Stephen Lund plans to enact Atcon recommendations

The chief executive officer of the province’s newest economic development agency says he plans to move quickly to to prevent another Atcon-style fiasco.

But Stephen Lund says ultimately the responsibility will still rest with elected politicians — as he says it should.

​Lund officially takes over as the head of Opportunities New Brunswick this week. By law, the agency comes into existence on April 1.

And Lund says he’ll be in a hurry to act on recommendations by Auditor-General Kim MacPherson in her recent report on loan guarantees to the Atcon group of companies.

New Brunswick taxpayers lost more than $70 million after the 2009 Liberal cabinet approved those loan guarantees over the advice of the civil service.

“I have agreed with her that I will implement her recommendations in full within six months, and if I don’t, I will explain exactly why,” Lund told CBC News.

“I also plan on bringing in a third party soon to take a look at our processes and controls to make sure we have the right controls in place, and that we can implement the recommendations of the auditor-general as soon as we can.”

MacPherson warned in her audit that another Atcon-scale loss could happen again and set out 19 recommendations to guard against that happening. Her recommendations include:

• The department get an independent assessment of whether a company has enough assets to cover its loans or loan guarantees.
• The province make sure a company owner has enough personal assets when he or she uses them as security on a loan.
• The department flag people or companies looking for provincial help if they defaulted on government loans or loan guarantees in the past.
• The province put a cap on the total assistance for any one company or group of companies.

Without changes, “the only impediment for current and future governments is that they will ultimately be held accountable by the electorate for their decision making,” she wrote.

MacPherson concluded cabinet’s decision to ignore emphatic warnings from bureaucrats about Atcon showed a “troubling disregard” for tax dollars.

In the days since MacPherson’s audit, Premier Brian Gallant has repeatedly pointed to Lund’s private-sector experience as a factor that will prevent another Atcon.

Opportunities New Brunswick will be able to approve subsidies to companies below $2 million on its own.

Amounts above that will have to go to the new Jobs Board for approval from its officials, drawn from the private sector.

But Gallant and his cabinet will get the last word, and Lund says that’s important for accountability.

My own belief is that we elected people in positions of authority and at the end of the day they should have the final say on what happens in our province.- Stephen Lund, CEO Opportunities New Brunswick

“My own belief is that we elected people in positions of authority and at the end of the day they should have the final say on what happens in our province.”

Lund started his career in commercial banking, then moved into venture capital. He was CEO of Nova Scotia Business Inc., that province’s economic development agency, for 12 years. He worked for Irving Shipbuilding Inc. before taking the Opportunities New Brunswick job.

“By setting up a new organization with a private-sector board, we will have the systems and controls in place,” he said. “It’ll never be perfect, mind you, but we will make sure we do the best job we can.”

Lund does disagree with one of MacPherson’s recommendations: her audit revived a previous auditor-general’s recommendation for a “do-not-lend” list of subsidy recipients that had lost taxpayer dollars in the past.

Lund says that would be too restrictive because it might disqualify a young entrepreneur with a failed start-up from ever getting help again.

But he says he doubts Opportunities New Brunswick would look kindly on a request from anyone who was involved with Atcon.

“The bottom line is: we’re not likely, if there’s a bad experience, to want to have the same dealing with a company in the future, or a person.”