"I firmly believe Hydro-Québec is paying too much," he said in an interview.
"I'm still analyzing the tentative transaction. But between the $4.75 billion debt that Hydro-Québec will absorb and the $5 billion in rate concessions, it's a lot of money for NB Power's assets."
While the deal would see Quebec's giant hydroelectric utility gain unprecedented control of Eastern Canada's power grid, Garcia said it comes at too great a cost for Hydro-Québec.
The utility could make more revenue selling surplus electricity on the spot market in the U.S. rather than routing it through New Brunswick, he said.
In addition, Garcia said the agreement would make big business in New Brunswick - such as the forestry industry - more competitive with Quebec companies, which he suggests could stir up controversy in the province.
The deal would lower industrial rates in New Brunswick by up to 30 per cent to match Quebec's rates, putting companies on both sides of the border on equal footing.
Garcia, member of the board of directors of several corporations including Cogeco Cable Inc., has been critical of Hydro-Québec in the past. In February he penned a study for the Montreal Economic Institute arguing Hydro-Québec be privatized.
"It is time to modify our strategy and obtain returns from Hydro-Québec worthy of the best Quebec businesses," he said in the study, published in February. "Privatizing Hydro-Québec will quickly encourage its management to take the necessary measures to improve the firm's productivity and financial results."
Hydro-Québec's tentative multibillion-dollar takeover of NB Power has also sparked controversy in political circles in Quebec, with the separatist opposition calling the deal a risky gamble.
Parti Québécois energy critic Sylvain Gaudreault questions how lucrative the deal would be for Quebecers.
"It's clear that there are strategic advantages to guaranteeing access to New Brunswick and the northeastern U.S. energy markets," Gaudreault said during a recent interview. "But I question how profitable this will be for Quebecers. It seems like a risky gamble."
Jean Charest's Liberal government recently said it is considering raising electricity rates by about $265 per household to chip away at the province's $4-billion-plus deficit.
"The real concern is that ratepayers will be stuck with another increase to pay for NB Power's $4.75 billion debt," Gaudreault said, adding that electricity rates in Quebec have already jumped by nearly 18 per cent since 2003, when a moratorium on rate increases was lifted.