Rocky Simpson may have just ousted incumbent Wally Schumann as MLA for Hay River South but the MLA-elect still faces another challenge. He owes nearly $2 million to the territorial government – a debt he didn't disclose to voters on the campaign trail.
Paul Bickford/NNSL photo
"No one asked me about it," said Simpson when pressed by News/North during a phone interview Friday as to why he kept the large sum a secret during the campaign. "It's a business thing."
According to court documents obtained by News/North, Simpson's company Concept Energy Services Ltd. entered into a loan agreement eight years ago with the Northwest Territories Business Development and Investment Corporation (BDIC), a GNWT Crown corporation.
"Up until and including the month of November, 2018 Concept Energy Services Ltd. failed to make 59 out of 93 recurring monthly payments since the loan was originally advanced in 2011," reads a statement of claim from the BDIC.
"Concept Energy Services Ltd. has missed every scheduled monthly payment starting in September 2017," continues the claim.
NWT Supreme Court judge Karan Shaner ordered Simpson and his companies to pay a total of $1,885,955.03 on June 28 of this year.
Simpson said hard economic times have hit his company, preventing him from paying back the loans. The Alberta oil patch crash in particular, he said, hurt the company's bottom line.
Hay River-based Concept Energy Services Ltd. rents out industrial equipment, while manufacturing and installing modular homes.
Simpson said the government loans went largely to equipment. "We were renting stuff out, building accommodations in Alberta. Probably 80 per cent of my revenue was coming out of Alberta and coming back into the NWT. When (the oil industry) went flat, we took a big hit on that."
Asked if he can effectively represent the interests of his constituents, while, at the same time, owing almost $2 million to the government he will now oversee as an MLA, Simpson said his business problems have nothing to do with his job as an MLA. "That's Concept Energy. So I will represent the people of Hay River as best as I can because, really, the economy is a problem, not just for me but for other businesses as well," he said.
When asked whether his debt could prompt constituents to question his ability to manage funds as an MLA, Simpson replied: "I hope not. At the end of the day I'm here to represent everybody with whatever concerns they have and just like in the past I've helped people out even when I wasn't an MLA," he said.
Asked if he should have disclosed his debt during the election run, Simpson said he thought most people in Hay River already knew what was going on. He maintained he wasn't trying to keep voters in the dark.
In November 2017, The Northwest Territories Housing Corporation cut ties with Concept Energy Services Ltd. The authority ended its contract with the company after it failed to deliver all of the promised 19 modular homes it was expected to deliver to NWT communities between March and June 2017. Simpson was awarded the contract in June 2016.
Simpson called the contract breakdown unfortunate, stressing loans weren't used from BDIC to build the homes.
When it comes to potential conflict of interest concerns in the 19th Assembly, Simpson said he would "talk with the person in charge of that just make sure there is no conflict. I'll make sure I step aside, probably deal with that this week or when I'm over there. Anything to do with my business … I'd make sure that's dealt with prior to sitting."
Simpson doesn't know when he'll be able to pay the money back in full. His opponent in the Hay River South race, Wally Schumann, who is still currently the minister responsible for BDIC, said he didn't disclose Simpson's debt because the matter was before the courts. "It's under legal action and I'm not privy to say anything about it," said Schumann.