The Irvings' media monopoly and its consequences

Fifth in a six-part series on one of Canada's richest families: The House of Irving.

Reuters had a scoop.

Last fall, two of the news agency’s reporters were examining reports that Irving Oil Ltd. submits to New Brunswick’s department of environment, detailing problems with its pollution control equipment.

Irving Oil is the dominant energy company in the Maritimes and New England. In Saint John, the company operates the largest oil refinery in Canada. Adjacent to the refinery, Irving Oil owns a marine terminal where oil is loaded and unloaded from ships.

At the terminal, the Reuters reporters discovered that vapor recovery units (VRU) installed by Irving Oil in 2011 had been shut down 37 per cent of the time for more than two years prior to March of 2015 due to mechanical problems. In fact, for the first three months of last year, the VRUs were offline nearly 80 per cent of the time. These units capture vapors that escape while ships are loading oil – vapors that contain volatile organic compounds (VOCs), including carcinogens like benzene. Air pollution is a hot topic of concern for Saint John’s 70,000 residents.

Reuters published its scoop in November. What was noteworthy, however, was how the problems with the malfunctioning VRUs were not revealed by reporters at Saint John’s local daily paper, the Telegraph-Journal. Nor did the Journal reprint the Reuters story.

A week after the Reuters piece was posted, the Telegraph-Journal published a story about local environmental activist Gordon Dalzell lodging a complaint with the provincial government over the VRUs. Only at this point was the Reuters story and its findings mentioned. “(The Telegraph-Journal) did cover it but they only covered it when I complained about (the issue),” says Dalzell. “They did not cover it independently but covered the reaction to it.” (They also printed an update to Dalzell's complaint the following month.)

Last month, Reuters published a story that said Irving Oil’s refinery spewed an excessive amount of ash-like catalyst into Saint John as regulators launched and later abandoned a study of its health impacts. These emissions exceeded the two-month rolling average threshold established in Irving's operating permit at least a dozen times since 2010, according to the documents. The Journal does not appear to have written about this matter either.

Patricia Graham, former editor-in-chief of the Vancouver Sun and ombudswoman for Brunswick News Inc. (BNI), the company that owns the Telegraph-Journal, said in response to a question about why Reuters was finding these stories and the Journal had not, that "(BNI's) editors independently assign the journalists available to them to the stories they believe will serve readers. There is no reason to expect two news organizations to have the same coverage."

BNI noted in a statement that this past year its newsrooms were nominated for a Michener Award for meritorious public service and the Journal won a Canadian Journalism Foundation Jackman Award for excellence in journalism for a series on deficiencies in New Brunswick's childcare facilities, along with two National Newspaper Awards and a record 19 Atlantic Journalism Awards, taking home eight gold awards.

As head of the Saint John Citizens’ Coalition for Clean Air, Dalzell says he frequently takes his pollution issues with Irving-owned industrial facilities to media outlets such as Reuters or the CBC (although he does approach the Telegraph-Journal too, where he is quoted in their stories). And that’s because Dalzell is not always confident the paper will be interested.

His hesitation is not surprising given that the Telegraph-Journal is owned by the Irving family, which in turn oversees the Maritimes’ most dominant corporate group, with as many as 250 subsidiaries and valued at an estimated $10-billion. In fact, the Irvings own all three of New Brunswick’s English daily newspapers – the Telegraph-Journal, Fredericton’s Daily Gleaner and Moncton’s Times & Transcript – along with 18 of the province’s 25 community papers and four radio stations.

The papers are operated by BNI, which is owned by Canada’s fourth richest man, 88-year-old billionaire James (JK) Irving. BNI’s vice-president and publisher is Jamie Irving, JK’s grandson. Jamie, who has a master’s degree in journalism from Columbia University, was appointed publisher of the Telegraph-Journal at age 27 back in 2004 (five years later, he was briefly relinquished from this post due to a journalistic scandal: in a dramatic front page story, the Telegraph-Journal falsely accused then prime minister Stephen Harper of pocketing a Communion wafer during the funeral of former Governor General Roméo LeBlanc instead of placing it in his mouth. The paper apologized to Harper on the front page three weeks later).

The combination of the Irvings being the most powerful dynasty in New Brunswick – whose companies employ one in 12 people in the province – while at the same time owning its most important media outlets is unprecedented in Canada, and perhaps the world. In fact, a 2006 Senate report on the media remarked that: “The Irvings’ corporate interests form an industrial-media complex that dominates the province.”

BNI disputes this, saying in a statement that “the newspapers have editorial independence and report objectively on Irving-owned enterprises. They also frequently publish commentary and letters both critical and supportive of them, reflecting the views in the community. The newspapers have independent journalists and editors who are given free rein to report on matters of public interest.”

Nevertheless, the Irvings’ media monopoly has been a source of frustration for decades in New Brunswick, largely over concerns about what their newspapers omit – specifically any critical coverage of the Irvings and their companies. “We are in a pretty bad state when it comes to media diversity, particularly when there is a big issue – that’s when we see it most,” says Erin Steuter, a sociologist at Mount Allison University in Sackville, NB, who’s studied the Irvings’ media holdings. “They have a bit of a stranglehold and it's causing problems in our communities.”

Indeed, many of the controversial issues roiling New Brunswick inevitably involve the Irvings – directly or indirectly. And not surprisingly, experts like Steuter find their newspapers take editorial positions mostly supportive of the Irvings’ business interests. Or, when internal issues within the family happen, she maintains, “it’s not covered at all, and there is a big cone of silence around that.”

Take, for instance, what happened in November of 2007 when Gordon Pitts, a Globe and Mail business reporter, managed to talk to JK Irving at an event in Toronto. At the time, JK and his brothers Arthur and Jack managed the Irving empire jointly. But during the conversation with Pitts, JK admitted the brothers were in the process of splitting up their father’s empire into three separate companies. This was big news and Pitts rushed back to the newsroom where he and his colleagues got the scoop onto the front page of the Globe’s business section.

Back in New Brunswick, however, there was only a small story on the front page of the Telegraph-Journal’s business section with the headline “’It’s Business as Usual,’ Irving Says”, which talked obliquely about succession within the Irving family (this, despite the fact the Journal had sent a reporter to cover the same event Pitts attended). The Irving papers published nothing more. “The breakup of the Irving family holdings was a huge business story that was never covered by the Irving papers,” says Steuter.

Then there was the controversy about what happened to Kenneth Irving, Arthur Irving’s eldest son. The 85-year-old Arthur, Canada’s second-richest billionaire by one account, controls Irving Oil and Kenneth had become the company’s CEO back in 2000.

But in the summer of 2010, Kenneth was suddenly gone and the circumstances of his departure never fully explained. Two years later, Arthur and Kenneth ended up in court in Bermuda over a battle about money and access to information about the family’s offshore trust. The falling out between father and son was so bitter they’ve reportedly not spoken to one another for years. Yet Kenneth’s fall from grace and banishment – a person who’d been groomed as Arthur’s heir apparent since he was a young man – and his problems with his father never made it into any of the Irving newspapers in any detail.

A handful of stories did refer to his departure in passing for “personal reasons” due to a “health setback”. The Bermuda court case was never covered or mentioned.

Indeed, this sort of non-coverage about the Irvings’ internal affairs sometimes makes it difficult for New Brunswick residents to glean what’s going on. One New Brunswick reporter, who does not work for the Irving press and wished to remain anonymous, jokes that it’s akin to “Kreminology – you know how US intelligence would look at the photos of the Politburo. That’s sort of a gross comparison, but that was kind of how people were trying to figure out (the brothers’ split).”

Meanwhile, Patricia Graham, BNI's ombudswoman, said in a statement that "It is not correct that Brunswick News newspapers do not publish stories about leadership within Irving companies."

Driving out media competition?

In his 2014 book, Irving vs. Irving, about the history of the Irvings’ media holdings, CBC political reporter Jacques Poitras – who's based in Fredericton and once worked for the Telegraph-Journal – published a comment from JK Irving, saying that when he eats his morning breakfast and reads his company’s papers, “before I get done my porridge, I could have a heart attack over what I read in the damned newspaper.” JK’s son Jim, who is co-CEO of the family’s company, J.D. Irving Ltd., has apparently said “We sign their paycheques and they piss all over us” about the journalists they employ.

Despite being unhappy and reluctant media barons, Poitras writes that the Irving family would rather own the province’s newspapers than allow anyone else to do so. This was best illustrated in the case of what happened to Ken Langdon when he tried to set up a newspaper in Woodstock, NB.

Langdon first got into the newspaper business in 1994 when he bought the Carleton County Advertiser. Three years later, he sold the paper to the Irvings who kept him on as a manager. Eventually Langdon became the publisher of the Bugle-Observer, another paper the Irvings had acquired.

In the end, Langdon helped BNI consolidate three regional papers into one, making it profitable. But by 2007, he could see his days were numbered with the Irving-owned BNI. “Once everything was consolidated, they didn't need a publisher – they needed a general manager,” he says. “The writing was on the wall they were going to get rid of me and bring someone that earned a lot less money.”

Langdon decided to leave, informing BNI he intended to start his own paper. In September of 2007, eight days after leaving the Bugle-Observer, the Irvings got a court order and sent forensic accountants to go through Langdon’s files in his home and office. They were accusing him of taking proprietary information with him. “They locked it down tight and worked away there for two or three days and then left,” he recalls.

BNI also got a court injunction to prevent him from using any company information and from soliciting the Bugle Observer’s advertisers or its employees. “They said I took the customer list,” says Langdon. “A customer list is published in the paper every week — it’s their advertisers. When we were competing with the Bugle we used to see who is advertising, make note…and send the salesperson there. A sales list is something that is published in a newspaper every week. It's comical.”

Langdon was forced to hire lawyers to fight these injunctions – and won. And soon he launched his paper, the Carleton Free Press, which was competing with the Bugle-Observer.

That’s when Langdon says BNI took the next step to undermine his venture. “They cut subscriptions prices by 50 per cent (at the Bugle-Observer),” he explains. “They offered free colour to their advertisers. A spot we were selling for $200 they were giving away for free… They got very aggressive.”

Langdon filed a complaint with the federal Competition Bureau, which he says dismissed it without fully investigating the matter. And a year later, in October of 2008, the Carleton Free Press was out of business. “No, (the Irvings) don't play fair,” he says. “They are a ruthless group, no question about it.”

BNI, in a statement, says that they respect the right of Langdon and any other person to compete in the newspaper business, but took its court action because he “removed extensive confidential and proprietary documents owned by BNI, just prior to his resignation, without permission and in breach of the BNI Code of Conduct” which they claim would have given him an unfair competitive advantage.

K.C. Irving grabs control of the papers — and won't let go

The fact that Canada’s fifth richest family owns all of the English daily newspapers in New Brunswick is not surprising given the business philosophy of the empire’s founder, Kenneth Colin (KC) Irving. KC adopted what’s called “vertical integration” whereby you try and control all aspects of the production chain. And given his holdings in forestry and pulp and paper, owning newspapers was a logical business move.

KC bought his first newspaper in 1936, and by 1970 had quietly snapped up all of the province’s five English dailies, a TV station and four radio stations. The papers were notorious for not writing about the Irvings – and for their shoddy quality. It was also in 1970 Senator Keith Davey’s commission on the media remarked that the Irving papers were “the kind that prints news releases intact, that seldom extends its journalistic enterprise beyond coverage of the local trout festival, that hasn't annoyed anyone important in years. Their city rooms are refuges for the frustrated and disillusioned, and their editorial pages are a daily testimony to the notion that Chamber-of-Commerce boosterism is an adequate substitute for community service.” The report referred to New Brunswick as one of two “journalistic disaster areas” (the other was Nova Scotia). Davey recommended that the Irving newspaper monopoly be broken up.

By 1972, the federal government had brought an anti-trust case against KC due to his control of the province’s newspapers – and won. But by then, KC has passed management of the papers to his sons, and the Irvings had the combines case overturned on appeal. In 1981, the Kent Commission on newspapers argued that a press rights panel be established to break up newspaper monopolies – but the Trudeau government refused to follow through.

In 2006, when the Senate held another inquiry into the Canadian media, their report said “probably the most emotional testimony was prompted by the extensive, and growing, media ownership by the Irving family in New Brunswick… Numerous witnesses expressed concerns about the implications of a dominant media force linked to a dominant industrial base.” The Senate report noted that: “To several of these witnesses, the media-industrial links within the Irving empire introduced an unhealthy bias into the news received by New Brunswickers.” And again noted, “that the (Irving) papers routinely publish their own press releases as news stories.”

In response, BNI noted “that the reality in today’s multi-channeled media environment is that no individual and no single company dominates, or can dominate, the media" and that "New Brunswickers are not monolithic and no newspaper is loved by everyone. The newspapers have many thousands of loyal customers who feel well-served by them."

The papers have not always been so dismal. In 1993, the Irvings hired Neil Reynolds, the dynamic former editor of the Kingston Whig-Standard to revive the Telegraph-Journal. Reynolds shook things up, even printing a series of dramatic front-page stories about the contents of KC’s last will – who'd passed away in 1992. The paper became more hard-hitting, although Reynolds was briefly fired in 1994. Reynolds eventually left in 1996 to work for Conrad Black as editor of the Ottawa Citizen (although he later returned to work for BNI).

The Reynolds era was one of the few periods when the Irving papers showed some enterprise reporting. Which was rekindled for awhile in 2004 when Jamie Irving became publisher of the Telegraph-Journal.

One person he hired was Mark Tunney, a former newspaper and CBC reporter, to be the paper’s editor-in-chief. “Jamie seemed quite good and open for at least the first year I was there,” recalls Tunney. “I was able to argue with him… and explain like this looks worse if you do this and we have to be a newspaper and if we need to be authoritative we need to do this and he seemed pretty open to it for that first year or so. And then things just changed. It was ‘No this is what we are doing’… There was a point where it became clear that he was exercising an Irving agenda.”

For instance, in 2005, a 90 per cent tax concession was awarded to Irving Oil by the province and Saint John over the building of a liquefied natural gas terminal. “At that time we did write an editorial saying it was a bad deal for the city, and Jamie did sign off on it,” recalls Tunney. “You would never see that now.” Tunney remembers Jamie confided to him that he felt the then mayor of Saint John, who'd agreed to the tax concession with Irving Oil, had been “snookered” by the company when he was told the concession was necessary or the terminal would not be built.

Today, however, the Telegraph-Journal is singing a different tune. During the past year, when the tax concession reemerged as an issue, the paper has run a string of editorials opposing the city’s efforts to tear it up.

In fact, Tunney recalls Jamie saying to him that “What's wrong with boosterism” and “We need to be more boosterish about Saint John and the industry here if we are ever going to grow. There was a real tone change.” Tunney was dismissed in 2006 and now teaches journalism at St. Thomas University in Fredericton. BNI refused to respond to a question about whether Jamie felt the papers should be more supportive of industry in Saint John.

David Shipley also left the Telegraph-Journal in 2008, disenchanted by some of his experiences. He'd joined the staff three years earlier, working out of its Moncton bureau as a business reporter. Shipley says reporters were never explicitly told not to write about the Irvings and their business interests. "But it was always a back-of-your-own-head type issue," he remarks. "'If I screw this story up what is this going to mean for me given we all know who owns the papers'. It’s an element of self-censorship, which is not always necessarily their fault... They don’t own the newspapers for the sake of running a positive press. They are way smarter business people than that."

In 2008, a dispute erupted in Saint John over plans by Irving Oil to build a new head office on the city's waterfront. Abel LeBlanc, a former leader of the longshoremen's union and then a Liberal MLA, was opposed to the plan on the grounds it would cost jobs for dock workers. That summer, the Telegraph-Journal published a front-page profile of LeBlanc that portrayed the politician as an out-of-control thug.

What got Shipley's attention was an anecdote in the story which said Leblanc "threatened to punch Mike Murphy in the face, furious with the health minister's response to LeBlanc's demands to have a Saint John woman, ill with cancer and awaiting a PET scan, fast-tracked past every other sick person in the province on the waiting list." However, this sentence was not true, and had been inserted into the story by the paper's editor. And one reason Shipley knew it was not true was because his mother was the cancer patient in question.

Shipley says what happened is that PET scans in New Brunswick were so poorly funded that patients such as his mother, who had lung cancer, were not getting diagnosed in a timely fashion. Hence there was a backlog of people waiting to be scanned. The Shipley family asked LeBlanc, their MLA, to intervene. LeBlanc lobbied the cabinet of Liberal government Shawn Graham to spend more money on the scans — and was successful. But Shipley says his mother did not jump the line and Abel had not acted inappropriately with the Graham cabinet.

"The point being was that (LeBlanc) advocated passionately for his constituents and made a difference," says Shipley. "(But) the story was manipulated by the editor at the time to make him look like a workplace thug and a bully looking for favors for friends, which was a total perversion of the truth. And of course it was edited without the reporter’s knowledge or consent... And when I saw the story, it was the worst kick to the gut I had ever felt as a journalist because it hit me so personally and I knew it it was so untrue." Shipley felt the story was edited in this manner due to LeBlanc's opposition to Irving Oil's head office proposal.

More recently, BNI seems to be making efforts to improve their newspapers, having hired a new editor at the Telegraph-Journal, Gregory Boyd, a former veteran mid-level editor at the Globe and Mail, who’s rejuvenated the paper. In 2013, they appointed an Ombudsperson who, according to BNI, “acts independently from management.”

Shipley, who now works for the University of New Brunswick, says that "there are still good reporters at BNI breaking important news and telling information people need to know — and that’s always important to remember in all of this. The papers have had problems but they’ve also done good. And as I say that as someone deeply hurt by something that happened. But looking back, it was not all good and not all bad."

The Times & Transcript scandal

Nevertheless, issues of quality and ethics dog the Irving papers. Last year, both the managing and assistant managing editors of Moncton’s Times & Transcript, Al Hogan and Murray Guy, were forced out, and the then editor-in-chief of the Telegraph-Journal, John Wishart, demoted.

The cause was because of Guy’s behavior and BNI's curious response. On at least one occasion (and possibly three) Guy traveled to Larry’s Gulch, a secluded provincial government-owned fishing lodge in New Brunswick. Larry's Gulch is notorious for where high-ranking politicians and business people socialize and strike deals. On two occasions Guy was listed as a guest of the head of the province’s liquor company, and once as a guest of the province’s environment minister.

Ironically, during 2012 and 2013, the Irving papers had campaigned for the province to release the lodge’s visitors’ logs. But in 2013, a reporter with the Telegraph-Journal, Shawn Berry, obtained a copy of the Larry's Gulch visitor’s list for that year and saw Guy’s name on it, and promptly told his boss, Wishart. That’s when Wishart tried to find out if Guy had visited the lodge, noting in an email that “attending such a trip would have been ethically problematic.” After all, Guy had not been assigned to travel to the lodge for work purposes nor received permission from his superiors to go.

When confronted, however, Guy claimed he’d never traveled to the lodge.

Eventually, however, Berry confirmed Guy had indeed gone. This information was passed from Wishart on to Jamie Irving. Wishart and Irving then discussed whether to write a story and mete out discipline. Wishart decided not to publish a story and Guy was never disciplined.

And there the matter died until last year when Canadaland, a website that covers the media industry, published an exposé about what happened. Guy and Hogan were immediately dumped, and Wishart removed as editor-in-chief of the Telegraph-Journal and demoted to editor of its editorial pages. BNI’s editor-in-chief, Patrick Brethour, embarked on an internal investigation, and discovered even more shocking information: that together Hogan and Guy had successfully lobbied an official within the former David Alward provincial government to alter government records to hide evidence of Guy’s visits to Larry’s Gulch. In fact, because of Guy’s intervention, not only was the reference to his visit to Larry’s Gulch in the summer of 2013 deleted entirely, so was everyone else who was there with him on the fishing trip – including, in fact, Premier David Alward himself.

An investigation by the province’s access to information commissioner into the scandal last year concluded the government official who acted on Guy’s behalf had broken the law.

And then there was the paywall controversy in Moncton.

The Irving dailies have one of the strictest paywalls in Canada, offering no free articles to readers. But this blew up in BNI’s face in the summer of 2014 when Justin Bourque, a Moncton resident, embarked on a rampage, shooting five RCMP officers, killing three of them, and triggering a manhunt, resulting in the city being locked down.

Yet, due to the paywall on the Times & Transcript, local residents couldn’t read on the website any police updates on Bourque’s whereabouts or other developments without buying a subscription to the paper. Readers took to social media to condemn the paper.

“They got a lot of flack over that,” says Steuter. “Basically in the Tim Hortons test, the Tim Hortons people thought that was bad dealings.”

However, BNI defends their use of a paywall, citing the difficult economic straits of the newspaper industry. Graham, in a column, argued the paywall in the Bourque case was warranted in this context, and added that: "In management's view, (the Bourque matter) was not a case of catastrophic necessity; public safety issues were being adequately handled via social media through Brunswick News journalists as well as the RCMP and other media."

In 2014, Jan Wong, a former award-winning Globe and Mail foreign correspondent and author who teaches journalism at St. Thomas University in Fredericton, wrote a column for Halifax’s daily paper, the Chronicle Herald, accusing the Irving newspapers of avoiding the province’s biggest economic and political stories, namely the “Shakespearean saga” of the splintering of the Irving dynasty. Instead, she wrote, they publish “dreck” – such as a front-page story in the Daily Gleaner about a woman who claimed the Virgin Mary has appeared in her dirty living-room window. “Newspaper monopolies are bad news,” wrote Wong. “They produce bad news, too.”

BNI, on the other hand, disagrees, saying in a statement that "the quality of the newsrooms’ work is recognized within the industry" as evidenced by the recent awards and nominations it has received, including the fact that their "journalists have won a dozen National Newspaper Awards, a significant achievement for small newsrooms, and, since 2006, been nominated for more than 75 Atlantic Journalism Awards."

Going to bat for Irving Inc.

In the end, though, critics of the Irving papers point out about how often they go to bat for the family’s business interests.

In 2009, New Brunswick’s Liberal government announced it was selling a majority of NB Power, the province’s public utility, to Hydro Québec. The deal would mean power rates for industrial users would fall by 30 per cent, electricity rates for residential and small businesses be frozen, and NB Power’s nearly $5-billion debt paid off.

The Telegraph-Journal editorialized that it was “The Deal of the Century” and strongly called for it to be approved – failing to mention that the Irving companies would benefit the most as the largest industrial group in the province and biggest private consumer of power. “Basically it was called a no-brainer in the Irving press because they were going to get a really good deal for power rates for their industrial sector,” says Steuter. “But that was not the feeling for the rest of the province who were really concerned about losing local control of the power system.” One poll showed 60 per cent of New Brunswickers opposed the sale; indeed there were protests at the New Brunswick legislature in Fredericton, and the sale was eventually scrapped due to its unpopularity.

In 2013, the Alward government embarked on a plan to explore the province’s shale gas resources, to be accessed using the controversial method of hydraulic fracking. The following year, opposition to fracking was a key reason the Alward government lost in the general election.

Yet the Irving papers editorialized in favour of shale gas development – without mentioning how it could benefit the interests of Irving Oil and other Irving companies. And more recently, the newspapers have been wholeheartedly behind the proposed Energy East pipeline that’s designed to bring oil from the tar sands to the Irving Oil’s refinery in Saint John. “Certainly, New Brunswick should be having full scale debate about the pipeline,” says Steuter, “and that's not happening and the papers are very self-serving in saying it’s a no-brainer, it’s a good deal for New Brunswick… So we are losing out on a chance for well-informed debate.”

BNI disputes this, noting in a statement that "Since the formal proposal of the pipeline in April, 2013, they have published news stories representing the many points of view. In addition, the opinion pages have hosted 220 items of comment – 115 pro pipeline, and 105 anti pipeline."

Nevertheless, critics worry that the New Brunswickers are being poorly served by the Irving-owned media. “You will see in other industries if you have such a clear conflict of interest, you will see a disclaimer where there is an acknowledgement that the group owns the newspapers and therefore have a dog in this race,” says Toby Couture, a former energy analyst with the Conservation Council of New Brunswick who wrote an academic paper about the Irvings’ media monopoly in 2013 as part of his studies at the London School of Economics and Political Science. “I can’t think of an example where that disclaimer has been included at the end of either editorials or any public ads (the Irvings) have taken.”

Next in the series: The Irvings' Invasion of Maine