Madam Speaker, I am pleased to respond to the question of the member for Bras d'Or—Cape Breton regarding Scotia Rainbow Incorporated.
Scotia Rainbow Incorporated is an aquaculture operation headquartered in Arichat, Nova Scotia, and operating a number of sites throughout Cape Breton Island and northeastern Nova Scotia. The community of Arichat lost hundreds of fish processing jobs as a result of the groundfish moratorium and a corporate decision to demolish the fish plant, the community's largest employer.
Last year Scotia Rainbow employed up to 250 people on a seasonal basis at various sites on Cape Breton Island. The company projects employing up to 300 people on a seasonal basis this year. Scotia Rainbow is one the largest aquaculture operations in Nova Scotia. It is an export oriented company with products sold in Japan and the United States.
Recently Scotia Rainbow encountered financial difficulties. On February 28, the Bank of Montreal issued a demand notice pulling its $10 million line of credit. The bank obtained court approval for the appointment of an interim receiver on March 2.
In response, Scotia Rainbow filed a notice of intention to file a proposal with the Supreme Court of Nova Scotia on March 10. This notice of intent effectively prevents the bank from proceeding with the liquidation of the company's assets until the court determines that there is no likelihood of Scotia Rainbow being restructured into a viable company.
On May 19, the Supreme Court of Nova Scotia extended the deadline for the filing of a restructuring proposal until June 30. At present the company is working to find further private sector investment in order to restructure its financing and effectively replace the financing provided through the Bank of Montreal.
The federal government has to date invested approximately $8.8 million into Scotia Rainbow. The $8.8 million was provided through a $1 million repayable contribution or loan from the Atlantic Canada Opportunities Agency, an interest bearing loan from the Farm Credit Corporation of $5.8 million, and a $2 million investment from the transitional jobs fund administered by Human Resources and Development Canada.
Of this total, $800,000 have been repaid to the Farm Credit Corporation. Of the $8.8 million, $5 million were provided for the initial startup of the company. The remaining $3.8 million from the Farm Credit Corporation were provided for the expansion of the company, which was partially completed prior to the Bank of Montreal sending its demand letter.