City of Toronto writes off failed $250,000 loan to Just for Laughs
TORONTO, ON- The City of Toronto has given the Just For Laughs comedy empire a $250,000 gift of taxpayers money.
The gift comes after council decided to write off the last half of a bad loan made to the comedy empire back in 2007, which was never paid back in full.
"The government forces us to pay taxes, then it turns around and gambles our money away on risky loans it had no business making,” said Jasmine Pickel, the interim Ontario Director for the Canadian Taxpayers Federation. “This is a completely inappropriate use of our tax dollars."
In 2007, council gave the green light for a $500,000 loan to the group aimed at establishing a local festival. The loan was due in December of 2009.
The festival had a deficit in the first two years of operation, and the city extended its loan repayment timeline to the end of 2010.
The repayment didn’t happen, and the loan was considered to be in default.
In 2014, the city considered settling the loan. Settlement required repayment of $250,000 with interest over a five-year period, as well as guaranteed rentals of city venues and in-kind services.
As of the end of 2018, the outstanding balance remained $250,000, detailed in an annual report on the city’s loan’s and loan guarantees. The balance was subsequently written off.
A statement from the city said Just for Laughs had repaid $250,000 in principal loan payments, plus interest, and had rented city venue space for $500,000 over five years, as required by the settlement.
“Half of the $500,000 in rental fees paid to the City was considered as an equal offset to the value of the remaining $250,000 principal loan balance,” read the statement.
“However, such implied value did not offset the outstanding accounting loan balance of $250,000 and that amount was authorized by City Council as a write off. The write-off of this receivable balance was made against the City's Allowance for Doubtful Accounts, creating no impact to 2019 operating expenses.”
On Apr. 16 and 17 of this year, city council voted in favour of writing off the $250,000 left on the loan. They made the decision without debate, and without proposing any changes.
"This is yet another example of waste and mismanagement from city hall that erodes Torontonians' faith in our government,” said Pickel.
“John Tory is telling Torontonians to give him more of their money by raising property taxes, but he needs to stop wasting the money we've already given him.”
A city spokesperson told the Canadian Taxpayers Federation that the original loan program which lent out the money no longer exists, and confirmed that city money was withdrawn to write off the loan balance.
Currently, a program exists under Economic Development and Culture to accept grant applications for “significant events” subject to council approval.
The production company for Just For Laughs is owned by a group made up of Bell Media, ICM Partners, comedian Howie Mandel, and Groupe CH.
The festival simply said the statement from the City of Toronto “reflects our position on this matter”.
The Canadian Taxpayers Federation has submitted access to information requests to learn more about the loan.
-Story by James Wood, Canadian Taxpayers Federation