New Brunswick

Irving blames softwood lumber duties for stalling Doaktown mill upgrade

J.D. Irving Ltd. put a $25 million overhaul of a Doaktown sawmill on hold after this month's U.S. Commerce Department's decision on softwood lumber duties, the company says.

Project promised after JDI's Crown land deal 3 years ago would have modernized sawmill

J.D. Irving Ltd. says new softwood lumber duties are behind the company's decision to put a mill modernization project in Doaktown on hold. (Canadian Press)

J.D. Irving Ltd. put a $25 million overhaul of a Doaktown sawmill on hold after this month's U.S. Commerce Department's decision on softwood lumber duties, the company says.

"We have undertaken engineering for the mill expansion," JDI vice-president Mary Keith said. "Next steps are dependent on market conditions, including the resolution of the softwood lumber duty issue currently facing New Brunswick."

The sawmill modernization was one of several projects promised three years ago when the David Alward Progressive Conservative government signed a 25-year wood allocation contract with JDI as part of its forestry plan in 2014.

But the company's Doaktown commitment then appeared to waver, with construction start dates pushed back twice in 2015 and 2016.

Last February, Doaktown Mayor Bev Gaston revealed the project would go ahead this year and would be even bigger than was originally planned.

That was confirmed by Mary Keith in a Feb. 17 statement to CBC.

But the statement also cautioned the schedule could change, subject to "market conditions, including the course of the softwood lumber trade agreement."

The onus right now is on the premier. This is his chance to stick it to big business for the benefit of the people in Doaktown and Miramichi.- Jake Stewart, PC member of the legislature

The first sign of new trouble for Irving's plans came earlier this month when the U.S. Commerce Department announced a 9.9 per cent anti-dumping duty on the company, up from a preliminary duty of 3.34 per cent the department announced earlier this year for JDI.

Other New Brunswick companies were hit with duties of 20.8 percent.

"When your revenues are cut by 10 per cent, capital projects will be reviewed," said JDI vice-ppresident Jerome Pelletier, November 3rd.

This week's announcement makes the Doaktown project the first victim of the U.S. decision.

Southwest Miramichi Progressive Conservative MLA, Jake Stewart was furious with the announcement, claiming a PC government would have ensured  from the beginning the company went ahead with the project as agreed in the 2014 deal.

"The onus right now is on the premier," Stewart said. "This is his chance to stick it to big business for the benefit of the people in Doaktown and Miramichi, who've been getting the shaft on forestry for more than 10 or 15 years now."

A list released by the company says other mill modernization and expansion projects associated with the wood allocation contract have been completed or are under construction.