By ADELLE LARMOUR
A significant number of jobs have been created as a result of the Northern Ontario Grow Bonds pilot program.
Under the umbrella of the Northern Prosperity Plan, the program is approaching its third year. To date, nine businesses have collectively received about $6 million worth of loans, producing 493 full-time permanent and sustained jobs, says Sharon Tansley, general manager of the Northern Ontario Grow Bonds Corporation.
The program consists of two components: bond sales and a business loans program. The Grow Bonds were available for purchase between March 21, 2005 and April 18, 2005. Almost $13 million worth of bonds were purchased at a five-year term with an annual fixed interest of 4.0 per cent. Available only to Northerners, they are 100 per cent guaranteed by the provincial government.
Money raised through bond purchases is being used for loans to small- and medium-sized businesses for capital projects that will result in permanent full-time jobs in the North. The loans program was designed to help new and expanding businesses in Northern communities create, increase and sustain jobs, strengthening their economic position.
Tansley says they received 89 applications during the rather short window of time when an application could be submitted (Feb. 26 to May 6, 2005). Beyond the nine businesses previously announced, she adds that a number of applications have been approved, but the clients are working on further refining their proposals, or are obtaining financing from other sources.
“When they are ready to go, the approval is in place.”
Deloitte and Touche Consulting, a loan administration and evaluation firm, has been working closely with the applicants to further develop their proposals to ensure viability and success. The intent is to use the almost $13 million from the Grow Bonds.
“I think some of these projects may not have proceeded if funding had not been available through Grow Bonds,” Tansley says.
Rickart and Geannette Thomsen, owners and operators of North Bay’s Sani-Gear Fire received a $33,000 loan two years ago to purchase equipment and expand their facility.
“It was a Godsend,” Rickart says.
As cleaners and repairers of firefighting gear, the loan has allowed the business to increase its employee base about three times in size with between nine and 11 full-time staff, depending on the demand. He says the Grow Bonds made the process of obtaining a loan easier than that of a bank. “We were fortunate that it was available.”
Rickart recently received the green light on a stringent required certification and anticipates further growth in the near future.
Some other business that have received loans are Thunder Bay’s NAC Air LP, The Wilderness Group in Wawa, and Manitou Forest Products Limited who modernized and expanded their sawmill in Emo.
Tansley says they’ve learned a “tremendous” amount in undertaking this pilot program. If a future program should occur, some potential considerations would be a “program review” to study the terms set and length of the loans, as well as get more feedback from applicants who did and did not receive loans.
“The lessons learned will be used in the development of future programs.”
