New Brunswick Naval Centre government funding cut off

The Gallant government has revealed why a taxpayer-subsidized shipyard in Bas-Caraquet has run into money problems.

Cabinet minister Victor Boudreau says the province cut off its funding to the New Brunswick Naval Centre several weeks ago when the government learned the shipyard hadn't lived up to its end of their agreement.

Boudreau, the minister responsible for the Regional Development Corporation, says the centre was supposed to secure $4 million to match the province's infrastructure funding.

"It turns out the Naval Centre never fulfilled its commitment to secure its $4-million in funding," Boudreau said in a written statement Monday.

The province had already paid out $1.5 million but cut off the rest, he said. "As a government we want to ensure that when public investments are made we are protecting taxpayer dollars."

Unpaid bills over $1.5 million

Last month several suppliers went public about the fact they had not been paid for work they did at the centre. Three firms have filed liens against the facility for unpaid bills totalling more than $1.5 million.

Besides the $4 million from RDC, Opportunities New Brunswick has committed $3.8 million in payroll rebates for a Quebec company that plans to use the shipyard to upgrade its boats. None of that money has been paid out.

Premier Brian Gallant announced both funding packages in Bas-Caraquet in the spring. Now the project appears to be at risk of collapse.

"We are currently working with our partners to see if the Naval Centre and its board can raise the funds they promised before we provided further support," Boudreau said.

If it wasn't serious, we wouldn't be investigating.- Denis Landry, Minister of Natural Resources

Earlier Monday, another Liberal cabinet minister, Denis Landry, who represents a riding near the shipyard, said the Liberal government was investigating the centre. "We don't want to go in blindly," he told Radio-Canada.

Landry also disputed comments by local officials that the problem with paying suppliers was due to small details.

"You'll see the size of the details," he said. "If it wasn't serious, we wouldn't be investigating."

Caraquet, Bas-Caraquetcontrol shipyard

The naval centre was incorporated as a private company by the town of Caraquet and the village of Bas-Caraquet. Because it is a private entity, it doesn't have to disclose its finances, despite being effectively controlled by two municipal governments.

The two mayors, who sit on the centre's board, have refused to comment on the shipyard's problems. They've referred reporters to centre CEO Michel Beaudry.

But starting last week, Beaudry declined to comment as well, referring questions to RDC.

A spokesperson for RDC said on Oct. 23 the province hoped to resolve the problems within two weeks.