Support strong Canadian climate journalism for 2025
About five years after being slapped with one of the largest fines for environmental pollution in Canadian history, Irving Pulp and Paper has received a federal loan for up to $100 million to help clean up waste effluent from the mill.
In 2018, the company was ordered to pay a $3.5-million fine for illegal dumping at its New Brunswick mill on the Saint John River and promised to build a treatment facility for waste produced during pulp and paper production. Five years later, the promise still has not been met and in December, Export and Development Canada (EDC) advanced its billionaire owners a loan to help build the waste treatment facility, Canada’s National Observer has learned.
Irving Pulp and Paper is part of J.D. Irving Limited, a conglomerate that falls under the Irving Group of Companies umbrella, owned by James Irving, who has a net worth of around $4 billion, according to Forbes. Meanwhile, his brother Arthur Irving runs Irving Oil and is 436th on Bloomberg’s Billionaires Index at a net worth of over US$5 billion: almost 80,000 times the median household income in the United States.
The Irvings are by far New Brunswick’s most wealthy and powerful corporate family: Irving-owned stores sit at key corners in many towns and cities, and in Saint John, the company operates Canada’s largest oil refinery, a stone's throw away from the pulp mill.
Irving Pulp and Paper was found guilty in 2016 of illegal dumping of untreated effluent at the mill, which sits on the Saint John River near where it empties into the Bay of Fundy. Effluent is a “complex combination of waste” created during the production of pulp and paper, according to the federal government. As of now, waste from the pulp mill is cleaned on-site and the treated wastewater flows into the river, much like the sewage process.
However, when the company was charged with three Fisheries Act violations (reduced from 15), it was pouring improperly treated effluent into the riverway, which is home to dozens of species at risk, including Atlantic salmon.
During the trial, the company failed a mandatory pollution test, which analyzed the toxicity of its effluent on rainbow trout. The company attempted to challenge the constitutionality of the test but ultimately pleaded guilty, and along with the fines, committed to invest in an environmental treatment facility for its byproducts within five years. According to the company, its current system meets the present regulations for effluent, set in the 1990s, but once the regulations are updated, the old system will be insufficient. Irving also says the new facility will reduce its freshwater consumption by over half, which is currently double all of Saint John’s water use combined.
News of the loan is raising eyebrows among environmentalists, who question why the Irvings would need government help to finance the plant. Over the years, the Irvings have consistently ranked as one of the richest families in Canada while finding ways to cut costs. The CBC reported the company created an offshore insurance company in the tax haven of Bermuda that allowed it to accumulate over $13 million in untaxed income between 1973 and 2001. The Paradise Paper leak in 2022 showed Irving Oil made $250.7 million in 2005, the same year it persuaded Saint John city council to give the company a tax break for 25 years. The documents also showed over $100 million in profits during the 2008 financial crisis, when the price of oil crashed.
“We know they're wealthy, we know their companies make a profit,” said Matt Abbott of the Conservation Council of New Brunswick. “First of all, why don't they just have the best pollution treatment system in the first place? And then when they're caught without it, why don't they just build it as quickly as possible?” he said.
EDC and Irving would not provide details on the loan, such as an interest rate or the date when it needs to be paid back. Anne McInerney, vice-president of communications for Irving, said the loan was “syndicated” with the five big banks, and that the total amount was larger than EDC’s contribution.
Pollution charges
The series of events that led to the pollution trial and the followup actions by Irving also rub Abbott the wrong way.
The company self-reported the dumpings, which occurred between 2014 and 2016. Of its $3.5-million fine, $1.1 million was directed to the Canadian Rivers Institute, a research organization run out of the University of New Brunswick, and $2.4 million was put towards Environment and Climate Change Canada’s Environmental Damages Fund.
During the plea process, a joint proposition from the Crown and Irving argued that $1.1 million of the fine should go to a salmon conservation non-profit created by Jim Irving called Collaboration for Atlantic Salmon Tomorrow. The group’s salmon-stocking plan has been contentious: it was repeatedly rejected by the Department of Fisheries and Oceans and criticized by local First Nations. The idea was eventually abandoned, but Abbott said suggesting that a supposedly punitive fine should be shovelled back to a non-profit they back "speaks to Irvings' character."
Canada’s National Observer reached out to ECCC to request an interview, which the department could not provide. It said Irving Pulp and Paper provided the ministry with a plan to prevent future deposits of deleterious substances into the Saint John River. The company is also required to provide updates to the department twice a year on their efforts to prevent future pollution, “including until a new effluent treatment plant is commissioned.” The ECCC notes the company has been complying with the direction.
Irving Pulp and Paper did not respond to questions on criticism of the funding and pointed to a press release on the environmental treatment facility.
“The construction of this new on-site facility using world-class technology will help us continue to achieve our long-term environmental objectives by substantially improving water quality while reducing water consumption by up to 50 per cent,” said vice-president Mark Mosher in the release.
“We have been operating at the westside location since 1946, so we value the feedback of our neighbours in the community and we look forward to hearing from them through this process.”
For Abbott, the memory of the pollution events is still clear and the violation people felt when hearing the company had dumped untreated waste into the river for years is still raw. He said people called the Conservation Council of New Brunswick’s office when they heard the news, and asked if they were safe after diving or boating on the river.
“Because there is commercial, industrial, scientific diving. All sorts of things,” he explained.
“We think of Saint John Harbor as an industrial harbour, but people are in it and on it for a whole host of reasons. And even if you're on a tug, you know, moving Irving oil tankers, you should still not be exposed to pollution.”
This article has been updated to include the correct figure for the median household income in the United States.
Comments
Stories such as this one reminds me that many wealthy business people simply live their lives without much regard to their fellow Canadians or the shared environment. Their ability to ignore or profess ignorance of certain regulations and legislations galling but is second only in comparison to their ability to have their hands out ready for additional corporate welfare. It makes this Canadian wonder if we a actually have a free market or is it mostly a tax-payer subsidized market economy where all profits are collected by the corporation but risks and losses or investment costs are supported by the taxpayer with the proffered rationale (blackmail) of having saved local jobs. Corporate welfare seems too common in Canada and I wonder how these subsidies don’t offend our fair trade agreements.
There is also the concern that in this type of market that a Canadian competitor who follows all laws and regs is disadvantaged by these loans and handouts. Can a corporation request an operating grant due to undue hardship created by govt support of their competitor?
I wonder if all govt corporate support should be either by secured, market rate loans or if “required”, that what we used to call grants, (free money) are treated as actual investments with taxpayer ownership in corporate stock.
Perhaps if this model had been in play then we may not be lending money to the Irving’s or doling out billion dollar grants to Oil and Gas corporations to clean up the thousands of orphaned wells out west.
Canadian natural resources are always in high demand; it’s tragic that too many who wish to explore and export these resources don’t value the land, water, air or people next to these resources and more tragic that we enable this behaviour.
1. What's happening is what "free market" means.
2. Why would the Canadian government (i.e., its citizens) want to take on an ownership interest in a crooked, dirty, polluting industry that lies and asks poor people to pay its bills for it?
3. You might want to think twice about compensating foreign owners for "loss of competitiveness" ...
4. The biggest problem, to me, is not even the ongoing and ridiculous corporate welfare, but that it all comes with zero strings attached. If there were real need by the recipient company, it *could* be doled out to meet expenses already incurred rather than as a Big Gift Up Front.
5. Government loan support is usually by way of guaranteeing low-interest loans advanced by Canadian chartered banks. No one's attending to the "shareholders' demands for better profits" in that case, which gives the lie to their stated approach. On the other hand, "the government" (meaning the country's citizenry) at least sort of pays lip service to keeping the interest rates low.
6. None of the propositions by M.L. in the name of a "free market" are "free market" provisions, in the way a lot of people understand them. They are, however, consistent with how "free markets" actually work, in terms of everything being free to the "producer" (unless mega-purchase/distribution/brokerage is involved, as in agricultural products).
7. Don't forget that these companies are also often given tax holidays by any or all levels of government.
"Free" means *free*!
Finally, "Abbott said suggesting that a supposedly punitive fine should be shovelled back to a non-profit they back 'speaks to Irvings' character'."
I would suggest it speaks much more loudly to the "character" of the prosecutor's office that they'd propose it in a joint submission. We have elected politicians, civil servants and officials by the thousands who bend over backwards to break the law for the wealthy ... again, think Jody Wilson-Raybould.
I, for one, hoped (against hope) that a few examples like hers, of integrity in government, might embolden others to do their job as it would in fact be done in a country that paid more than lip service to "rule of law."
But "rule of law" applies to "the little guys," not to the wealthy, the ruling class, or their government henchmen.
Good comment, and an example of why the NDP distrust the Liberals with their undeniable corporate affinity but when you realize the number of jobs at stake, especially when the Irvings own the largest oil refinery in Canada nearby as well, along with other "stores on every corner," that's a powerful lever to lobby with. And then there's that part of the system. The amount done by big oil is truly shocking and sounds like pure harassment but these guys seem entirely confident in their weighty, proxy power.
I saw the announcement by AstraZeneca a couple of days ago to build a pharmaceutical research facility in Mississauga, apparently their own investment, but wonder what led to that, including the involvement of Health Minister Duclos who was recently seen as stalling and delaying the move to reduce pharmaceutical prices. I don't know, but the proximity of these two things struck me, and the perception that this is a big part of how government works when corporations have naturally become so powerful over time. It can be seen as starting with the banks, who were bailed out in the 2008 financial crisis despite how bad that looked, because the whole capitalist system was at stake. That decision made at the highest levels no doubt contributed to Americans' current public distrust but that's where there's also some truth in the "trickle down theory," and although most people are working mainly to join the middle class, only a minority can aspire to the stratosphere that is the moneyed class. Meanwhile, even parsing the lives of the rich and famous is lucrative so politics taps into many of the contradictions in people, in this case the one between envy and resentment and adulation.
I suspect that if the NDP gained power at that level they'd be sucked into the same systemic vortex (note Horgan's Site C dam and old growth issues, so entirely counterintuitive on the surface, but clearly more complicated.) I'm recalling how Tom Mulcair came so close but in trying to attract conservative elements, he veered away from the spending required for social programs to "balancing the budget," tempered by the political reality that just confirmed what most people outside of politics see, that the NDP are more like the Liberals than they want to admit, and that conservatives are the dangerous outliers. So the current confidence and supply agreement is probably as good as it gets for all of us.
My knowledge of economic history is thin to the point of transparency and rests on a single undergraduate course. Also occasional readings in the Economist magazine. Nevertheless, I will venture to guess that there has NEVER been something one could call a free market. Capitalism rests on the model of sharing risk with others and incorporation runs on the premise that incorporation preserves individuals from personal liability when "corporations" misbehave. No wonder one commentator called corporations psychopaths.
Early capitalism depended on financing from monarchs and wealthy merchants. Monarchs and oligarchs have always been deeply invested in "venture" enterprise. Venture capital is running out of steam as the vulture capitalists like hedge funds, hoover up every promising underfunded, under-priced property or idea. Hedge fund is just a genteel way to re-label asset strippers. Hedge funds belong in the marvel comic world. Irving is just a sprawling two headed monopolistic psychopath. We need more horror comics devoted to multi-headed oligarchs with delusions of grandeur and habits of defrauding taxpayers.
Corporations can't be psychopaths, but their C.E.O.'s can.....
https://www.forbes.com/sites/jackmccullough/2019/12/09/the-psychopathic…
In the sense that they're not really people, sure, corporations can't be psychopaths. But in the sense that psychopathy is characterized by a lack of empathy or ethics, and by complete selfishness, corporations have to be psychopaths; as institutions, they are defined as vehicles of complete selfishness, and they are incapable of empathy or ethics.
Irvings pulled their money out of Canada like all our patriotic billionaires, nation building, benefactors, leaving Canadians with the shaft after stealing the gold. Stephen Kimber wrote an article on this in the May/June 2016 Atlantic Business. Kenneth Colin Irving stashed $3 billion in Bermuda after disappearing from the province he was born in and where he made all his money. Now Canadians are helping this family help themselves to our tax money. Amazing that money can buy everything but integrity and honesty.
Harbour - Canadian English please.