Loan to shipbuilding firm with Martin ties sparks opposition ire

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By JIM BROWN (AP)

Opposition MPs cried foul over a $4.9 million federal loan to a company with ties to Paul Martin, citing it as one more example of potential conflict of interest for the man soon to be prime minister.

"The government shouldn't be in the business of picking winners and losers in the corporate sector," Canadian Alliance MP Chuck Strahl said Wednesday. "It's a lot of cash to give to a profitable, privately owned company that just happens to be the ex-finance minister's holding . . . . It begs the question why him, why not the other guy?"

New Democrat MP Pat Martin was just as scathing, noting that Technology Partnerships Canada - the Industry Department program under which the loan was made - has long been criticized for political pork-barreling.

"We've always known these loans are good for the Liberal party," said the NDP critic.

"Now we have reason to believe these loans are benefiting individual Liberals - the future prime minister of Canada being one of them. This is a shocking thing."

Paul Martin's office denied he had any personal involvement in the decision to award the loan, which went to Canadian Shipbuilding and Engineering of St. Catharines, Ont., a company 25-per-cent owned by Canada Steamship Lines, the cornerstone of the Martin family business empire.

Howard Wilson, the federal ethics counsellor, said he was aware of the loan application from the start, monitored the process and was satisfied no conflict-of-interest rules were broken.

But that did little to still the opposition storm.

"Imagine if Chuck Strahl Inc. said 'By the way, I just got $5 million for research and development," said Strahl. "I think people would say 'What's gong on?' "

Walt Lastewka, the Liberal MP for St. Catharines who publicly announced the loan in June, confirmed he had "helped" the shipbuilding firm in its dealings with the Industry Department but insisted he played no role in the final decision.

A well-known supporter of Martin's leadership bid, Lastewka said his only concern was ensuring the health of a key industry in his riding. "We've got ships (on the Great Lakes) now being built in China," he said.

"They should be built here in Canada."

Wilson said he never received any complaints from the Industry Department about political interference or other impropriety in the loan process.

The ethics counsellor was advised by Canada Steamship Lines in March 2002 - while Martin was still finance minister - that its shipbuilding subsidiary had applied for a federal loan.

But Wilson said neither federal law nor the conduct code that governs cabinet ministers automatically bar firms in which MPs have an interest from doing business with the government.

"There was no difficulty in the company making that application," said Wilson. "The company and its subsidiary should be able to benefit from government programs for which they are eligible."

The only questions were whether Martin lobbied on the company's behalf or played any role in the decision to award the loan.

"He was not involved in any way," said Wilson.

Scott Reid, a spokesman for Martin, described the loan application as a purely commercial matter. He said the former finance minister, under the blind management agreement that then governed his business holdings, had "no knowledge of any kind" about the affair.

The loan was approved this spring, after Martin had left cabinet, and made public June 19, about two months before he formally transferred control of Canada Steamship Lines to his three adult sons.

The transfer was supposed to put an end to conflict-of-interest questions once and for all, but the opposition has refused to relent.

"He would have to walk away from every issue pertaining to finances period, to be truly removed from any conflict of interest," said the NDP's Pat Martin.

"It's a company he and his family own . . . . Are you telling me they don't ask about the old company around the Christmas or Thanksgiving dinner table? Canadians don't buy that."

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