Defunct P.E.I. businesses owe millions to ACOA, court documents show 

The Atlantic Canada Opportunities Agency is trying to recover millions of dollars in unpaid loans to various businesses which have been set up on P.E.I. over the years, court documents show. 

In the last decade, the federal agency created in 1987 to boost economic development in the region has taken legal action against more than a dozen businesses on the Island, the documents reveal. 

ACOA has seized assets in some cases, but the specifics of those seizures have not been made public. The documents do not show any payment being made on the amount of outstanding debt listed. 

Some companies that defaulted on loans include:

• Ice Jam Games: owing $1.5 million
• Atlantec Bioenergy: owing $1.9 million
• Tube Fab and associated companies: owing $300,000
• P.E.I. Berries: owing $500,000
• Opacmare: owing $355,000
• Bermc Controls: owing $308,000
• Adeptico: owing $480,000
• Enable Health Care: owing $474,000
• Aethon Aerospace: owing $788,000

In an emailed statement to CBC News in response to questions about the companies, officials with the agency said in part: "ACOA has an outstanding track-record when it comes to accelerating economic development and growth in Atlantic Canada... While there are inherent risks, the advantages, particularly in job creation, outweigh these risks." 

ACOA is owed millions by companies formed on P.E.I. that went out of business, documents show

6 hours ago

Duration 2:20

The federal agency that aims to boost economic development in Atlantic Canada is chasing dozens of bad loans worth millions of dollars. Court documents show ACOA is seeking money from a variety of P.E.I. businesses, in industries ranging from tech to food products to biotechnology and more.

The statement also said ACOA clients typically show above-average performance in sales employment, exports, and research and development. 

ACOA posts reports on its website outlining its overall spending, and its programs are regularly evaluated and audited. 

Criticism from Fraser Institute

Alex Whalen, the Atlantic Canada director for the Fraser Institute, a policy think tank, said research has shown ACOA and other federal development organizations "are generally a distributor of corporate welfare." 

Corporate subsidies like those offered by ACOA are not a good use of public money, he said. "They do not produce the benefits they are promised." 

They do not produce the benefits they are promised.— Alex Whalen, Atlantic Canada director, Fraser Institute

Whalen said these organizations are generally set up on the promise of creating jobs and boosting the economy.

While that may happen sometimes, he said, "There's simply no evidence that [ACOA] has meaningfully impacted the region's long-term economic trajectory." 

Critics also say funding untried new businesses can create unfair competition with established businesses and can come with a political motive. 

In 2024-2025, ACOA has said it plans to spend more than $350 million on "economic development" in Canada's four easternmost provinces. The development agency plans to spend less in the next two fiscal years, however.

Devin Drover, Atlantic director and general counsel at the Canadian Taxpayers Federation, said that money could be going to businesses in more helpful and equitable ways — such as across-the-board corporate tax cuts. 

"You have bureaucrats who have certain potential biases in mind choosing who to fund," said Drover.

In addition to the millions in unpaid loans to businesses, Drover said ACOA's burden on the taxpayer bleeds into the legal system, when the agency takes legal action and ties up court resources going after money it will probably never see. 

"If you have a bankrupt business, even if you are successful in a lawsuit, there's no chance of recovering the assets, or a very limited chance."