New Brunswick

Irving Oil's bid to keep price increase evidence secret to be decided Monday

An effort by Irving Oil to keep the information supporting its request for "urgent" petroleum price increases confidential will be ruled on by the Energy and Utilities Board (EUB) early next week after it heard arguments on the issue Friday.

Groups calling for transparency put forward case public trust requires disclosure

The premier’s Irving links have been debated for years, to little effect. Even former Liberal premier Brian Gallant acknowledged in 2018 that the current conflict-of-interest law doesn’t cover Higgs’s situation. (Devaan Ingraham/Reuters )

An effort by Irving Oil to keep the information supporting its request for "urgent" petroleum price increases confidential will be ruled on by the Energy and Utilities Board (EUB) early next week after it heard arguments on the issue Friday.

"We're going to reserve our decision," said acting EUB chair Francois Beaulieu in adjourning the matter for the weekend.

"We'll reconvene Monday morning and the board will issue an oral decision at that time."

Several community and union groups have raised objections to the company's claims for confidentiality around much of the evidence it plans to present, triggering a special hearing just on that issue  

Irving Oil's marketing and commercial divisions have applied for a 62.8 per cent (4.09 cent per litre) increase in the allowed wholesale margin for motor fuels, including diesel and gasoline and a 54.9 per cent (3.02 cent per litre) increase in the margin for furnace oil.  

It is also asking that prior to a full hearing on that request in late March,  85 per cent of the requested increase on motor fuels (3.5 cents) and 99 per cent of the increase on furnace oil (3.0 cents) be granted immediately because of intense financial pressures it says have arisen in the industry during the COVID-19 pandemic.

The increases are substantially more than the 11 per cent growth in inflation that has occurred since the margins last changed in March 2013, but the company says explaining why will involve sharing commercially sensitive information that it needs to protect from competitors.

"The vast majority of the redacted items are clearly costs of Irving Oil in relation to the operations of Irving Oil,"  said company lawyer Len Hoyt in defence of keeping its evidence confidential during his oral argument.

The information is financially and commercially sensitive, he said and would  "be detrimental to Irving Oil's competitive position in a very competitive market place" if it were to be released.

Acting EUB chair Francois Beaulieu says the board will reserve its decision until Monday. (Graham Thompson/CBC)

The company has agreed to allow board members along with the EUB's professional staff and a hired expert view all of its information as well as public intervener Heather Black and any expert she hires.

It's a similar procedure used by the board in 2018 to deal with a confidential settlement NB Power reached with insurance companies over cost overruns during the Point Lepreau nuclear generating station refurbishment. 

However, the idea has not been agreed to by a number of groups intervening in the hearing.

"You cannot make an economic argument without providing numbers," said Abram Lutes with the New Brunswick Common Front for Social Justice 

"I feel that the board and the public intervener will fulfil their roles and do their jobs but I feel that in the interest of the principle of open court and given the wide impact this decision will have on the public of New Brunswick, that yes, other interveners should be able to examine this evidence."

In his formal written objections, Lutes was more pointed in his objections to having only the board and public intervener seeing evidence. 

Public trust in the office of the Public Intervener has been significantly eroded in matters involving this particular applicant before this Board- Abram Lutes,  New Brunswick Common Front for Social Justice.

He questioned the impartiality of the board's hired expert from the "The Kent Group Ltd" and submitted a screenshot from the firm's website advertising Irving Oil as one of its previous clients.

He also questioned whether government appointed public intervener Heather Black could command full public confidence. 

He noted that a public intervener in a similar hearing in 2013, prior to Heather Black, had attempted to bypass a public hearing altogether by negotiating a settlement agreement with Irving Oil, that the board ultimately rejected.

"Public trust in the office of the Public Intervener has been significantly eroded in matters involving this particular applicant before this Board," said Lutes in a seven page written submission.

In addition, Lutes claimed a letter Natural Resources Minister Mike Holland sent to the board January 6th offering his opinions on how Irving Oil's application should be handled has already tainted the hearing in a way that required transparency to repair.  

"This political interference in the process has also undermined public trust in the proceedings," he wrote.

Public intervener Heather Black says she is required by legislation to 'advocate in the public interest.' (Robert Jones/CBC NEWS)

Lutes' list of objections were submitted on behalf of his group, but were endorsed by several other groups participating in the hearing including Grassroots NB, Solidarity Fredericton, Leap4wards and the Canadian Union of Public Employees.

In response, public intervener Heather Black challenged the claim there has been an erosion of public trust in her office and noted she is required by legislation to "advocate in the public interest."

She noted she was not involved in the 2013 hearing Lutes raised in any way and the settlement agreement reached by the then public intervener with Irving Oil had been rejected by the EUB.

"I have some concerns about the spectre of a previous settlement in the previous wholesale proceeding that's been raised," said Black.

"I wasn't involved in that proceeding but as far as I know that matter was not disposed of through a settlement ultimately."

Lutes acknowledged under questioning from board member Michael Costello that he has already come out against an increase even though he has not yet seen Irving Oil's evidence, but insisted he could evaluate information from the company fairly if given access to it.

Irving Oil lawyer Len Hoyt said he doubted any of the groups advocating for the release of company information would support its application no matter what its evidence shows.

"There is not a public interest in any specific intervener in this proceeding having access to this information," said Hoyt.

"I expect  the position of most interveners is simply that no increase should be permitted.  I expect the argument would be no different if the requested increase was three cents per litre or three dollars per litre."  

If granted in full Irving Oil's application will apply to all wholesalers operating in New Brunswick and will raise prices to consumers of various petroleum products by about $60 million.

About the Author

Robert Jones

Reporter

Robert Jones has been a reporter and producer with CBC New Brunswick since 1990. His investigative reports on petroleum pricing in New Brunswick won several regional and national awards and led to the adoption of price regulation in 2006.

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