Tuesday, April 10, 2007

Caisse populaire pretty popular with Tories

I understand that there is a fair bit of anger around the blogosphere about the "$60 million bailout" for the Caisse in Shippigan and the Tories seem to be riding that wave.

According to T.J. Burke today was the eighth straight day he took questions on the subject - I'm surprised it was not much more.

Today it was all Shippigan all the time and every single question during the 30-minute period was about this issue. The theme today was that Burke should resign for prejudging the RCMP investigation into the accounting of the Caisse.

I'd like to point to some of the facts which seem to be misunderstood first before getting to the heart of the cry for resignation.

1) It was not a $60 million bailout. There was only $31.5 million for the Shippigan Caisse, the rest of the money was to top up the Caisse stabalization fund which had been underfunded by the Tories which was in part why $31.5m had to be handed out over and above the ordinary budget.

2) Spinks in particular likes to point out that the income tax increases bring in about as much revenue as this expenditure. That is an interesting coincidence but it is not fair to claim that is why taxes went up. This is a one time expenditure but tax revenue will be up in all subsequent years, we got lucky this year - and stand to continue being lucky for a few more years - thanks to high zinc and other resource prices. The reason taxes are going up is to be prudent in managing a growing budget which will inevitably go in to the red if revenue doesn't increase.

3) The Liberals are not being fiscally irresponsible by giving a grant instead of a loan. The non-partisan provincial comptroller - appointed by the Tories - told both the Lord and Graham governments that a loan could not be given. The Caisse was on the verge of bankruptcy and giving a loan to an institution that doesn't qualify under proper loaning practices would have done severe damage to the provincial credit rating. The Liberals had three options: a) do nothing and be on the hook for $90m of deposits thanks to Tory legislation protecting 100%; b) provide an irresponsible loan and damage the provincial credit rating causing the cost of interest on existing debt to go up; c) provide a grant as they've done which is the option costing the province the least in the long run.

Now to the heart of today's QP.

Apparently last week Burke told the press that they wouldn't be in this situation if the Tories had not been incompotent and had dealt with the issue at far lower cost in 2004 when they first became aware of it.

The Tories claim that this is prejudging the investigation by assigning blame to the previous government and that Burke should follow in the steps of his "very close friend" Andy Scott who resigned as Solicitor General of Canada in 1998 for prejudging an RCMP investigation into the pepper spraying of protesters at a demonstration at the APEC conference in Vancouver.

The Tory comparison is pretty weak and any claim they had to Burke needing to resign is shaken by it.

Let us compare the situations.

Scott was the minister responsible for the RCMP and there was an ongoing investigation on which Scott made statements indicating precisely what its conclusion would be.

Burke is not the minister responsible for the RCMP (for matters in which the RCMP is engaged as a provincial police force, such as this, Public Safety Minister John Foran is responsible) and he was commenting in general political terms about actions or inactions of the previous government which would not be the subject of an investigation, if one is pursued (currently there is a complaint, the RCMP have not decided to investigate) into accounting practices inside of the Caisse over which the government has no direct influence.

So the Tories think that because Burke - who made some theatricle political comments about a situation that will not be the subject of an investigation, if one is undertaken, by a force that Burke has no authority over - should resign because Scott - who made direct comments about a then ongoing investigation by a force over which he had final authority - did.

I mean, come on guys.


Spinks said...

You're bang on NBPolitico, I'm really ticked over this one and not alone as a New Brunswicker. Frankly I'm ticked over a couple of things. The Libs said they wouldn't get rid of the power rebate. They did. They also said taxes wouldn't go up. They did. It looks just awful.

Now a multi-million dollar grant which the Caisse won't have to pay back ever? That's incredibly wrong and yeah there is a correlation between the tax increase and the bailout almost to the penny. The Liberals should have created a budget that allowed government to live within its means. I have to do that at my house and so do you. So should government.

T.J. is getting a lot of questions and he should. I'm glad he asked the RCMP to investigate, I really am because this all stinks, but sadly this all came after the grants and loans were announced. Joe Citizen knew right off the bat that this smelled bad but it took a lot of pressure for the Liberals to see it and finally announce a request for an investigation. I don't think Burke needs to resign and I get pretty tired of politicians calling on other politicians to resign seemingly at the drop of the hat. However Burke's drive-by smearing of the PC's before an investigation has even been conducted was pretty low. If there's dirt it will come out but if Burke's going to make accusations, show the evidence he has, or rise above the petty politics.

scott said...

If anything, I think the Tories should focus more on the fact that we received the largest tax increase in over 8 years. And for what? So that the government could respond by bailing out a poorly managed Credit Union of which is currently under RCMP investigation. The optics are horrible here, nbpolitico. And as you know, perception is sometimes reality when it comes to politics.

In other words, intead of focusing so much on Caisse, the opposition should make these tax increases personal since it has the potential to affect so many low income families and small businesses in New Brunswick.

Moreover, it's shameful that the Liberals are content on taking money out of the pockets of low income NBers, especially since this will not only hurt the economy, but it will also destroy job opportunities for thousands of NBers down the road.

Tax increases will not render us more competitive in a global economy. It will only ensure that we remain a supplicant for many more years to come.

Eugene said...

The Caisse was on the verge of bankruptcy and giving a loan to an institution that doesn't qualify under proper loaning practices would have done severe damage to the provincial credit rating.

Now that my friends is spin. Loaning the money will hurt our rating so we had better just give it to them. I expect better than that from you Politico!

nbpolitico said...

Spinks - how was it a drive by smear? This was going on for 2.5 years with the Tories knowing it; they didn't freeze assests, undertake investigations or stabilize the system. They left a small mess alone and allowed it to get bigger and bigger.

Scott - you are right, the perception is bad but sometimes you have to make the right decision even if it isn't popular which is what has happened here.

Eugene - it is not spin, it is true. I presented what I viewed as the three options before the government; neither of the other two were better. If there is a missing fourth option, please tell me what it is. If not, then it is not spin, the Liberals have chosen an unfortunate course of action but the least of three evils.

Spinks said...

Dragging in some relative of Paul Robichaud's during a scrum with reporters and insinuating there's a connection? That's a drive-by. If Burke can back it up, go for it but even still unless he can connect Paul Robichaud himself, that's still a pretty cheap shot meant to...well I'm not sure what it was meant to do. Deflect the smell?

nbpolitico said...

Sorry Spinks, that is the first I've heard of that bit. In the House today they said the smear and prejudgement was the reference to the Tory bungling of the file.

Spinks said...

Sorry my mistake on timing. Burke's comments about Robichaud's relative were from last month not last week. Story here. His comments were repeated by the media last week. Not sure if he repeated them or not. Regardless, it's an odd thing to say.

brunswick said...

I think what we are all loosing sight of here is that this didn’t happen overnight and it didn’t happen over the last three years.... it happened prior to 2004.

In June 2004, the Caisse Populaire de Shippagan was placed under supervision due to financial difficulties arising from poor management practices, especially in the granting of commercial loans. Control of the Caisse populaire was then transferred to Brunswick Credit Union Federation Stabilization Board.

When all this came to a head in 2004 four people were fired including the manager, assistant manager and two other staff members....since 2004 the Shippagan Caisse has been under control of the Stabilization board.

The Caisse populaire de Shippagan has already taken corrective action in its risk management practices, and a dedicated staff is in place to continue to offer our members professional, high-quality services,” said Mr. Charbonneau. “A new executive team has now been in place for 33 months to guide our operations. Since those changes, our work has been focused on restoring soundness to our operations and on identifying work that had to be accomplished in order to enable the Caisse populaire to be a viable financial institution that will continue to provide its members with quality financial services.”

Since 2004 the government has been working on some sort of bailout package for the credit union, whether that be a loan or some other mechanism...... to say the credit union was in imminent danger of declaring bankruptcy is completely false.... according to the credit union’s own press releases they are on target to post a surplus this year.

What I have issue with is the fact that two weeks ago when this deal was announced the government pledged to take several steps to address this matter and one of them was to designate an accounting firm to perform a forensic audit on the Shippagan caisse and if any irregularities arise call in the RCMP. Now as far as I know a forensic audit has not been done and we have the Minister of justice unilaterally and publicly declaring there have been accounting irregularities, were does this information come from? ... and let get this straight, the fact the caisse restated it’s financial from the 2003 fiscal year is not new information and the Justice Minister was aware of this when he announced the bailout a few weeks ago, so these aren’t the irregularities he’s talking about now.... nor is these new accusations about large deposit considered “accounting irregularities”.... the minister must have new information... I hope since he is now no longer willing to wait for a forensic audit before he publicly declares there have been accounting irregularities.

I think it was pretty low for the Justice Minister to insinuate that a member of Paul Robichaud’s family was involved in any wrong doing because they are a member of the caisse's board..... if we extend that logic Premier Shawn Graham should also be scrutinized for being a member of the board of the Rexton credit Union, which is also supervision due to financial difficulties arising from poor management practices.

Eugene said...

I'm pointing out that giving the money would harm our credit rating just as much as loaning it (not that either would it's such a small amount in the grand scheme of things). I'm not saying you are providing the spin. Whoever made that original statement is.

nbpolitico said...

Actually brunswick Jeannot Volpe did say Graham had a conflict of interest on the file because he was a member of the Rexton credit union board. No one bit so they dropped that line of attack.

This is my biggest problem with the Tory opposition - there are legitimate things the criticize but they skip those in a desperate search for a sexy scandal.

Anonymous said...

Another thing these two have in common is at the Tobique First Nation at www.newtfn.com

Anonymous said...

nbpolitico its Shippagan not Shippigan

Anonymous said...

Yes, TJ Burke is a great guy, I am glad that all the Liberals think that he is so honest, thats why for the first time in Canada an Attorneys General has lied about a criminal conviction so if he lied about that, then what is he not telling us about the Caisse and any other leagal matter in the New brunswick government.

Anonymous said...

Burke did not lie about the conviction. He admitted it. Your smear is an obvious Tory attack. The connection is quite obvious that the Tories are after him for more than political reasons. Allow me to explain.

On Friday, Volpe tells the Daily Gleaner that it is open season on Burke. He demands an apology and states publicly that if he doesn't get one then he will start leaking things about him. On Saturday, the Gleaner and Telegrpah who learned from their so-called own sources say Burke had a conviction from 16 years ago. Come on, gimme a break. He would have been around 18 years old! What person out there hasn't made mistakes as part of their own youthfull indiscretion? Can you imagine if we started digging up everyones skelletons?

I could see if he was charged while the Attorney General, but this was more than 16 years ago. I know the guy. I voted for him. He grew up with very little, in a tough part of Fredericton's Northside and has accomplished alot in his 35 years.

This is the lowest form of politics around. I am all for giving politicians, both Liberal and Conservative crap when needed about policies and political positions, but when you smear a guy and embearass his family and attempt to ruin his legal career you have stepped way over the line. I always thought our Country would avoid "Americanizing" our style of political debate, but when you get a former City Police Officer that sits on the backbench of the Concervative Opposition to dig up 16 year charges, it crosses the line!

Anonymous said...

Criminal Code


Corruption and Disobedience

Breach of trust by public officer
122. Every official who, in connection with the duties of his office, commits fraud or a breach of trust is guilty of an indictable offence and liable to imprisonment for a term not exceeding five years, whether or not the fraud or breach of trust would be an offence if it were committed in relation to a private person.

R.S., c. C-34, s. 111.