The New Brunswick government is under fire for propping up a financially troubled credit union with $60-million in public funds.
Just two weeks after Premier Shawn Graham's Liberal government raised personal and business taxes it announced a plan yesterday to bail out the caisse populaire in Shippagan, which is foundering in a sea of debt.
Opposition Conservatives condemned the deal.
"They have opened the door to more stupid agreements like this," said interim Conservative leader Jeannot Volpé.
"What's next? The banks? Underfunded pension funds? It's scary."
Mr. Volpé said taxpayers have no hope of return from the $60-million package, which includes funds to support the credit union system in the province in addition to bailing out the Shippagan operation.
The Tories also accused the Liberals of playing politics since former Liberal premier Camille Thériault is chief executive officer of the Acadian credit union federation, which will oversee the Shippagan operation.
The Shippagan caisse has a deficit of more than $30-million, the result of what was officially described as "weaknesses in its commercial loan portfolio."
The institution has a reputation on New Brunswick's Acadian Peninsula as the place to go for risky loans when all else failed.
It also pays out high interest rates on deposits to attract and maintain customers.
Mr. Volpé said New Brunswickers will be upset knowing that the tax increases announced in the budget this month will be going to bail out a financial institution.