By John Chilibeck | The Daily Gleaner
New Brunswick Power’s plan to save money by offering employees early retirement packages a couple of years ago was a failed exercise, says the province’s auditor general.
Paul Martin released a withering report Tuesday on the public utility’s plan, which he said overstated savings and did not meet one of the program’s main objectives. Instead of decreasing staff, NB Power has more workers than when it began handing out the early retirement packages.
One of the employees who accepted the package was still working when the auditor did his investigation a couple of years later, and three more were hired back on contract.
But NB Power‘s CEO defended the plan, insisting it had found $13 million in annual savings for people paying their electricity bills.
“I would contend NB Power’s saving amounts were overstated,” the auditor general told reporters at the legislature on Tuesday. “Their overall plan of establishment – the number of employees – has not decreased. It continues to grow. I don’t know how they think they saved money. I can’t come up with a number that makes sense.”
NB Power CEO Lori Clark told Brunswick News only staff who weren’t essential were offered packages. However, the overall staff complement has grown, she said, because certain parts of the organization required new positions.
This includes personnel to come up with an improvement plan for the faltering Point Lepreau nuclear station and deliver the enhanced energy savings program that offers free heat pumps and insulation to low-income households.
“These were targeted reductions in specific areas of the company where we were not replacing people,” Clark said. “But our business is growing and the additions to the staff were in areas that were different than the downsizing. So, if we had not had these reductions, our complement would have been up by 148 people.”
She also said some contractors NB Power was using were hired to be permanent staff because it allowed the organization to pay them 30 to 40 per cent less.
As for the one employee who the auditor general found was still working two years after accepting an early retirement package, Clark described that as a one-off.
“He’s not still working. He has retired,” she said. “We hadn’t anticipated that employee leaving, because of the particular skillset he had. But he asked if he could be eligible for the program. So, we were trying to find a way that we could actually allow that person to go and eliminate the need for the position. And it took a little longer because he had some very specific knowledge and skillset that we had to make sure we could replace.”
Regarding the three who were hired back on contract, she said at the time they were offered the early retirement packages, NB Power didn’t see the need for them.
“We had a couple of projects that got approved where we needed their particular skillsets that we couldn’t source internally, and it would have cost us more to go to a consulting firm to get that support. So, we hired those employees back, really to ensure energy security for our customers.”
But New Brunswick’s auditor general found other oddities.
Eight employees had already notified NB Power they were retiring prior to the buyout offer, but were still offered the package, which they gladly took.
A total of $1.15 million was paid to those workers to take early retirement.
Martin estimated that of the 148 people offered the package, 100 were probably going to retire soon anyway.
And, contradicting the CEO, the auditor general said 23 of the 148 positions were not eliminated and soon filled with other employees.
The report noted that the early retirement package was offered in the fiscal year 2022-23 when NB Power was facing significant financial pressure, a tight spot it’s still in today.
In total, 176 employees sought the package, but it was only offered to 148, even though 618 workers fit the age criteria for leaving early.
The workers had to be 55 years or older and have more than two years’ service, a criterion that was eventually changed to 58 years or older. The incentives to take the package included lump sum payments, additional years of service counting toward their pension, a health spending account, and more.
NB Power spent $17 million offering the early retirement packages.
“It’s pretty shocking that $17 million was spent on that package and somehow NB Power managed to increase their number of employees,” said interim New Brunswick Progressive Conservative Leader Glen Savoie, also the head of the Official Opposition. “That just shows the issues that are happening within NB Power itself.”
His Tory government was in charge when it began pressuring NB Power to find savings, and the early retirement packages went out.
He told reporters he was unconvinced NB Power should offer another version of the package to reduce staffing.
“The definition of insanity is doing the same thing over and over again and expecting a different result. So, unless NB Power can provide or prove an ability to get a different result, I’d be very hesitant to have them go through the process again.”
The auditor found NB Power did not do a proper “value for money” exercise that would have ensured savings.
He had harsh criticism of NB Power’s human resources committee, which he said gave initial approval for the program without a proper analysis. Furthermore, NB Power made significant changes without seeking formal approval from the board of directors.
In the end, NB Power’s plan to reduce personnel to find savings didn’t happen, at least not overall. The total staff at the public utility has increased by 157 since 2022.
Three years ago, NB Power had 2,953 positions. By 2025, it had 3,193 positions, not all of them filled.
“It’s a boondoggle,” David Coon, leader of the small opposition Green Party, told journalists. “A large number of the people who benefited from the package were going to retire anyways. This was supposed to be an encouragement for early retirement to save some money, and the vast majority were going to retire in any event. NB Power didn’t need to incent them to retire.”
Coon said it was an example of systemic problems within NB Power, including the firing of the previous CEO, Keith Cronkhite in 2022, and the sudden resignation of the board chair, Charles Firlotte, in 2023, both without clear explanation.
“There are fundamental problems, organizationally and institutionally, at NB Power,” Coon said. “This is just one consequence of those.”
The party leader noted that NB Power’s financial problems – such as its nearly $6-billion debt – dwarf the lost savings in an early retirement program. Nevertheless, he hoped the review the Liberal government announced earlier this year of NB Power would lead to better governance and decisions.
That review, being carried out by three experts and including public consultations, is scheduled to be completed by the end of March 2026.
René Legacy, the Liberal government’s energy minister, was unavailable for an interview. A government spokesperson deferred questions to NB Power.
