations in honour of the 215 residential school children whose remains have been discovered buried near the facility in Kamloops, B.C. THE CANADIAN PRESS/Chad Hipolito
Alberta city cancels Canada Day fireworks at site of former residential school

City of St. Albert says that the are where the display was planned, is the site of the former Youville Residential School

FILE – Perry Bellegarde, National Chief of the Assembly of First Nations, takes part in an event on Parliament Hill in Ottawa on Tuesday, July 7, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Indigenous Peoples Day must be a ‘call to action’, says Assembly of First Nations chief

Discovery of children at Kamloops residential school site must lead to change, Perry Bellegarde says

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Alberta reports 100 new cases of COVID-19

The Central zone sits at 218 active cases

The Government of Alberta identified 115 new COVID-19 cases Sunday, bringing the provincial total to 3,089.
(Black Press file photo)
Red Deer drops to 71 active cases of COVID-19

Province adds 127 new cases of the virus

Police officers and their dogs undergo training at the RCMP Police Dog Services training centre in Innisfail, Alta., on Wednesday, July 15, 2015. Mounties say they are searching for an armed and dangerous man near a provincial park in northern Alberta who is believed to have shot and killed a service dog during a police chase. THE CANADIAN PRESS/Jeff McIntosh
RCMP search for armed man in northern Alberta after police dog shot and killed

Cpl. Deanna Fontaine says a police service dog named Jago was shot during the pursuit

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

Tl’etinqox-lead ceremony at the site of the former St. Joseph’s Mission in Williams Lake, B.C., June 18, 2021. (Angie Mindus photo - Williams Lake Tribune)
‘We are all one people’: Honouring residential school victims and survivors

Love, support and curiousity: Canadians urged to learn about residential schools and their impact

Indigenous rights and climate activists gathered outside Liberty Mutual’s office in Vancouver to pressure the insurance giant to stop covering Trans Mountain. (Photo by Andrew Larigakis)
Activists work to ensure Trans Mountain won’t get insurance

Global campaign urging insurance providers to stay away from Canadian pipeline project

Investigators use a bucket to help recover human remains at a home burned in the Camp fire, Thursday, Nov. 15, 2018, in Magalia, Calif. Many of the missing in the deadly Northern California wildfire are elderly residents in Magalia, a forested town of about 11,000 north of the destroyed town of Paradise. (AP Photo/John Locher)
‘Forever War’ with fire has California battling forests instead

Five of the state’s largest-ever blazes seared California last year, as authorities tackle prevention

Tokyo 2020 President Seiko Hashimoto and IOC President Thomas Bach, on a screen, speak during a five=party online meeting at Harumi Island Triton Square Tower Y in Tokyo Monday, June 21, 2021. The Tokyo Olympics will allow some local fans to attend when the games open in just over a month, Tokyo organizing committee officials and the IOC said on Monday. (Rodrigo Reyes Marin/Pool Photo via AP)
Tokyo Olympics to allow Japanese fans only, with strict limits

Organizers set a limit of 50% capacity — up to a maximum of 10,000 fans

Intricate cloth masks with Indigenous design made by Teresa Snow. Facebook/ Masks4Maskwacis
‘Masks 4 Maskwacis’ wins Northern Lights Volunteer Award

The group received recognition for their efforts to support their community during COVID-19.

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
VIDEO: Border quarantine to soon lift for fully vaccinated Canadians

Eligible travellers must still take multiple COVID-19 tests

Blair Lebsack, owner of RGE RD restaurant, poses for a portrait in the dining room, in Edmonton, Friday, June 18, 2021. Canadian restaurants are having to find ways to deal with the rising cost of food. THE CANADIAN PRESS/Jason Franson
Canadian restaurateurs grapple with rising food costs, menu prices expected to rise

Restaurants are a low margin industry, so there’s not a lot of room to work in additional costs

Most Read