Bas-Caraquet shipyard's former CEO won't talk about cash problems

The former CEO of the troubled shipyard in northeast New Brunswick is refusing to talk about who's to blame for the cash crunch that has forced the provincial government to take over the facility.

Michel Beaudry also won't discuss why he left the position after the money problems began to mount last fall.

He told CBC News he is subject to a confidentiality agreement until the end of July.

Beaudry was the CEO of the New Brunswick Naval Centre in July 2014, when it signed a memorandum of understanding with the previous PC government of David Alward and with Groupe Ocan, a Quebec shipping company.

"He was the person who was working on everything," Caraquet Mayor Kevin Hach said of Beaudry in an interview last month.

The Gallant government announced last month it will take over the naval centre and provide the financing it needs to finish infrastructure upgrades, complete construction of a floating drydock, and pay off unpaid suppliers.

That set off a partisan exchange over who was to blame for the centre running out of money last year.

The cash crunch led several suppliers to file liens against the facility, and in December, Groupe Ocan suspended its work on the drydock and laid out 28 workers.

The Liberals say the shipyard deal was flawed from the moment the PC government signed it in 2014, just before the election.

They say the deal required the naval centre, a non-profit corporation created by the town of Caraquet and the village of Bas-Caraquet, to borrow $17 million from lendersan amount municipalities could not borrow under provincial law.

That flaw was also not mentioned in "inaccurate" cabinet briefing materials presented to the Liberal cabinet when it approved $4 million in provincial funds for the centre, cabinet minister Victor Boudreau said.

But PC leader Bruce Fitch, who was in the cabinet that signed the deal in 2014, responded that the Tory plan was to have private investors provide some of the funding and that Liberal decisions had undermined that.

Hach, who as Caraquet's mayor sits on the naval centre board, said last month he couldn't recall precise details of the original 2014 agreement, including how Beaudry was planning to come up with financing.

"I think you should ask Mr. Beaudry if he wants to talk about it, and how he brought it up," Hach said.

Beaudry, a Quebec management consultant, said when reached on his cell phone that the confidentiality agreement prevents him from answering questions.

Beaudry also refused to discuss why he left as CEO.

Hach said last month it was because of the cash crunch.

"At one point, when everything started to fall down, we had to look at other options," he said.

The province originally intended to spend $4 million as part of a $10 million infrastructure upgrade, which was also to include the $4 million in financing from the naval centre and $2 million from Ottawa.

Funding cut off last fall

But the province cut off funding last fall after having paid out only $1.5 million.

The naval centre was also required to come up with $13 million to finance the construction of a floating drydock to be built by Groupe Ocan.

The shipping company was then to lease the drydock for 20 years, repaying the $13 million in the form of a lease.

With the province assuming almost all costs, the government could spend up to $38 million on the shipyard, though Groupe Ocan says that will be partially reimbursed when it pays the $13 million to lease the drydock.