The Current
with Matt Galloway
Irving Paper lays off nearly half its employees, blames cost of electricity
Announcement impacts 140 employees at company's Saint John plant
J.D. Irving announced that it will permanently reduce operations at its Saint John paper plant, laying off 140 workers.
Workers at Irving Paper were informed Monday morning that the layoffs will take effect immediately, according to a release from the company, which listed the plant's total workforce at 310 employees.
The statement did not use the term "lay offs," but J.D. Irving spokesperson Anne McInerney confirmed the affected employees are losing their jobs.
The statement blamed the province's "uncompetitive industrial electricity rates."
"As New Brunswick manufacturers face more and more significant headwinds, it is becoming increasingly difficult to shoulder the impact of soaring electricity costs and remain competitive in an international market," said Irving Pulp and Paper vice-president Mark Mosher in the statement.
The move comes after J.D. Irving Ltd. advocated last fall at the Electricity and Utilities Board hearing against changes to the way N.B. Power calculates charges.
At the hearing, N.B. Power argued the move was a self-serving attempt by JDI to escape expenses the company wants others to pay for.
N.B. Power also increased subsidies for pulp and paper mills, including three owned by JDI, to help them cope with rate increases.
McInerney said the company would not give any interviews about the announcement, but added in an email that the decision "is no way connected to possible future tariffs."
CBC News has reached out to Premier Susan Holt and Saint John Mayor Donna Reardon for comment.
Irving
Pulp and Paper vice-president Mark Mosher said in a statement that it's
becoming difficult to stay competitive with rising power rates. The
company refused to give any interviews on the announcement. (Graham Thompson/CBC)
In the statement, Mosher went on to say the company had been "working collaboratively" with the province for a solution but that there is "no viable alternative" to continuing operations in their current arrangements.
Mosher said Irving Paper would continue to work with the province to develop a plan to continue operating the remaining 50 per cent of operations.
The release said the Irving Paper plant on Bayside Drive in Saint John manufactures graphic paper for use in magazines, catalogs, newspapers and advertisement flyers.
In an emailed statement, N.B. Power spokesperson Dominique Couture said the utility will continue working with Irving Paper and the province to "explore options."
"As a cost-of-service utility, NB Power's rates are based on the cost of providing electricity to our residential and industrial customers," Couture said in the statement.
"We are committed to doing everything we can to reduce the rate pressure on customers; at the same time we have a responsibility to maintain and invest in our system to ensure all New Brunswickers have the power they need when they need it."
Professor says move not surprising
University of New Brunswick political science professor Herb Emery said no one should be surprised at the move, given JDI's actions at the EUB hearings.
"Big industry has been warning about the issue of these power prices for some time, and everyone decided 'let's call their bluff and see if they mean it,'" Emery said.
It's the same dynamic as in 2006, when N.B. Power raised industrial rates and several pulp and paper mills closed, he said.
Herb
Emery, a UNB political science professor, said the move by JDI should
have been expected given how the province has uncompetitive power rates
for the sector. (Edwin Hunter/CBC)
He pointed to more competitive heavy-industry rates in neighbouring Quebec, and said in other jurisdictions, utilities are used to create cheap power for large industry because the benefits spill over into the wider community.
"But in New Brunswick politically, people don't like the differential treatment of large industry, but if I go to most other provinces, you'll see that large industry gets treated much nicer than in New Brunswick," Emery said.
"There's sort of a recognition that you need these companies, you need these industries."
Coon says JDI claim 'disingenuous'
New Brunswick Green Party Leader David Coon disagrees. He said New Brunswick's rates are better than Nova Scotia, Prince Edward Island, Ontario and other provinces.
"So to suggest it's uncompetitive is disingenuous," Coon said, adding that Canadian rates are much cheaper than those in neighbouring New England states.
"And JDI knows this because JDI has mills in New England and they know how much money they pay there, which is a lot."
The government of New Brunswick's webpage on the "large industrial renewable energy purchase program" lists the average New Brunswick rate for this sector as $93.43 per megawatt hour. The Canadian average is $72.68.
The listed Ontario average rate is $82.76, while Quebec's average is $52.26.
Green Leader David Coon said New Brunswick's rates actually are competitive when compared with many other provinces. (Ed Hunter/CBC)
As a massive consumer of electricity, there's no doubt that JDI has large bills, Coon said.
"But in terms of the rates, they're not at all uncompetitive as they suggest, so I don't know what their agenda is, but they've got one and we'll find out soon."
In the meantime, N.B. Power and JDI can work on finding efficiencies and how to moderate demand, he said.
"But in terms of the rates, right now it is the case that household customers and small business customers are paying a little more so that they pay less, and that's certainly not fair."
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With files from Silas Brown
Residents urged not to despair after Irving Paper cuts Saint John workforce in half
Coun. Paula Radwan says people were stressed already, and her heart goes out to those hurt by job losses
Saint John Coun. Paula Radwan says she was shocked when she learned J.D. Irving Ltd.'s paper plant had cut 140 people from its workforce.
After council's regular meeting Monday, Radwan encouraged residents affected by the news earlier in the day to seek help from provincial resources.
"I really felt sick to my stomach this morning when I saw the press release because I know how it is to get that news about work," said Radwan, whose ward in east Saint John includes Irving Paper.
"My heart goes out to people because it's very stressful when you hear that your employment has ended."
Irving Paper employees were told the job cuts would be permanent and take effect immediately. The topic was not discussed during Monday night's council meeting, but Radwan and Mayor Donna Reardon spoke with reporters later.
The company has blamed the workforce cuts on what it called the province's "uncompetitive industrial electricity rates," saying increasing costs made it difficult for the company to remain competitive in an international market.
Company spokesperson Anne McInerney said the decision was not connected to the threat of tariffs, which U.S. President Donald Trump says he'll carry out next week..
News of the cuts was a gut-punch for Coun. Paula Radwan, who urged residents to use their connections to land on their feet. (Nipun Tiwari/CBC)
Radwan acknowledged the JDI decision was made because of energy rates, but she said people were already stressed by other forces. She expressed hope things will turn around for the mill.
"There are a lot of things that people are worried about right now with the potential tariffs coming from the U.S.," she said. "But I didn't really expect anybody to take any measures this big this quickly.
"But JDI is a very resilient company, so I hope that they'll be able to find new avenues and even expand services in the future."
Saint John Mayor Donna Reardon encouraged people to 'hold fast' because good things are still happening in the city. (Roger Cosman/CBC)
Mayor Reardon said she didn't know the particulars of the cuts at Irving Paper beyond the company's statement, but she hopes residents can stay positive.
"Job loss for any city is never good," Reardon said.
"My message to people is that there are lots of good things happening in the city — we are trying to encourage business and industry and to support business and industry. I say hold fast."
Mark Mosher, the company vice-president, was at the council meeting Monday for another reason — to be present for a public hearing on an Irving Pulp and Paper proposal to convert a portion of park in west Saint John into a parking lot. He declined to speak to reporters.
Mosher said in the earlier statement that Irving Paper would continue to work with the province to develop a plan to continue operating the remaining 50 per cent of operations.
Radwan said the workers who lost their jobs should take advantage of employment resources such as Working New Brunswick, part of the province's Department of Post-Secondary Education, Training and Labour.
"Please take a deep breath and try to decompress," she said.
"If you don't have your resumé all put together, there are people that can help you update it at Working New Brunswick — I think I'd be visiting them as soon as possible, to see if I could find other avenues of work."
Radwan also encouraged trying city connections to seek new job opportunities.
"You never know. Sometimes when one door closes, another one opens."
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N.B. Power disputes Irving claim industrial power rates are uncompetitive
Utility answers criticism that it's to blame for job losses in Saint John
J.D. Irving Ltd.'s claim that "uncompetitive" electricity prices charged by N.B. Power is exclusively responsible for forcing it to close a production line at its east side Saint John paper mill has pushed the provincial utility and its rates into the spotlight.
And N.B. Power is not taking the criticism quietly.
"N.B. Power offers a competitive large industrial rate," spokesperson Dominique Couture said Tuesday in an email directly contradicting the company's claim.
"N.B. Power large industrial rates are lower than Nova Scotia, P.E.I., HydroOne (in Ontario), Alberta and are on par with Saskatchewan."
On Monday, J.D. Irving announced it was permanently closing down half of its production at Irving Paper and eliminating 140 positions.
In a statement company vice-president Mark Mosher blamed "the impact of soaring electricity costs" for the decision.
J.D.
Irving Ltd. bought its east Saint John paper mill in 1981. Since 2012,
the mill has benefited from millions of dollars in property assessment
and tax reductions and rate subsidies. (Roger Cosman / CBC News)
N.B. Power did raise industrial and residential rates 13 per cent in the past year and has plans to raise them more than nine per cent again this year, beginning on April 1.
Still N.B. Power disputes that has made electricity pricing uncompetitive in New Brunswick.
To bolster its claim, it has been circulating an annual publication by Hydro Quebec showing New Brunswick's large industrial electricity rates, even after this year's increase, still rank well below North American averages.
That publication, which compared rates for different customer groups in 22 Canadian and U.S. cities as of April 1, 2024, places N.B. Power industrial rates eighth overall, with prices 18 per cent below the average of the group.
But the utility notes that comparison involves the standard large industrial rate offered by N.B. Power.
Industrial
rates in Quebec are 28 per cent below what is available in New
Brunswick thanks to cheap power produced in the province's hydroelectric
generating stations. (Ryan Remiorz / Canadian Press)
It does not include the application of an additional 22 per cent discount N.B. Power is compelled to provide to provincial pulp and paper mills, including the Irving Paper mill.
That rate discount, estimated to be worth $12.6 million this year, is mandated by provincial regulation.
This year the program had N.B. Power buying renewable energy generated by the six mills at 12.2 cents per kilowatt hour and instantly selling it back to them at 9.3 cents.
The utility is required to engage in those transactions until it loses enough money to the mills to achieve the targeted discount amount.
Named the Large Industrial Renewable Energy Purchase Program, the scheme has cost N.B. Power more than $138 million since its inception in 2012.
Applied to the six mills, it moves their large industrial rate to fifth lowest among the 22 jurisdictions in the Hydro-Quebec study, better than seven of 12 Canadian cities in the survey and all 10 American locations.
N.B.
Power is pushing back against claims its industrial rates are
uncompetitive. The utility charges less than most North American
jurisdictions, according to some comparisons. (Michael Heenan / CBC)
Couture said the program helps the "competitiveness" of New Brunswick pulp and paper mills by providing them rates that are lower than most in North America.
The Hydro-Quebec survey mirrors information published by the Energy Information Administration in the United States. It shows that in November, only Louisiana out of 50 states was charging a standard industrial power rate below what N.B. Power charges New Brunswick pulp and paper mills.
However, J.D. Irving Ltd. is less concerned with those averages, than it is with rates charged by jurisdictions with significant pulp and paper operations.
More than 60 per cent of pulp and paper production in Canada is based in Quebec and British Columbia. Both provinces have substantial hydroelectric production and offer industrial power rates to mills between 10 and 28 per cent below N.B. Power's subsidized rate.
The company did not respond Tuesday to a request for information on what power rates it believes are required to keep Irving Paper competitive.
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Unifor 'pushing and advocating' for laid-off Irving Paper workers
100 of the 140 laid-off JDI workers are represented by Unifor
Unifor says it won't stop fighting for unionized paper mill workers receiving layoff notices this week from J.D. Irving Ltd.
Jennifer Murray, Atlantic regional director of Unifor, said 100 of the 140 people laid off from Irving's Saint John paper mill workforce are Unifor members.
"Today, we have to point our heads to these young families in Saint John and what their futures will look like," Murray told CBC Radio's Shift. "We're not going to stop pushing and advocating for these workers."
Workers of these specialized jobs were notified Monday they would be laid off officially within 45 days, said Murray.
"People are thrown into chaos … wondering where are they going, how are they going to put food on the table," said Murray.
The company has blamed the workforce cuts on what it called the province's "uncompetitive industrial electricity rates," saying increasing costs made it difficult for the company to remain competitive in an international market.
Murray said JDI was in discussion with Unifor regarding rising energy costs. Unifor had several meetings with the provincial government to find strategies to protect these jobs.
J.D. Irving Ltd. bought its east Saint John paper mill in 1981. (Roger Cosman / CBC News)
"The timing of this was not expected," said Murray. "Obviously, this demonstrates the importance of collaborating and moving forward together."
She said it's been all hands on deck since the news, with local and national members of the union meeting with JDI and government to make sure these workers' needs are met.
So far, JDI has said there may be opportunities for some of these workers to be put in positions elsewhere within the company. Murray said it is still very early in those discussions and how many workers may get these opportunities is unknown.
She is hopeful that JDI will reconsider these layoffs.
Unifor had a meeting with Natural Resources Minister John Herron Tuesday on strategies to bolster the forestry industry in the province.
Murray said these layoffs are just another blow to the industry that is already facing the threat of tariffs from the U.S.
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