30 MARCH 2015

Opportunities New Brunswick Act should be amended to clarify Economic Development minister's powers

By Jacques Poitras
CBC News
Mar 26, 2015 7:23 PM AT

Auditor General Kim MacPherson said in her audit that in 2009, then-Business New Brunswick minister Victor Boudreau violated a provincial regulation when he released the province's security over loan guarantees to the Atcon group of companies.

Regulation 82-197 says the minister can only change the province's security if it "is not substantially affected."

MacPherson said Boudreau's change violated that because it exposed taxpayers to an additional risk of $33 million.

When Atcon went bankrupt in 2010, it cost the province a total of $70 million, in part because the province gave up its security — its first-priority claim to the company's assets in the event it collapsed.

The government disagrees with MacPherson's assertion that Boudreau violated the regulation, which is one reason she says the bill currently before the legislature should be clarified one way or the other.

'We've got to look at the legislation in terms of her findings ... in terms of the minister possibly stepping outside his legal authority.'
- David Coon, Green Party leader

The Opposition Progressive Conservatives have been demanding Boudreau resign over his breach of the regulation.

"We have the opportunity to make it right today," PC Leader Bruce Fitch said. "The premier can stand up and ask for the resignation of the member who was acting outside the regulations of the day."

Coon isn't calling for Boudreau's resignation, but says the government should get a legal ruling on his actions and he should step aside temporarily until that is done.

For the third straight day, none of the six current Liberal cabinet ministers who were part of the 2009 Atcon decision would speak to reporters about the auditor general's report.

MacPherson wrote in the report that the decision showed a "troubling disregard" for taxpayer dollars and the $70 million loss was "totally unnecessary."

Gallant has said repeatedly that the new CEO of Opportunities New Brunswick, Stephen Lund, has been talking to MacPherson about how to implement her recommendations.

Open to improving legislation
On Thursday, though, Finance Minister Roger Melanson told journalists that the government is "very much open to implementing what can be implemented ... in improving the legislation that's in place or could be receiving royal assent."

He said if it's too late to pull back the Opportunities New Brunswick Act before it becomes law, "we can always come back and do amendments."

Melanson also says bringing private-sector people into Opportunities New Brunswick and Gallant's Jobs Board will help the government scrutinize potential investments better.

Atcon dominated Question Period for another day on Thursday, with Premier Brian Gallant repeating his commitment to avoid any similar fiascoes in the future — and taking a shot at the Tories for some of theirs.

He cited the Orimulsion affair, in which NB Power refurbished Coleson Cove for $700 million to burn a type of fuel from Venezuela, only to have that country's state oil company try to pull out of its contract.

"I would like the members opposite to explain exactly what happened in the Orimulsion deal," he said. "Why did our province lose almost $1 billion?"

What Gallant didn't mention is that his Liberal Party promised a judicial inquiry into the case in 2006, only to have premier Shawn Graham's cabinet — the same one that signed the Atcon deal — break the promise a year later.

Fitch also pointed out NB Power eventually won a settlement in the case and received $338 million from the Venezuelan oil company.

Gallant also cited the PC decision to refurbish Point Lepreau, despite the Public Utilities Board recommending against refurbishment.

Fitch said the PC government at the time got advice from another expert that made the cost overruns there lower than they would have been otherwise.