New Brunswick

J.D. Irving boss accuses MLA Jake Stewart of 'grandstanding' on Doaktown mill

New Brunswick forestry policies are back in the political spotlight as U.S. duties on softwood begin to hit the province’s mill towns.

Liberals ask PCs to dial back criticism as work with U.S. on softwood tariffs file continues

Progressive Conservative MLA Jake Stewart says the Liberal government is letting J.D. Irving Ltd. off the hook by not forcing the company to build the mill in Doaktown. (CBC)

New Brunswick's forestry policies are back in the political spotlight as U.S. duties on softwood begin to hit the province's mill towns.

For a second straight day, Progressive Conservative MLA Jake Stewart called on the government to force J.D. Irving Ltd. to start work on a a new mill in Doaktown, a project the company says it's postponing because of the American tariffs announced this fall.

Irving responded by calling Stewart's comments "self-serving grandstanding."

Meanwhile, PC Leader Blaine Higgs wants the Liberals to revisit a 2015 report by Auditor-General Kim MacPherson that the U.S. industry used to argue New Brunswick mills are unfairly subsidized and should be punished.

"I think if you have a dispute like that ... we need to dig and get under the hood and understand the basis for how these conflicting opinions are being made," Higgs said.

"The province should understand the basis of the two viewpoints and then get a path forward that reflects a fair open-market system that can be defended in the U.S. against any negotiation."

The province's minister responsible for trade, Roger Melanson, responded by urging the Tories to dial back their criticism.

New Brunswick Trade Minister Roger Melanson asked the PCs to work with all parties to get the softwood lumber tariffs resolved. (CBC )

"I think it's important that all political parties — this is serious stuff — stick together on this one," Melanson said, noting the 22,000 New Brunswickers working in the industry.

"We need to come together in New Brunswick, all political stripes, with industry, with communities, with employees, and push this file positively forward."

All New Brunswick companies except Irving were hit with a 20.8 anti-dumping duty in the final ruling this fall by the U.S. Commerce Department. Irving got a lower duty of 9.9 per cent after volunteering to be investigated separately by the U.S.

U.S. industry cited audit

U.S. lumber lobbyists relied in part on MacPherson's 2015 audit when it demanded the Trump administration impose tariffs on New Brunswick wood.

In that report, MacPherson said the province had not been properly tracking the proportion of Crown wood versus private wood sold to sawmills since 2002.

The province's industry was traditionally exempt from U.S. softwood duties. But U.S. companies said wood from Crown land was becoming a larger share of the market and had reached the level where mills should be considered unfairly subsidized.

They complained the share of Crown wood had jumped from 41 per cent in 2004 to 51 per cent in 2013, and was likely to grow again under the forestry plan put in place by the previous PC government.

Major forestry companies denounced the conclusions as "false allegations" earlier this month and called on the province to refute the auditor-general's findings.

They quoted the province's Washington lawyer, who said MacPherson had "speculated, without providing any hard conclusions," that the New Brunswick market was distorted by Crown wood.

At a legislative committee hearing last month, a government official acknowledged the province had not acted on MacPherson's 2015 recommendation that the province give private woodlot owners a more reliable share of the market for wood used by mills.

"I think we're continuing to work on that recommendation," said assistant deputy minister Tom MacFarlane.

Higgs defends auditor

Higgs defended MacPherson, saying she's been "very thorough on her reviews to date in any dealings I've had with that office and any recommendations I've seen come out of that office."

He said if her report raised "something we need to address," the Brian Gallant Liberals should do it. "Let's validate that. Let's look at that, and not ignore it."

Melanson said the U.S. ruling that New Brunswick's industry is subsidized was "unfounded and unjustified," and he said American companies relied on more than just MacPherson​'s 2015 audit, "including media clippings," in its complaint.

Opposition Leader Blaine Higgs says the Liberals should revisit a 2015 report by Auditor-General Kim MacPherson that said the province didn't properly track how much Crown wood was sold to sawmills. (Jacques Poitras/CBC)

He was vague about whether the government would revisit the audit and reconsider how it manages Crown lands.

"We are continuously discussing with the industry and trying to see it we can bridge to a solution and potentially help get to a position where this can be resolved," he said.

Melanson said while there has been change in the wood supply over the years, the overall regulatory regime is the same as when New Brunswick was exempt.

"It's not different in principle from what we've done over the years," he said.

Liberals criticize Stewart

Energy and Resources Development Minister Rick Doucet said Friday he was disappointed that J.D. Irving Ltd. had put off construction of a new $25-million Doaktown sawmill to replace its current mill in the village.

Progressive Conservative MLA Jake Stewart says the onus is now on Premier Brian Gallant to ensure the modernization at J.D. Irving's Doaktown mill goes ahead. (CBC)

But he criticized Stewart, whose riding includes the village, for demanding  Gallant "stick it" to Irving over the postponement.

"This is a business decision the Irving company had made," Doucet said. Rather than confront the company, he said the government "will have a conversation with them."

The 2014 contract that the PC government signed with Irving granted the company access to more wood from Crown land in exchange for commitments to new mill construction and upgrades.

But it allowed the company to put off those commitments depending on "market conditions."

Energy and Resources Development Minister Rick Doucet says JDI's postponement of the Doaktown expansion was a business decision. (CBC)

Stewart said Friday he didn't buy that explanation. He said the delays in Doaktown began long before the Trump administration took office and began adopting protectionist trade policies.

"They've had 44 months to start the construction of a two-year project," he said.

The Liberals are "literally letting the company off the hook to not build the mill and trying to blame it on the past," he said. "They have to govern."

Irving responds

J.D. Irving's co-CEO Jim Irving accused Stewart of "self-serving grandstanding" in a written statement Friday and said the company's commitment to a new mill in Doaktown is "firm," with the timing depending on market conditions and a resolution to the U.S. softwood dispute.

He said Stewart hasn't visited the mill since 2014 and it employs more people now than it did then and is running at full capacity.

"We don't need a lecture from Mr. Stewart on investing and creating jobs in New Brunswick," Irving said. "I think our company's record speaks for itself."

Irving also accused Stewart of not having talked to Doaktown Mayor Bev Gaston in more than a year.

"No wonder he didn't have accurate information when he attacked our company on CBC this week."

The company didn't respond to Higgs's comments.

Coon blames PCs' 'one-sided deal'

Green Party Leader David Coon said Stewart's complaint was "quite humorous" given his party gave Irving an out.

"The Conservatives are the ones when they were in government who signed this one-sided deal with JDI that doesn't really obligate JDI to do anything, because every 'commitment,' in quotes, that you see there is subject to market conditions. So what do you enforce?"

He also criticized the Liberals for promising to re-examine the PC forestry plan and not following through.

"We've heard nothing from them on it," he said.