11/21/2013 02:11 EST | Updated 01/25/2014 04:01 EST

Nova Scotia cabinet prepared to defend loans, but jobs fund staying put: premier

HALIFAX - Premier Stephen McNeil shifted his stance Thursday on a controversial business loans program, saying cabinet will continue to control it despite criticism from Nova Scotia's auditor general that the fund suffers from a lack of management and accountability.

McNeil said his government will ensure taxpayers know where their money is going and is prepared to explain any transactions, eliminating the need for an arms-length body to administer the Nova Scotia Jobs Fund — a change he argued for while in Opposition.

"The deals will be put on the table," McNeil said following a cabinet meeting. "And I know when we have ones that are questionable, we'll have to defend them and we'll have to say why we've done that particular investment."

In his fall report released Wednesday, auditor general Jacques Lapointe said he found examples within the fund of unsecured loans and loans that were approved but did not always include the required financial and economic analysis.

Lapointe recommended moving the fund to the arms-length Nova Scotia Business Inc.

McNeil acknowledged the fund under the former NDP government was flawed. But he said plans to introduce legislation increasing transparency on how taxpayers' dollars are spent and strengthening rules governing public assistance to the private sector should alleviate concerns.

"We were very critical of the fact that the minister can, at the stroke of a pen, make a decision without being able to tell Nova Scotians — I think it's inappropriate," he said.

The government announced Tuesday that it plans to introduce a bill in the fall session that would require it to post information for each transaction online, with a mid-year report on how the funds are used. It would cover transactions made after April 1 from the Nova Scotia Jobs Fund, the Nova Scotia Fund and strategic investment funds.

McNeil said any changes to existing loans and agreements will also be made public.

The Nova Scotia Jobs Fund, formerly the Industrial Expansion Fund, was introduced by the previous NDP government two years ago. At the time, then-premier Darrell Dexter said the new fund would provide better and clearer administrative reporting on economic assistance and transactions.

McNeil said Thursday that keeping the program under the control of cabinet will give his government more flexibility to approve loans.

He did, however, leave the door open to change, saying his government will review how it delivers financial assistance within Nova Scotia once a commission set up last year to explore economic opportunities in the province releases its final report.

Note to readers: This is a corrected story. A previous version said the auditor general released his report Thursday.