$36.5M owed to Yukon government unpaid on schedule

The Yukon government says that an investment of $36.5 million in taxpayer dollars is currently in limbo, after the financial company that issued the asset-backed commercial paper was unable to repay what was owed in August.

In the notes to the territory's public accounts documents, which were tabled in the legislative assembly this week, territorial government officials said they don't know the status of the investment, which was invested earlier this summer on a higher-risk 30-day note known as asset-backed commercial paper. Such investments pay higher interest than safer government bonds or other investments.

But in August, just before the investment was due to be cashed in, theunnamed global investment entity that has been handling the investment informed the government and other investors that their money was not going to be repaid on time.

Two weeks later, an agreement in principle was reached to have the investments paid back over a longer term. But as of October, finance officials said it was still too early to say what will become of the $36.5-million investment.

Still, the Yukon's top finance official said he's confident the money is secure, and the uncertainty will have no impact on the territory's cash flow.

"Naturally, we would have wanted our money back when we expected it to get back, but you know, the paper we bought was the highest-rated investment paper one could buy," deputy finance minister David Hrycan told CBC News on Tuesday.

"It's backed by assets, and it's just one of those things that happen in the global market. But we are happy that we have money to invest, and right now we're waiting for this global restructuring to occur."

Hrycan said he expects to get an update on the situation soon.

Purdy Crawford, a lawyer and financial adviser hired to negotiate a settlement, said he is now hoping to have an agreement by the end of this year. That deal is expected to convert the short-term investment into longer-term notes, with the government being paid back over five or 10 years.

If investors are patient, Crawford said, they could receive all or nearly all of their money back over time.