Thank you, Mr. Speaker. Good afternoon, everyone. I understand that the federal government is negotiating to transfer its ownership of Canarctic Shipping Company to the Government of the Northwest Territories, and that negotiations are well under way. I understand that a number of aboriginal development companies were approached with a proposal to buy this shipping company. It seems that none of them pursued it, and now this government itself is planning to buy the company in the hopes of finding some northern company to ultimately purchase it in the future.
Three main difficulties exist to me. If the GNWT becomes owner of Canarctic Shipping, it will probably be able to find an eventual buyer only if our government retains the inherent liabilities. This means the GNWT would relinquish control but still be exposed to financial burdens.
Under the existing shareholder's agreement, a company named FedNav retains the indefinite right of first refusal on any transfer, so there is no guarantee that after all the agreements are signed the eventual transfer to a northern company can actually take place. Canarctic Shipping is saddled with a number of liabilities which the federal government will pass on to the GNWT if we accept ownership. Some of the liabilities which have been identified to me are the following: Canarctic has already accumulated over $79 million in losses, and future operations can be considered only economically marginal at best. There is a guaranteed floating rate credit facility with a Canadian bank for $10 million. Previous financial statements consistently show a foreign exchange loss of $500,000 every year. There exists a potential liability exposure relating to the sinking of a ship under charter with Canarctic whose case has not yet been resolved, for the amount of $5 million.
The possibility of finding a northern company to buy Canarctic is not assured. There already exists a northern aboriginal owned company, and resources in the North to encourage another company to enter this field may be limited. Thank you.