Premier David Alward is questioning J.D.  Irving Ltd.'s explanations for a sawmill closure in northwest New Brunswick and says the closure won't influence his government's position on harvesting of wood on Crown land.

J.D. Irving Ltd. announced last week it was shutting down its mill in Clair, putting 73 people out of work, due to economic conditions in the United States and the high Canadian dollar, as well as high power rates and uncertainty about wood supply.

Alward said on Monday that he isn't convinced power rates were really a factor in the mill's closure.

"This isn't about energy rates," he told reporters on Monday.

"This is about market conditions."

Geoff Britt, a J.D. Irving Ltd. communications officer, issued a statement on Tuesday further clarifying the company's rationale for closing the northwestern mill.

Britt said high power rates are a factor for the company's paper mill, but he said the sawmills are facing pressure because of market conditions.

'I don't know that it puts any more pressure on the allowable cut decision.'—Premier David Alward

"Market conditions have regrettably resulted in the indefinite closure at Clair. In the case of Sussex, which has been reduced to one shift, the issue is the available wood supply that is not being delivered," Britt stated in an email.

"Competitive power rates are critical to the Irving Paper mill which many sawmills depend on as a customer for wood chips."

The forestry company also said last week a planned reduction in the amount of wood forestry companies can harvest on Crown lands threatens the viability of its mills.

The Department of Natural Resources may reduce the harvest over a five-year cycle, starting next year.

Natural Resources Minister Bruce Northrup has already postponed the release of the 2012-17 wood allocation plan until next January or February.

The annual allowable cut decision is based on computer modelling and other projections of whether industrial cutting will leave enough wood for the province's forests to keep regenerating themselves.

The provincial government's latest forecast would have reduced the amount of wood forestry companies could cut on public land over a five-year cycle starting next year.

The premier said on Monday the company's decision to halt operations in Clair will not affect its upcoming decision on the wood allocation plan.

"I don't know that it puts any more pressure on the allowable cut decision," Alward said.

"We have to make the right decision that is good for today and also is good for tomorrow."

Industry lobby to cancel cuts

J.D. Irving Ltd. and other forestry companies have been lobbying Alward to reverse the planned reduction, using newspaper ads, letter-writing campaigns and petitions.

Saint John Lancaster Progressive Conservative MLA Dorothy Shephard tabled a petition in the legislature in June on behalf of Tory and Liberal MLAs who had attended an industry-sponsored luncheon and information session.

It was described as an "urgent request" and called on the provincial government to "maintain and increase the allocation levels" for mills, noting many jobs rely on the forestry industry.

Environmentalists, however, support the planned reduction, saying it's necessary for Crown forests to be sustainable. They argue companies have cut too much in the past and forest growth needs to catch up.

Alward, who has portrayed his government as being driven by public consultation, said no decision will be made until government officials review two studies of the forest industry.