At the February MRC Pontiac council of mayors meeting, the council approved provisions for bad debt in anticipation of several business loans the MRC gave out during the pandemic not being paid back.
This came as a recommendation from the MRC’s investment committee after reviewing the 2025 loan portfolio. According to the MRC’s website, the investment committee is made up of primarily representatives from the local community: Émile Vallée (président), MRC warden Jane Toller, Mansfield mayor Sandra Armstrong, Connie Gutoskie, Stéphane Labine, Robert Soulard, Nicole Thompson and Karim El Kerch.
The loans in question were an FLI loan totalling $1,234 and a PAUPME loan of $8,152.
The FLI is a loan program administered by the MRC for local businesses that has been around for decades. The PAUPME is primarily funds that were given to MRCs by the provincial government in response to the pandemic between 2020 and 2022.
“It was really to keep the lights on and make sure you didn’t have all these businesses dying off,” explained MRC business financial analyst Renée Lance, noting that some businesses did end up going under. She said that of the 18 PAUPME loans totalling $615,087 administered through the MRC, roughly $80,000 remains unpaid at the moment, and the MRC still expects to recoup a portion of that. More than half of the loans (11), which Lance said were between $30,000 and $50,000, have already been paid back in full.
“First, in the PAUPME program, two companies went bankrupt. The allowance reflects the amounts we expect to lose on these loans, based on the information available today. And the MRC does not have to reimburse these amounts to the Ministry. So yes, it is an accounting loss, but with no financial impact on the MRC’s budget,” she wrote in an email. “Despite the fact that some companies have gone bankrupt, I think it’s also important to point out that some have avoided bankruptcy, THANKS to these emergency measure loans.”
Lance explained that this accounting technique is not the same as writing the loans off.
“A provision is not a loss — it is a prudent measure. A loss is only confirmed when a loan is formally written off,” Lance wrote in an email. “Later this year, we will come back with two or three PAUPME write-offs related to these bankruptcies. By applying these provisions, we comply with accounting standards and protect the credibility of our financial statements.”
On top of the pandemic, there were also PAUPME funds allocated for outfitters affected by the forest fires in 2023 as well, though Lance said that the province decided to forgive those. She said only one local business had requested funding from the program in the amount of $12,500.
