Mr. Speaker, as you can imagine, the hon. member has described a situation to you that is not exactly simplistic. There is some detail that should be known.
Until March 31, 1998 Public Works and Government Services Canada was responsible for the operation and management of the dry docks at Lauzon. As part of its efforts to divest itself of its marine and transportation assets Public Works and Government Services Canada entered into a divestiture agreement with Industries Davie Inc., or IDI, for the dry docks.
On March 31, 1998 public works divested itself of the dry docks and handed them over to Industries Davie Inc. for a token one dollar plus a contribution payable under an agreement that included a $12 million reserve for major repair work payable on a pro rata basis as the work was completed. The accrued interest, and this is where the hon. member is getting his $2 million figure, earned on the $12 million reserve is not payable until the contribution agreement expires. That is important. The amount of $8 million represents the present value of the annual operating losses to be paid in installments of $800,000 plus interest annually.
In August 1998 Industries Davie Inc. filed for protection under the Bankruptcy Act. A proposal for its creditors was accepted in December, 1999. On October 24, 2001 the superior court set aside the proposal and assigned the assets to Gérald Robitaille et Associés Ltée because Industries Davie Inc. had failed to comply with all the provisions of the proposal. On November 6, 2001 public works issued a 30 day notice to terminate the obligations under the agreement with respect to the contributions because Industries Davie Inc. was in default according to the agreement.
A portion of the contribution in the amount of $12 million relates to major repairs, as the hon. member has said. The money was placed in trust in 1998. On December 31, 2001 the trustee confirmed that $11.7 million had been issued to IDI because the agreed upon work had been completed. On that date $1.9 million remained in the account, most of which was interest accrued on the initial $12 million. In accordance with the contribution agreement the funds cannot be claimed until the agreement expires on March 31, 2007.
The crown suspended payments and issued a default notice to Industries Davie Inc. for non-performance owing to the company's bankruptcy. However the trustee in bankruptcy is still responsible for the dry docks and has free access to and control over the docks. The trustee continues to operate the dry docks in accordance with the contribution agreement. We have not terminated the agreement. We are examining every option to continue to support the company.