11/05/2012 01:27 EST | Updated 01/23/2014 06:58 EST

MP calls out ACOA minister for saying shipbuilding will offset drop in grants

HALIFAX - It is embarrassing that the federal cabinet minister for the Atlantic Canada Opportunities Agency would tout the multibillion-dollar shipbuilding project instead of decry a $78 million drop in grants within his own department, a Newfoundland Liberal MP said Monday.

Bernard Valcourt, who oversees ACOA, said earlier in the day that the shipbuilding deal will create thousands of jobs and its benefits will extend far beyond Halifax, which won the lion's share of the $35-billion procurement last year.

But Scott Andrews, who represents the riding of Avalon, called Valcourt's comments "a farce."

"What an embarrassment as a minister that you would try to deflect your own inaccuracies as a minister and incompetence as minister to say, 'My department has less money, but don't worry, it's being offset here by shipbuilding," Andrews said from Ottawa.

"Stand up for your department. Stand up for ACOA."

Recently released public accounts data say transfers from the agency dropped to about $236 million in 2011-12 from nearly $314 million the year before.

Valcourt said the federal government continues to invest in the Atlantic provinces despite the dip in grants, pointing to the shipbuilding deal.

"The steel will be cut in Halifax, but ... it calls for supplies from a supply change that is nationwide, if not worldwide," Valcourt said after a news conference in the city.

"A lot of small businesses in Atlantic Canada will be able to take advantage of those offsets that flow from the industrial regional benefits.

"I think the recipe is there. It is now for the private sector to take advantage of it."

Valcourt said the decrease in grants is due to the completion of temporary initiatives under Ottawa's stimulus funding package, including a two-year program that provided funding for recreational infrastructure and another that gave money to communities harmed by the global economic downturn. Funding for those programs was issued through the agency, he said.

He also pointed to a renewed $19.9 million tourism agreement between the four Atlantic provinces — about $10 million of which will be covered by ACOA — as a sign of Ottawa's commitment to the region.

The agency is facing budget cuts totalling more than $17 million over the next three years. Valcourt said that would be made up through "efficiencies in our own operations."

"We are cutting the cost of doing business within. ... At this time, it's proving right," said Valcourt.

"I don't know of any one business who has been turned down because of a lack of funds."

But Andrews said he doesn't buy Valcourt's explanation.

"I'm quite sure that there has been businesses that have been turned down," said Andrews. "But it's not the businesses who have been turned down, it's the businesses that don't apply because they don't want to go through the long process."

In May, ACOA slashed $5 million in annual funding to some 50 economic development organizations in the region as part of a move Valcourt said would help eliminate red tape.