Maine’s future with Irving
Editor’s note: This is the final story in a three-part series investigating the Irving corporate presence in Maine and New Brunswick and its implications for the state’s future.
If the giant, ever-growing Irving corporations were to have a larger presence in Maine, what effects might there be on Mainers’ daily life?
Compared to most Maine companies, Irving enterprises possess advantages of scale, deep reserves of wealth and hefty Canadian-government assistance. As family enterprises, they don’t have to be focused on quarterly profits or publicly reveal financial information. Such advantages endow them with great market power.
And “they’re not afraid to use market power,” observed economist Rob Moir of the University of New Brunswick’s Saint John campus.
A company’s power in the marketplace becomes a problem for others when it approaches monopoly. Higher consumer prices and, on the other hand, underpricing to destroy a competitor, known as predatory pricing, are classic results.
In a case examined by the Canadian national press and media academics, in the late 2000s an upstart newspaper serving the Woodstock area was crushed when the local Irving newspaper lowered advertising and newsstand prices.
In Maine, Irving Oil has already been accused of monopolistic practices. In the 1990s, J&S Oil, a central-Maine retailer, sued Irving for predatory pricing. It lost on technical grounds even after Irving admitted, according to court documents, that it was selling gasoline below cost.
In 2011, Maine’s then-attorney general, William Schneider, a Republican, was more successful. Using antitrust laws, he reached a settlement with Irving that barred it from acquiring a Bangor oil terminal and a pipeline running from South Portland to Bangor. The company was limited to a 50-percent interest in a South Portland terminal.
Rather than slow down the Irving companies, government more often helps them. For 2014 the state’s Business Equipment Tax Reimbursement Program (BETR) gave J.D. Irving $359,000 in a rebate on local property taxes. Irving Oil got $171,000.
Parts 1 and 2 of this series showed how J.D. Irving was attempting to replicate in Maine its lobbying efforts in New Brunswick to obtain government favors — successfully in the case of its forestry, not yet successfully in the case of its desire to mine Bald Mountain.
State Ethics Commission reports show that J.D. Irving lobbyists also worked on “MMA Rail Issues” and the “Transportation/Rail Bond” in 2010 and 2011 when the state bought — for $20 million — an Aroostook railroad line owned by the now-defunct Montreal, Maine & Atlantic Railway. The state then leased it to Irving for $1 a year for 30 years.
The company has more intentions for Aroostook County. It’s currently seeking state Land Use Planning Commission approval for cottage and commercial development of a 51,000-acre portion of the Fish River chain of lakes.
Irving says much of this land will be preserved. But its development plan states that its brand of intensive wood-harvesting known as Outcome Based Forestry would continue.
In addition to lobbying, campaign contributions are a major way to gain political influence.
Irving Oil contributed $15,000 to fight the 2013 South Portland ballot measure that proposed to ban tar-sands oil from being pumped to the city through the pipeline from Montreal. The measure was defeated.
J.D. Irving contributed $125,000 to successfully help defeat the 1996 Maine referendum that would have banned forest clear-cuts, according to Jacques Poitras’s book, “Irving vs. Irving.” (Maine Ethics Commission records on the election no longer exist.)
A major element of the family’s influence in New Brunswick is its ownership of almost all the province’s newspapers: the three English-language dailies and 17 of 24 weeklies. This monopoly, a 2006 Canadian Senate report found, is “unique in developed countries.”
In 2008 a J.D. Irving team toured the Portland Press Herald offices as the company looked into buying the Portland, Augusta and Waterville daily-paper chain. Those papers combined have the biggest newspaper reach in the state. In the end, they were sold to others and since have been sold twice again.
If J.D. Irving bought Maine news media, one change might be assumed: Canadian media critics characterize its newspapers as weak in covering the most important economic and political story in New Brunswick – the Irvings.
In the Irving-media coverage of a 1990s’ lengthy strike at Irving Oil, “what was good for the company was invariably assumed to be good for New Brunswickers,” Mount Allison University sociologist Erin Steuter concluded in a 1999 article in the Canadian Journal of Communication.
Has the coverage changed since then? Steuter emailed: “To this day, Brunswick News does not have a record of investigative coverage of Irving companies’ own interests, especially in the areas of environmental harms or labor violations.”
Brunswick News, the family company overseeing the newspapers, is run by J.D. Irving chief Jim Irving’s son, James “Jamie” Irving.
Poitras, a Canadian Broadcasting Corporation correspondent in Fredericton, saw the Irving media issue as complicated: “Jim Irving’s admonition about not wanting journalists ‘raising hell'”—Poitras is quoting from his own book—”is, I think, a discouraging sign for journalists who would like to test the boundaries. On the other hand, many reporters there still do good work.”
While the Irving companies’ political and market muscle could be perceived as foreign and potentially monopolistic threats to Maine’s politics and economy, from another perspective the companies could be seen as contributing to the state’s well-being.
Like other wealthy families, the Irvings contribute to society through philanthropy. In the Maritimes they donate to universities and the Fredericton art museum. In Maine, J.D. Irving gave $1 million to endow the Irving Chair for Forest Ecosystem Management at the University of Maine’s forestry school.
Irving Oil provides “hundreds of direct and indirect jobs” in Maine, the company said in a statement. In a 2013 “economic impact” publication, J.D. Irving said it had 375 employees in Maine, plus 90 contractors and provided “indirect employment” to 1,616 people.
When in 2013 J.D. Irving announced a $30-million investment to build an Ashland sawmill, it said 60 full-time jobs would be created. Recently, though, the company declined to say how many workers are employed at this high-tech mill.
In its 2013 publication, the company said it paid 20 percent more than the average Maine wage, but it has a history of troubled relations with loggers. In 2004, they struck Irving for better pay and working conditions – the beginning of a five-year battle.
The woods workers lost against Irving economic and political clout. When the legislature acquiesced in 2009 to Irving’s demand that it repeal a 2004 law giving its logging contractors the right to collectively bargain, state Sen. Troy Jackson, an Allagash logger, said in a Senate speech, “I guess I’ll just sit down now and we’ll let the boss man have what he wants.”
Whose interests served?
“As far as we are concerned, Maine is our home,” Jim Irving was quoted as saying in the Bangor Daily News last year. His company touts the jobs it provides here.
But Madison Paper Industries earlier this year said it had to lay off workers because of competition in producing magazine-type paper from several Canadian mills, including J.D. Irving’s Saint John mill.
Madison cited what it claimed were, under international trade agreements, unfair Canadian-government subsidies to the Canadian mills. In August, the U.S. Commerce Department agreed with the Madison mill and slapped import duties on paper from the Canadian mills. Irving is challenging the decision.
Protesting to the White House on behalf of Irving was Gov. Paul LePage, who said he was doing so in part to protect Mainers employed by Irving.
Whose interests would be served by the “Atlantica” economic-integration idea that Irving Oil and other big New Brunswick businesses have long promoted? This free-trade and development zone would encompass Atlantic Canada and the northeastern United States.
Nine years ago anti-globalization activists organized street protests against Atlantica conferences in Saint John and Halifax, Nova Scotia. They saw Atlantica leading to a region-wide suppression of environmental and labor laws.
An organization in Saint John, the Atlantica Centre for Energy, already works for regional energy-issue cooperation. It bills itself as a nonpolitical research institute, but Irving Oil, J.D. Irving and Irving Oil partners Canaport LNG and TransCanada Corporation are among its 15 sponsors.
In an interview in Saint John, Atlantica’s president, Colleen Mitchell — a former Irving Oil employee — promoted Maine’s “tremendous opportunity” in the development of an “energy cluster” in New Brunswick if the Irving Oil-TransCanada Energy East pipeline and terminal came to pass.
This pipeline to Saint John from the oil sands of western Canada, she said, would provide “lower-cost crude” to be transformed by the Irving refinery into refined petroleum products for the benefit of New England.
While Irving Oil treats Maine as an important nearby market — developing potentially troubling market power in doing so — the politically more assertive J.D. Irving has treated Maine as a resource-extraction region.
The state has always been that. A 1970s’ Ralph-Nader-sponsored book, The Paper Plantation, described the global paper companies’ economic and political hold on the Maine of that era.
For a variety of reasons the paper-company grip on Maine has weakened. Only 10 of the 24 paper mills operating 35 years ago are still around. And now the only forest landowner in Maine with its own paper mills is J.D. Irving.
“Political control with economic power” is what Mainers should watch out for with Irving, economist Moir said.
But those types of power have always gone together. The difference now is not that an industry could dominate a state, but that a family could.
End of series
The Maine Center for Public Interest Reporting is a nonpartisan, non-profit news service based in Augusta. Email: email@example.com. Web: www.pinetreewatchdog.org.