Atcon deal called violation of N.B. law

New Brunswick's $50 million loan guarantees for a Miramichi-based construction company violate the province's Economic Development Act, say the Opposition and the auditor general.

The government announced in June that the loan guarantees to Atcon Holdings Inc. were necessary to keep the company in business and provide jobs for people in the Miramichi region.

However, both Auditor General Mike Ferguson and Conservative finance critic Bruce Fitch say the loan guarantees are in violation of the province's Economic Development Act.

In a recent interview, Atcon president and CEO Robbie Tozer said the loan guarantees would help the company proceed with several projects, including a quarry in Belledune in the northern part of the province.

Ferguson said Thursday the Economic Development Act prohibits loan guarantees to companies that do quarrying.

When asked about that, officials at Business New Brunswick said the quarry operation was a small part of Atcon's total business, so the restriction on loan guarantees did not apply.

Ferguson doesn't see it that way.

"The section in the regulation is quite clear. It just says the following are proscribed — industrial, commercial and business activities to which the minister shall not grant financial assistance. So it doesn't reference anything about corporate structure," Ferguson said.

Fitch said Business New Brunswick's reaction to questions about the arrangements with Atcon says a lot about the government's attitude in handing out taxpayer dollars to big business.

"That's what I'm concerned about. Maybe more than the quarry issue is that broader issue of what's the next rule that may be ignored or broken in order to suit their political agenda," Fitch said.

The minister who recently took over the Business New Brunswick portfolio, Victor Boudreau, has been unavailable for comment, but has agreed to make himself available for comment on the issue on Friday.