Provincial Government Writes Off Debt

One of the most famous developments in Canadian casino news last year involved a substantial amount of debt being rung up by the Prince Edward Island provincial government. A report from the auditor general of the province revealed that late in 2016, the government eventually decided to write off debts of over CA$1,125,131 under the label of ‘bad debt’.

The debt was incurred as a result of the province’s evasive attempts to partner with a local Canadian tribe in order to set up an unlicensed online gambling licensing and regulations jurisdiction. A local news update has only just revealed that the debt has been written off, costing Canadian taxpayers at least $1.5 million in the process.

Unusual Loan Clause

The Prince Edward Island auditor general has released a report that states that the greater part of this debt is owed to a loan, which was given to the Mi’kmaq Confederacy tribe. This loan, however, included an atypical clause that stated that the Confederacy tribe would never be held responsible for its repayment. Due to this clause, the repayments that were due to be paid back from revenues generated from the gambling licensing venture were never produced.

Furthermore, it also makes it challenging for the Confederacy tribe to be held accountable for their role in the licensing jurisdiction debacle, at least where financial matters are concerned. The auditor general mentioned that additional debts may still come to light, bringing the total of the damage to an estimated $1.5 million – or more.

New Financial Disclosure Laws Implemented

The government was quick to react to the gambling-related debacle, setting strict financial disclosure laws in place. These new rules will require all Canadian government ministers and their respective divisions to comply, disclosing all relevant revenue takings, cash loans, and taxpayer money write-offs. The total value of unpaid loans to the Canadian government currently stands at around $13.4 million.

This includes only loans that have since been written off by Crown corporations during this first round of disclosures. Some of the debts included date back as far as 2001, highlighting loans made over 15 years ago that have still not been resolved. Despite the Mi’kmaq Confederacy tribe’s involvement in the issue, it remains unclear as to whether or not its members will be held accountable for the debts incurred.

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