Blind River Mayor Rejects Calls for Forensic Audit Following Controversial Loan


Editor’s Note: As appears in the Ottawa Citizen.


The mayor of an Ontario town that’s on the hook for a controversial $49.5-million loan from the Canada Mortgage and Housing Corp. is rejecting calls for a forensic audit of its power utility.

Blind River Mayor Sue Jensen made the comments this week at a public meeting that was residents’ first chance to publicly question their town council and the municipality’s North Shore Power Group about the deal.

A substantial portion of the CMHC loan was invested in Ottawa-based Plasco Energy Group, which has subsequently sought creditor protection. Blind River — a town of 3,500 people — is now owed $17.92 million, according to court documents.

At the meeting, attended by 300-plus people, several residents called for a forensic audit of NSPG, eliciting repeated cheers from the audience.

“A forensic audit should only be ordered or asked for if there is any suspicion or allegation of fraud,” Jensen said. “There are none.”

“The Town is certainly not ordering the audit. It would cost between $100,000 and $200,000. If someone out in the crowd would like to order one, by all means go ahead. But you are paying, because the town will not. There is no need for it.”

Blind River originally sought the money — available through the federal government’s Economic Action Plan — for a solar-energy farm. When those plans fell through, however, as CMHC would not take the loan back, some of the money was used to fund North Shore Power Group’s investment in Ottawa’s Plasco Energy Group.

Since Plasco filed for creditor protection, Blind River has been saddled with an annual repayment of $1.1 million and a one-time payment of $22.5 million in 2037 to CMHC.

In a 90-minute presentation focusing on the chronology of events leading up to present day, Graeme Lowry, NSPG CEO, began by stating, “I’m not in any way going to apologize if we did any missteps with North Shore Power Group because I think it’s important to keep on trying hard enough that you do fail occasionally.”

Lowry went on to add that he believed much of the information released about the matter has been false or inaccurate. He stated that he was unable to dispute what he felt was “misinformation” because he was recovering from a brain bleed that caused a brief coma and eventually resulted in brain surgery.

By the time Lowry finished his lengthy and at times very technical presentation, the crowd was chomping at the bit to have at the microphone.

“You’ve called this project audacious,” said resident and outspoken critic André Berthelot. “It’s audacious when it’s done on your dime. It’s reckless, in my opinion, when you borrow money in excess of the tangible capital assets owned by the Town of Blind River.”

Berthelot added, “It’s not your money at risk. It’s the money of the taxpayers. Now more than ever the town has been locked into the success or failure of the North Shore Power Group. Effectively, our grandchildren have been hog-tied to a debt which was incurred to advance a speculative business interest.”

Mike Dupuis, a longtime resident of Blind River, thanked Lowry for the presentation before expressing disappointment that, as he saw it, town council had stepped out of its electoral mandate by assuming the CMHC loan. Looking pointedly at the lineup of municipal politicians Dupuis remarked, “Who’s the guarantor of this mortgage? We are. This was my money, my neighbours’ money. You were a bunch of cowboys with my money.”

To the amusement of the crowd, one gentleman commended both the NSPG and the town council. “Whatever you have done I have to compliment you because you have brought this community together.”

When the laughter died down he questioned Lowry about the decision to engage with Plasco.

“My question is on a rumour. How did the North Shore Power Group become involved with Plasco?”

Lowry said he first became aware of Plasco when he was researching the viability of waste to energy projects and that the introduction to the company was facilitated through a contact. Lowry also claimed that the same contact was instrumental in Blind River securing the CMHC loan.

The three hour meeting concluded with a promise from the NSPG and the town council to hold regular public meetings for the purpose of keeping the community of Blind River abreast of issues as they unfold.


More coverage by Ottawa Citizen’s Vito Pilieci here and  here and here.



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