Skip to main content

Karen Stentaford for Report on Business magazine

Company province, provincial company

The Irvings run New Brunswick like a hermit kingdom. But as the Energy East pipeline catapults the family onto the national stage, the timing is awkward. Now even the Irvings aren't talking to the Irvings

Gerry Lowe is touring the streets of Saint John, New Brunswick, behind the wheel of his black Ford Taurus sedan, maintaining a spirited dialogue. It's a bitterly cold January afternoon and the iron-grey skies are threatening flurries.

As a city councillor in a place blighted by both poverty and air pollution, Lowe knows all about the local power brokers and scandals. Names like McCain, Oland and Ganong—the banners of New Brunswick's singular cohort of family-business dynasties—are the stuff of daily conversation here. The dish du jour for locals is the recently concluded trial of Dennis Oland, who was found guilty of murdering his father, Richard Oland, by bludgeoning him in a bloody frenzy one night in July, 2011.

But Lowe is agitated about a wealthier clan, the biggest New Brunswick dynasty of all—the Irvings. After all, just about everything Lowe can see through his fogged windows belongs to the Irvings—whether it's Canada's largest oil refinery belching fire and steam night and day, the foul-smelling pulp and paper mill that sits smack in the heart of the city, the railway yards where train cars full of crude from Western Canada arrive, or the massive tank farm holding millions of barrels of oil. Indeed, the Irvings' red-and-blue signs are ubiquitous. Even the local daily newspaper, the Telegraph-Journal, is owned and run by the family. "[The Irvings] just do what they want," says Lowe at one juncture. "They're making a fortune off of us and putting it in other countries."

Story continues below advertisement

From left: the Telegraph-Journal; the Saint John pulp and paper mill.

From left: the Telegraph-Journal; a pulp and paper mill in Saint John.

Karen Stentaford/for Report on Business magazine

At 72, the pugilistic retired businessman is a rarity in this industrial port city of 70,000—one of the few locals willing to speak out against the pervasive power of the Irvings, Canada's fourth-richest family after the Thomsons, Westons and Rogers. And lately, Lowe's words have been even sharper: After all, the city government is struggling financially. "I would like to see [the Irvings] pay their fair share," he says, pointing out the city doesn't have money to replace retiring firefighters and police officers. In fact, the city is facing a $76-million pension shortfall.

Canada as a whole may soon know the Irvings as well as the citizens of their home city know them. The family will be thrust into the national limelight thanks to the proposed Energy East pipeline, which will cost $15.7 billion to build and be the largest pipeline in North America—carrying up to 1.1 million barrels a day from Alberta's oil sands some 4,600 kilometres to Saint John, where some of it will be refined in Irving Oil Ltd.'s refinery. The Irvings will also build a $300-million marine terminal so crude can be shipped abroad.

Energy East, proposed by TransCanada Corp., has been dubbed "Keystone on steroids"—it promises to transport one-third more barrels of oil per day than Keystone XL was supposed to. For the oil patch, Energy East represents one of the last hopes of gaining new markets for Canada's landlocked oil. The environmental politics it entails are significant enough to test Canadian federalism. But the stakes are high for the Irvings too. Fossil fuel is one of the two mainstays of their business; that sector, like forestry, has been whiplashed by dropping prices and demand.

While the pipeline might boost the Irvings' income stream, it's also drawing attention to the family's controversial methods and internal divisions. The Irving businesses—long organized in an old-fashioned conglomerate—are a kind of hermit kingdom where bad blood, lawsuits and troubling questions over succession are rife, but little is heard of them outside the company perimeter. Family members rarely speak to the media (none of the four senior figures approached would be interviewed for this article) and are notoriously secretive. As David Ganong, a friend of the family who belongs to the Ganong candy-making clan, says, "They're a very private company and so it's not easy to look inside and…understand their strategies that deeply."

By the same token, while Irving is big, no one outside the inner circle knows exactly how big. Privately held, Irving is off the radar of the analysts and dealmakers on Bay Street.

The empire is presided over by two of Canada's richest men, brothers James (J.K.) and Arthur. Both are octogenarians, and they don't get along with one another. As for the next generation, they've proven they can't get along either.

Happier times: K.C. Irving, his wife and sons attend the opening of the family's Saint John refinery in 1960. From left: Harriet, Arthur, K.C., James and John.

Happier times: K.C. Irving, his wife and sons attend the opening of the family’s Saint John refinery in 1960. From left: Harriet, Arthur, K.C., James and John.

Telegraph-Journal/CP

During his guided tour of Saint John, Gerry Lowe turns his car on to Mount Pleasant Avenue, and points to a cupola-topped mansion sitting on a ridge—the home of Arthur Irving, Canada's second-richest man, by one calculation, and ranked No. 271 in the world of billionaires, at $5.5 billion (U.S.). The house was also home to Arthur's father, Kenneth Colin (K.C.). In fact, across the street is a park where a stern-looking statue of K.C. stands facing the house. "There's K.C. watching him," chortles Lowe.

Story continues below advertisement

K.C. built the empire and developed its business philosophy. The son of a sawmill owner, he was born in Bouctouche in 1899. Imbued with Presbyterian utilitarianism, K.C. assembled a conglomerate that grew to dominate the East Coast and eventually reached into New England. "K.C. believed in vertical integration," explains Donald Savoie, a professor of public administration at the Université de Moncton and an Irving family friend. "If he sold cars, he felt why don't I sell gas so I can fuel the cars?" Indeed, K.C. sought to control the entire supply chain—from cutting down the tree to making the paper and publishing the newspaper it was printed on.

Today, the Irving group is made up of a host of privately held companies (at least 174 of them; possibly as many as 250), altogether worth more than $10 billion, by one estimate. These firms, some owned wholly and others in part, are in a huge range of businesses, albeit mostly connected to the cores of oil and forestry. To feed a refinery that produces up to 320,000 barrels a day, the Irvings import 100 million barrels of oil a year. They own more than 900 service stations, pulp and paper mills, shipyards, railway lines, and trucking, construction and shipping companies. They supply 60% of the gasoline in Boston, and are responsible for almost one-fifth of American gasoline imports. They own all three of the English-language daily newspapers in New Brunswick. They employ an estimated one in 12 of the province's workers (and thus a much higher ratio of purely private-sector employment), and account for more than half of the province's exports. The Irvings are also one of the five largest landowners in North America, owning, between Canada and the United States, 3.3 million acres and managing another 2.4 million acres of public land.

K.C. Irving in an undated portrait. Handout

K.C. ruled his empire with an iron fist, instilling the principles of clean living, hard work, attention to detail and loyalty. "It was like a family culture built on trust," says Blaine Higgs, who spent 33 years at Irving Oil, rising to become a senior executive, and later serving as finance minister in the Conservative Alward government that was defeated in 2014. "There would never be an [Irving] event…where people would not be recognized for building and growing and sustaining the company."

As his company grew in power, K.C. was able to bend provincial and municipal politicians to his will. "It's an industrial oligarchy in a way," says Bill Parenteau, a historian at the University of New Brunswick (UNB) in Fredericton. "And in some of their companies, especially in oil, they practise a kind of 19th-century capitalism."

If the Irving group is a throwback in some senses, its founder was ahead of his time when it came to taxes. K.C. was one of the first Canadians to take advantage of offshore tax havens, placing his companies in a trust in Bermuda, where he had moved by 1972, avoiding hundreds of millions in capital-gains taxes. By having his companies in the Bermudan trust, and through methods such as transfer pricing, he slashed his tax bill. "Bermuda is the North Korea of offshore centres when it comes to transparency," observes David Marchant, editor of Offshore Alert, a Miami-based website that calls itself "the unofficial financial regulator" of offshoring.

The move to Bermuda prompted a Canada Revenue Agency investigation that discovered that by setting up subsidiaries in Bermuda, Irving Oil was, in one instance, able to lower its tax bill by $142 million. The relevant Bermudan tax rate at the time was 0%.

Story continues below advertisement

While the offshore structure today is less clear, Statistics Canada lists nearly a dozen Bermuda-based Irving companies. "The Irvings know what to do in order to avoid the Canadian tax system," remarks Alain Deneault, author of Canada: A New Tax Haven.

This is evident in Saint John, whose oil-by-rail terminal was built by Irving Oil to import crude to its refinery in 2012. The CBC found that the terminal pays just $19,300 in annual property tax—about half the $37,000 paid by the Tim Hortons across the street.

From left: Bouctouche, where it all began for the Irvings; and the oil terminal in Saint John.

From left: Bouctouche, where it all began for the Irvings; and the oil terminal in Saint John.

Karen Stentaford/for Report on Business magazine

Gerry Lowe and other councillors are up in arms after discovering how Irving Oil pressured Saint John into a tax concession years ago. In 2004, Irving Oil began talks with Repsol, a Spanish energy company, to build a $1.2-billion liquefied natural gas (LNG) terminal. Repsol was looking for a place to offload gas so it could access the North American market. Irving agreed to lease a parcel of land to Repsol for the terminal, and took a 25% position in the venture.

Soon afterward, then-Irving Oil CEO Kenneth Irving informed Saint John's mayor that unless the company received a massive tax concession, the terminal would not be built. The concession meant the council would be forsaking a potential $200 million in revenue: Instead of paying $8 million a year in taxes for the next 25 years, Irving persuaded the mayor to accept $500,000. (Via a spokesperson, Kenneth Irving declined to comment on this episode.)

Not only did the city council quickly agree to the deal but the province itself passed a bill whose sole purpose was to green-light it.

Last year, new details emerged about how the Irvings profited from this arrangement. Due to a court case launched by Repsol against the Canada Revenue Agency, it was discovered that Irving Oil had signed a contract finalizing the deal with Repsol weeks before the New Brunswick legislature passed the tax concession. That deal guaranteed Irving Oil at least $20 million (U.S.) a year in profits from the LNG terminal—suggesting the Irvings didn't really need the tax concession at all.

Court documents also show that Repsol pays Irving Oil rent and a fixed 14% equity dividend, no matter how the enterprise fares. And it hasn't fared well. Indeed, for Repsol, the terminal turned into a $1.3-billion writedown after demand for imported natural gas collapsed in the U.S. While the terminal is still in operation, it's operating at far below capacity. Now the city council is waiting to see if the provincial government will grant the city's request to tear up the tax concession bill.

At one point during our drive, Lowe points to the Irving Oil refinery, with its plumes of smoke and steam rising into the cold winter sky. "That's the cracker," he explains. "The refinery, which is…one of the top 10 in North America and produces 300,000 barrels of oil a day, pays $5 million in taxes to the city and province. Out in Alberta, refineries that together produce 300,000 barrels a day pay $15 million to $16 million a year."

In fact, while the Irvings became among the richest businesspeople in Canada, New Brunswickers as a group did not fare well compared to other Canadians. Today, New Brunswick's median income is the lowest among the provinces, and it also registers at the dire end of the spectrum in measures such as out-migration, growth and unemployment. Meanwhile, the provincial government is facing a $453-million deficit and is paying $685 million a year in debt-servicing costs. "[The Irvings] are doing their job making money, but they are designing the game board we are playing on and redefining the rules whenever it suits them, and then making us deal with the consequences," says Rob Moir, an economist at UNB in Saint John. "And I do believe that's contributed regionally to slower growth rates in our province." The argument goes that the Irvings have erected barriers to entry so high that competition and innovation are suppressed. "Is everything good for the Irvings good for us?" Moir asks. "I would argue unequivocally no." To the extent that the Irving companies are relieved of taxes, he argues, the province's infrastructure and education systems have suffered. That in turn hampers the province's ability to produce the educated workforce needed for a sophisticated economy. "But there's nobody there to force [the Irvings] to play fairly and that's the problem," he says.

While no one at the Irving companies would be interviewed about these and other issues, Irving Oil's director of public affairs, Andrew Carson, was one of two Irving officials who responded, mostly obliquely, to e-mailed questions. Asked to respond to criticisms of Irving tax strategy in Canada and offshore, Carson replied, "Irving Oil plays a foundational role in the local and regional economy. As a New Brunswick company, we pay all applicable taxes on all aspects of our business."

The Irving brothers, from left: John (Jack), now deceased; James (J.K.); and Arthur.

The Irving brothers, from left: John (Jack), now deceased; James (J.K.); and Arthur.

Scott Perry/The Canadian Press

K.C. drilled his methods into his three sons—J.K., Arthur and Jack, who were nicknamed "Gassy," "Oily" and "Greasy." J.K. managed the forestry and shipbuilding wing, J.D. Irving Ltd.; Arthur ran Irving Oil; and Jack the real estate and construction divisions. The brothers operated the companies in partnership, often sorting out issues informally. They also embraced their father's method of internal sourcing—if something you needed was available from another Irving company, that is where you bought it, regardless of price.

But after K.C. died in 1992, the ties among the brothers slowly began to unravel. And many blame their children, referred to as "the Cousins" in local argot, for exacerbating the split.

Like their father, the brothers groomed their children to succeed them. J.K.'s sons, Jim and Robert, were trained to run J.D. Irving, while Arthur mentored his sons, Kenneth and Arthur Jr., to manage Irving Oil; Jack groomed his son, John, to run the Irvings' construction and real estate wings. According to one family source, a committee of the Cousins was formed in the mid-1990s to see if they could operate the empire together. But competing egos got in the way. If they couldn't run it together, then "no one could run it," the source says.

The Cousins' fathers were drifting apart too. Business aside, J.K. and his brother Arthur had never been close. Jack, meanwhile, began siding with Arthur on decisions. "Jack adored Arthur," recalls one source close to the family. "Arthur was the outgoing flamboyant one and Jack was quite in awe of him."

By 2007, the brothers had begun formal divorce proceedings. Today, the largest family entities, Irving Oil and J.D. Irving, operate independently. "I don't think it's an empire any more—it's mainly two companies," says journalist Jacques Poitras, author of Irving vs. Irving, published in 2014. Yet the Irvings' sway seems no less strong.

Feuding was not limited to the brothers and their sons: Within Irving Oil, an era of inner turmoil got under way.

Arthur Irving in 2008. Behind him is his brother Jack Irving.

Arthur Irving in 2008. Behind him is his brother Jack.

Peter Power/The Globe and Mail

Arthur Irving is often described as the most mercurial of the three brothers. He's famous for working his sons hard at Irving Oil, and for forcing them to cut off relations with their mother following the couple's divorce in 1980. "Arthur Irving doesn't have a reputation as an easy man to work with," says Mark Tunney, a former editor of the Telegraph-Journal. "I'm not saying he's not a nice man.…But on the business side, he gets what he wants and he doesn't really let what people feel about him get in the way at all."

In 2000, Arthur's eldest son, Kenneth, was elevated to the post of CEO of Irving Oil. Kenneth is described as a talented businessman, sensitive and socially conscious. "Kenneth, who is an awesome man, was very sustainability-minded," says Sharon Murphy, a Saint John businesswoman. "He was looking at [having] big huge windmills built in the dry docks and bringing people back to work and serious awesome stuff."

In 2008, Arthur started moving into retirement. But he didn't stay away for long, and tensions with his son grew.

The watershed year was 2010. That summer, Jack Irving was dying. Relations were so poisoned that J.K. was not allowed to visit him in hospital. After Jack passed away, J.K. ranked so low among the crowd attending Jack's last passages on a hot July day that he stood out in the sun for 90 minutes waiting to see his brother's body, and then sat several rows behind Jack's family during the funeral.

That same month, Kenneth was suddenly no longer CEO of Irving Oil. One source says Arthur fired Kenneth out of the blue. Via his spokesperson, Kenneth said the stress of running the company was affecting his health; after taking a leave of absence, he decided not to return. Another source says Kenneth had a breakdown after discovering his father planned to split his fortune equally among his five children: Kenneth felt he deserved a greater share due to his stewardship of Irving Oil. At one point, Kenneth checked into the Lahey Hospital & Medical Center in Boston for a mental health respite.

Some observers believe the rift was rooted in differing visions of Irving Oil's future. "[Kenneth] had this plan for tidal and green energy," says Poitras. "He was thinking of it as an energy company. He was thinking about the U.S. regulations on climate change and fuel efficiency and he was trying to get ahead of the curve on that.…But you get the sense that his father's focus was run the oil company and sell gas and so on."

Their relationship shattered, father and son ended up in court. Kenneth challenged the terms of the family trust. But in a 2012 case heard in Bermuda, his father won an injunction that stopped his son from forcing disclosure of the trust's assets.

The judgment details Kenneth's turmoil in exile. During his testimony, Kenneth was "overcome emotionally," the judgment says. He even offered to drop the case if Irving Oil held a retirement dinner for him and if he could attend a family event with his father. "I want to be recognized by my siblings that I did good," he said. But Kenneth's hopes for reconciliation were dashed.

Arthur's problems with his children did not end with Kenneth. Arthur's other son, Arthur Jr., was ousted from Irving Oil last year. In fact, sources say Arthur no longer has relations with three of his four children from his first marriage.

To replace Kenneth, Arthur promoted Mike Ashar. Ashar had been a long-time executive at oil sands producer Suncor before being lured away in 2008 to become Irving Oil's COO. But Ashar's time at Irving would not end well either.

Mike Ashar, former president of Irving Oil.

Mike Ashar, former president of Irving Oil.

David Smith for The Globe and Mail

In a lawsuit he launched last year, Ashar claims that he was wooed away from Suncor with promises of incentive compensation based on increasing the equity value of Irving Oil. Ashar said he spearheaded the drive to get Energy East off the runway, and dramatically increased the "volume of crude oil shipped by rail [to the Saint John refinery] from all over North America," representing both savings and a more secure supply.

But in 2012 and early 2013, Ashar says in a statement of claim, "there were many instances of misconduct and inappropriate behaviour involving members of the Irving family that created an intolerable and poisoned work environment." In 2013, according to court documents, he was constructively dismissed—that is, forced out because his employer radically changed his job. Originally it was agreed he would stay on the payroll until the end of the year. But this arrangement apparently fell apart when the company tried to force Ashar to sign an agreement that diminished his rewards for increasing the value of the company. Ashar was sent $4.8 million in severance after the company claimed Irving Oil's equity value actually declined during his tenure. He believes he is owed $50 million for breach of contract because, he argues, the opposite is true.

Irving Oil has aggressively fought back. Even before Ashar launched his lawsuit, the company went to court in Alberta and won an injunction against Ashar to prevent him from breaking his confidentiality agreement. After Ashar initiated his lawsuit, Irving Oil returned to court and won a judgment against him on the grounds his claim breached the injunction. But that decision was reversed in January by Alberta's court of appeal.

Ashar's replacement as Irving Oil's top executive didn't last long either. Paul Browning, formerly of GE, left in the summer of 2014 after less than 18 months on the job. Then, last summer, Ian Whitcomb, an accountant and former partner at Deloitte LLP, was named to the top job. "[Arthur's] got his accountant, for God's sake, as president," remarks one source derisively.

Today, the only other Irving in a senior leadership position at Irving Oil besides Arthur (who is chairman) appears to be Sarah Irving, his one child from his second marriage. Last year, she was elevated to the post of executive vice-president and chief brand officer. However, Sarah is only in her 20s. "She's being mentored daily and she's active in the business daily," says David Hawkins, a Moncton marketing entrepreneur who knows the Irvings. "She is quite young but they can surround her with the best talent in the world—and they do."

More than fossil fuels & forests

The Irvings may have made their fortune by chopping down trees and refining oil, but their empire extends through a huge array of related businesses as well—and also into some sectors that seem not related at all.

The most notable national presence among these endeavours is in shipbuilding, where the Irvings are one of three big players, along with Seaspan in Vancouver and Davie in Quebec City. In 2012, J.D. Irving landed a $26-billion deal to build replacements for up to 15 Canadian navy warships at its shipyard in Halifax.

Shipbuilding aside, a survey of the empire shows how the Irvings have followed K.C. Irving’s prime directive: Integrate vertically. Forestry provides the raw material for products like diapers, paper towels and toilet paper (the Royale brand, for one); for lumber retailing (Kent Building Supplies); and for a spate of construction companies, which in turn connect to businesses like drywall (Irving Wallboard) and trailer rental (Kent Mobile Shelters).

But the Irvings also own more peculiar things, like the Moncton Wildcats, who play in the Quebec Major Junior Hockey League. Then there’s Juniper Farms (peat), Cavendish Farms (frozen fries), and firms specializing in security and towing.

Controversially, the Irvings own all of New Brunswick’s daily newspapers, as well as 18 of the province’s 25 French and English community newspaper titles. They also own four radio stations. A 2006 Senate report called these holdings an “industrial-media complex.”

The newspapers shy away from covering internal divisions or leadership issues within the Irving family and companies. “The problem with the Irvings owning the papers is that none of that ever comes out,” says Ken Langdon, a former publisher of one of their weekly papers. “You never know what actually took place or why things are really happening.”

Despite the turmoil in its executive ranks, Irving Oil played a key role in getting the Energy East pipeline to centre stage in Canadian business and politics.

For Alberta's oil patch, it is argued, pipelines to tidewater are critical to reaching world markets. The push was initially westward—to the Pacific via Northern Gateway and Trans Mountain pipelines; or southward—to the Gulf of Mexico via Keystone XL.

However, all of these pipelines were destined to be mired in political quicksand. As that became clear, TransCanada began pushing for a pipeline that would travel to the East Coast—and specifically Saint John. "Energy East was conceived as a desperate Hail Mary when it began to become clear that Keystone XL was not going through," says Adam Scott of Environmental Defence, a Toronto-based environmental organization.

The plan, apart from its global reach, would finally bring Western Canadian oil to the Maritimes. Yet the idea was met with skepticism from producers like Canadian Natural Resources Ltd., which were reluctant to commit the oil that would make the pipeline worth building—especially when Irving Oil wouldn't commit to how much it would refine. According to a source close to negotiations, producers suspected Arthur wanted monopoly control over the pipeline's spout. Thus they insisted that other marine terminals and refineries be on the route.

From left: Bouctouche's K.C. Irving monument and an Irving trucking company in Moncton.

From left: Bouctouche’s K.C. Irving monument and an Irving trucking company in Moncton.

Karen Stentaford for Report on Business magazine

By 2013, by some accounts, the project looked dead until Arthur and his executives revived it, in part by committing to refine 50,000 barrels a day. According to media reports, they approached former New Brunswick premier Frank McKenna, who got everyone back in the tent. "The support from New Brunswick and the Irvings was helpful in a political context," says former Alberta energy minister Ken Hughes. As the plan stands, Energy East will connect to three refineries—Irving's in Saint John and two in Quebec, one owned by Texas giant Valero, the other by Suncor.

For the Irvings, Energy East holds out the possibility of turning Saint John into a global energy hub. "The bigger opportunity is the potential for other investments here in Saint John to refine that oil," notes former Irving Oil executive Blaine Higgs. In fact, the province has already handed over 500 acres of submerged Crown land adjacent to the proposed terminal site to Irving Oil.

The project faces stiff opposition, with environmentalists worried about potential spills and increased pollution affecting both people in Saint John and wildlife such as whales in the Bay of Fundy. More broadly, each pipeline today becomes a test case of climate-change politics. More than 1,900 groups and individuals already have asked for intervenor status at the National Energy Board hearings concerning the pipeline. "You could push this project through in terms of approval [but] are you going to be able to jump over the huge hurdles of opposition in Ontario, Quebec, Manitoba and rising opposition in New Brunswick?" asks Mark D'Arcy, a Council of Canadians campaigner based in Fredericton. "It just seems that [the Irvings] are immune to these obstacles and they're not paying attention."

An Irving Oil truck drives past the company's refinery in Saint John in 2014.

An Irving Oil truck drives past the company’s refinery in Saint John in 2014.

Aaron McKenzie Fraser/Bloomberg

In July 6, 2013, a train that included 72 cars laden with crude oil from North Dakota derailed in Lac-Mégantic, Quebec, and blew up, killing 47 people. The oil was heading to the Irving Oil refinery in Saint John. An investigation by the Transportation Safety Board soon discovered the oil was labelled on shipping documents as being far less dangerous than it actually was.

But what did Irving Oil know? After the explosion, Transport Canada searched Irving Oil's offices, seizing records. The company, meanwhile, was among 25 firms that contributed to a compensation fund, quickly paying out $75 million. But one class-action lawsuit suggested Irving Oil must have known about the volatility and mislabelling. Irving Oil's Andrew Carson, asked about this allegation, wrote in an e-mail that "It is not appropriate for us to comment on this matter."

Even if the Irvings are blameless in the disaster, many recent events, including the internal feuding, suggest they may not be ready for national prime time. The company has logged a long history of environmental contamination, including 19 "environmental emergencies" at its refinery between 2012 and April, 2014, according to regulators. Carson put this in a different light, writing, "Irving Oil is required, and it is our practice, to report every single occurrence, no matter how small. Irving Oil is very proud of its record of environmental responsibility."

Be that as it may, the Irving companies tend to show a heavy hand with everything in the public sphere. Most requests for interviews for this article—to former premiers and other politicians, academics, businesspeople and family friends—were received warily, and then turned down. One economist at a New Brunswick university wrote in an e-mail, "I wouldn't want to be interviewed, quoted or referenced in regards to the Irvings. I would be too afraid."

New Brunswick academics studying forest practices know that both they and their deans are apt to receive letters from J.D. Irving demanding to know about their sources and methodology. This is viewed by these scholars as intimidation.

J.D. Irving's vice-president of communications, Mary Keith, doesn't see things in that light. "We operate to the highest level of integrity, basing our management decisions on the best available, peer-reviewed science," she wrote in an e-mail. "New Brunswick is fortunate to have many forest scientists who have realized international recognition for their research and we have improved our practices because of their work."

Nonetheless, apprehension about the Irvings' clout is deeply seated in the province. Last December, the province's highly regarded chief medical officer of health, Dr. Eilish Cleary, was suddenly fired without cause. Cleary was studying the health impacts of glyphosate, a herbicide used in the forest industry—including by J.D. Irving. Numerous comments on an ensuing CBC news story attributed the dismissal to Irving influence; J.D. Irving deemed this "an unsubstantiated conspiracy theory."

Irving gas stations, now numbering more than 900, manifested a commitment to vertical integration. Karen Stentaford for Report on Business magazine

It wasn't the first Irving-sensitive issue raised by Cleary. In 2012, she wrote a report on the risks of shale gas development, which the Irvings support. The then-Tory government initially considered burying it. Among the report's many recommendations was a call for health studies to be conducted in areas affected by fracking.

Speaking generally—not with reference to the Cleary case—David Coon, the sole Green member of the New Brunswick legislature, says the government wants to "muzzle or eliminate the expertise who might speak in opposition" to the Irvings. "The Irvings like to get their own way and they don't give up," he says.

This is particularly true in the forestry sector. Although 50% of New Brunswick's forested land is Crown lands—of which J.D. Irving leases 2.5 million acres—the province actually loses money on its forests, according to a 2010 CIBC World Markets report. Last year, the province's Auditor-General singled out financial management in a scathing report on the government's forestry practices.

David Alward's Tory government, elected in 2010, introduced a forest management strategy that many experts felt was a reasonable proposal. It rolled back some industry-friendly policies by reducing hardwood logging on Crown land and restoring conservation zones.

But then in 2014, Alward introduced a completely new strategy, one that increased the annual allowable softwood cut by 20% and reduced areas for habitat protection. Moreover, the plan guaranteed to companies like J.D. Irving rights to harvest a certain amount of wood per year for 25 years—as long as the companies committed to investing in their mills and equipment.

The sudden change was thought by Coon and others to have occurred due to pressure brought by J.D. Irving. Asked to comment, J.D. Irving's Keith did not reply directly, but pointed out that the company has kept investing in its New Brunswick forestry operations even while many other mills in the province have shut down. "Our roots are here and we are committed to staying."

Not all observers believe things are that simple. "I know some people in the Conservative Party well enough to know when Alward made his decision going ahead with [the new agreement] and announced it to the cabinet, some people in the cabinet got up and were so mad they stormed out," says Andrew Clark, former president of the New Brunswick Federation of Woodlot Owners. "The Irvings play hardball, and they play hardball with everybody."

Report an error Editorial code of conduct
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

If your comment doesn't appear immediately it has been sent to a member of our moderation team for review

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.