Credit union gave Gibsons Community Building Society access to $1 million to build market; total debt at least 1.4 million
(by Laura Houle)
The B.C. Office of the Information and Privacy Commissioner (OIPC) has ordered the Town of Gibsons to disclose all details of the loan agreement between the Gibsons Community Building Society, which operates the Gibsons Public Market, and the Sunshine Coast Credit Union.
When a journalist asked the Town of Gibsons in June 2016 to release all contracts and legal agreements between the town and the Public Market, the town released several documents, but a loan agreement letter between the Gibsons Community Building Society and the Sunshine Coast Credit Union was completely blacked-out.
According to the loan document, the building society, which operates the Gibsons Public Market at 473 Gower Point Road, could access up to $1 million for construction of the building. Half of the amount was made available as a loan and half was a line of credit. Both were loaned at an interest of prime plus 1.2 per cent. The interest rate would be renegotiated three years after completion of the construction of the market. The loan is amortized over 25 years.
The building society operates the market through a lease with numbered company 0987152 B.C. Ltd., which is registered on title as the owner of the building.
The town participates for 39 per cent in the numbered company. According to the document, the security for the loan and the line of credit is “the unlimited corporate indemnity of 0987152 B.C. Ltd. supported by an existing Creditmaster first mortgage and assignment of rents” over the property at 473 Gower Point Road.
The numbered company has had a $400,000 mortgage on the property since its purchase in 2013. In a report to council on June 20, 2017, councillor Silas White stated that “the Building Society (. . .) has been paying off the interest on this mortgage in lieu of rent. A development in the accounting of this arrangement with the Sunshine Coast Credit Union is that the $400,000 mortgage has been transferred from the numbered company to the Society in its status as lessee.”
The total debt is at least $1.4 million dollars, combining the $1 million from construction financing with the $400,000 mortgage. The Coast Clarion asked the Town’s director of finance David Douglas if the town runs any financial risk if the market were to fail, but there was no response.
The Coast Clarion asked Colin Stansfield, the executive director of the market, for more details about the market’s finances, but he responded: “We won’t be making ourselves available for an interview at this time.”
On June 6, 2018, adjudicator Lisa Siew of the OIPC dismissed every one of the town’s arguments to refuse public access to the loan document.
The town had asserted that the loan letter contained confidential financial and commercial information that could harm the business interests of the credit union and the building society.
Council discussed the letter at an in camera meeting on April 5, 2016. Consent to the loan was needed because it would encumber the town’s interest in the market property. Because the meeting was closed to the public, the town argued the information was confidential.
In her ruling, Siew disagreed with the town. “In my view, not every document considered by a public body at an in camera meeting is provided in confidence,” she wrote. “It is evident that a public body can consider non-confidential documents at an in camera meeting. A third party can provide a record to a public body with no expectation or agreement of confidentiality. The public body can then decide to consider and discuss this document in private, but that alone is not sufficient to satisfy the ‘in confidence’ element under the Act.”
Siew also rejected the town’s argument that disclosure of the loan information could harm the competitive or negotiating position of third parties doing business with the town. The building society told the OIPC that third parties “will be reluctant in future to provide information to public bodies in the absence of guarantees of privacy” but Siew concluded that the building society is not likely to resist providing the town with similar information in future because it is in the organization’s financial and business interests to continue working with the town.
Contrary to the town’s claim of confidentiality, Siew noted that some of the blacked-out information in the loan letter content had already been publicly disclosed in a report to Council by Councillor Silas White on June 20, 2017.