Caraquet naval centre struggling despite $7.8M in funding

A government-subsidized shipyard that's been held up as key to an economic revival in northeast New Brunswick is having money problems.

Three contractors have filed liens against the New Brunswick Naval Centre, which has received millions of taxpayer dollars in the last year.

They say they haven't been paid for their work on the site in Bas-Caraquet.

The money's not there.- John Porter, president of Spec 5

"The money's not there," says John Porter, the president of Spec 5, a building and construction consulting firm in the Bathurst area.

Porter says it's affecting his business.

"We want to expand and we need the funds to meet to meet the needs of our other clients."

Spec 5 is owed $43,000, Porter said. Court filings say Foulem Construction of Caraquet is owed $1 million and Genibuild Construction of Tracadie is owed $500,000.

Naval Centre president couldn't be reached

Michel Beaudry, the president of the Naval Centre, couldn't be reached for comment.

He told Radio-Canada last week that the situation would be resolved soon.

But Porter isn't convinced.

"I'll believe it when I have my cheque," he says.

The Naval Centre upgrade has been funded in part by the New Brunswick government, which handed over $3.8 million in infrastructure funding earlier this year.

The provincial governmentis also giving $4 million in payroll rebates to Quebec-based Groupe Ocan, which will be the shipyard's main client.

Porter says he doesn't know why contractors like him aren't being paid. He says he's been told the naval centre has to pay its suppliers first in order to get its government funds.

The centre was created by two municipalities, theTown of Caraquet and the Village of Bas-Caraquet. Each invested $400,000.

But the mayors of the two municipalities refused to comment on Tuesday on why the contractors are not being paid.

We believe in the project but there are difficult moments at times.- AgnsDoiron, Bas-Caraquet mayor

"We believe in the project but there are difficult moments at times," said Bas-Caraquet Mayor Agns Doiron.

"We feel positive it will be resolved."

She would not discuss the flow of money, referring questions to Beaudry.

A spokesperson at the town hall in Caraquet referred questions for Mayor Kevin Hach to Beaudry as well.

The mayor and municipal managers of the two communities sit on the naval centre's board of directors along with other prominent community members.

While the centre was incorporated by the two municipalities, Beaudry said in May it is not obligated to report on how it receives and spends money.

"It's a private corporation," he said at the time, explaining that the public-disclosure rules that apply to municipalities do not apply to the centre.

Province gave $7.8M this year

The Progressive Conservativegovernment of David Alward first announced the agreement with Groupe OcaninAugust of 2014, just days before the start of the provincial election campaign.

At the time, the provincial governmentsaid it would "consider" investing up to $13 million in the project.

This year's provincial spending of $7.8 million isn't the first time taxpayer dollars have been provided.

In 2010, the federal government's Atlantic Canada Opportunities Agency gave $1.3 million after the newly-created Naval Centre corporation bought the shipyard.

The provincial governmentgave the centre a $300,000 loan guarantee at the same time.

ACOA provided another $322,000 in 2011 and a loan for $2 million for infrastructure earlier this year.

Agency spokesperson Monique LeBlanc won't say if ACOA's way of handing over money is playing a role in contractors not being paid.

But she says it's normal for ACOA to transfer money only after the recipient has paid its suppliers and presented documentation.

She says in a written statement ACOA is "committed to the effective management of taxpayers' dollars" and is working with the Naval Centre "to ensure that all terms and conditions of its contract with the organization are met so that the project can be successfully completed."

Groupe Ocan said earlier this year it was putting $29 million of its own money into the project.

As recently as Oct. 1, New Brunswick Finance Minister Roger Melanson held up the naval centre funding as a good investment that will stimulate the private sector to create jobs.

In a written statement by the Gallant government in May, spokesperson Bruce MacFarlane says the province "takes very seriously its responsibility" to conduct due diligence on recipients of taxpayer subsidies to ensure the public gets a return on the investment.