Criticism is being increasingly levelled at the Nova Scotia government for its award to three large tourism operators of 35 million Canadian dollars (C$35 million - US$28 million) of loan guarantees via standby letters of credit (L/Cs), (DC World News, 30 April 2021).

One of the operators, the Cabot Links golf resort, has drawn the fiercest criticism. Accusations suggest that their standby L/C backed loan will likely be used to fund the construction of luxury condominiums or villas that were planned but delayed by the coronavirus pandemic.

L/C conditions questioned

"Every large property developer in Nova Scotia wants to build condos and would love to have a letter of credit backing up the bank [loan] and getting a super-low interest rate," according Neal Livingston of the Margaree Environmental Association.

For more than a decade Livingston has been vehemently against the development of Cabot Links and an associated airport capable of catering for the jets of wealthy golfers flying into the resort.

Livingston is questioning what conditions are attached the L/Cs and argues that since the resort's developers already planned to build new condominiums, then additional funding is not needed.

Government response

When asked if guarantee programme applicants were required to disclose business plans for the loans, Nova Scotia's inclusive economic growth minister, Labi Kousoulis, replied in an email response that the programme "provides a standby L/C that an eligible operator can use to secure loans with favourable terms to ease operating pressures and create the conditions for the sector to rebound."

"The programme is a loan guarantee and does not provide funds directly to the operators," Kousoulis added.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.