Concern over fuel supply in N.B. prompted letter to EUB, says premier

·3 min read
Premier Blaine Higgs pointed to moves by utilities boards in Nova Scotia and Newfoundland and Labrador to increase the wholesale margin on fuels in those provinces. (Ed Hunter/CBC   - image credit)
Premier Blaine Higgs pointed to moves by utilities boards in Nova Scotia and Newfoundland and Labrador to increase the wholesale margin on fuels in those provinces. (Ed Hunter/CBC - image credit)

Premier Blaine Higgs says concern about the supply of fuel in New Brunswick prompted his office to write a letter to the Energy and Utilities Board, asking its members to review an application by Irving Oil to increase the maximum wholesale margin on fuels.

Speaking on the New Brunswick Political Panel, Higgs said the letter didn't suggest his government supported an actual increase on the wholesale margin, but rather that it just wanted to see a decision made following concerns brought forward by industry.

"All we asked for was a decision to be made," Higgs said on the Information Morning podcast. "The EUB made a decision and it was not to make any increases.

"The company chose not to provide additional information and the EUB said well we have nothing to hear further. The outcome is clear."

The company Higgs referred to was Irving Oil, which in January applied to the EUB for a 62.8 per cent (4.09 cent per litre) increase in the allowed wholesale margin for motor fuels, including diesel and gasoline and a 54.9 per cent (3.02 cent per litre) increase in the margin for furnace oil.

A day after Irving Oil filed its application, a letter from Natural Resources and Energy Development Minister Mike Holland was sent to the EUB, saying he supported the application to review evidence in an expedited fashion, and if warranted, an interim order to increase the wholesale margin.

Documents obtained by CBC News later revealed the letter actually originated from Higgs's office.

Irving Oil eventually dropped its application in early March after the EUB ruled the company provided no evidence to support its need for interim price increases.

'I have nothing to gain from this'

Higgs, acknowledging he worked for Irving Oil "for a long time" before joining politics, rejected the notion that he is still connected to the company.

"I have nothing to gain from this — nothing personally to gain in any shape or form, but the issue here is they've laid off 250 people," said Higgs, referring to a move the company made since the COVID-19 pandemic.

Higgs also said recent economic difficulties the company has experienced have prevented it from performing hundreds of millions of dollars worth of maintenance and upgrades.

Irving Oil laid off 250 people last July and another 60 in January, citing impacts felt from the COVID-19 pandemic.
Irving Oil laid off 250 people last July and another 60 in January, citing impacts felt from the COVID-19 pandemic.(CBC)

He said utility boards in provinces such as Nova Scotia and Newfoundland and Labrador also recently increased fuel wholesale margins to help suppliers facing the same challenges as those in New Brunswick.

"The point that we're raising here is a concern about the supply. So Nova Scotia thought [an increase in wholesale margins on fuel] was necessary, Newfoundland thought it was necessary."

A case of bad judgment, says opposition

Opposition party leaders on the political panel criticized the optics of the letter, and why the premier would need to write the EUB to do a job it's already tasked with.

"You would think the company can do that request on their own, and when a premier or a minister in this case signs the letter, there's power and there's a perceived perception of influence in the outcome," said Liberal Leader Roger Melanson.

"This [EUB] is an independent body. They have expertise, knowledge based on facts ... to be able to make a sound decision."

Liberal Leader Roger Melanson said it was bad judgment on the premier's part to send a letter to the EUB about Irving Oil's application.
Liberal Leader Roger Melanson said it was bad judgment on the premier's part to send a letter to the EUB about Irving Oil's application.(CBC News)

He also questioned whether the premier was acting in the interests of New Brunswickers, when the increase, if approved, could have meant an additional $1 million per week in fuel costs for consumers.

Party Leader David Coon stood behind previous comments he's made, saying it was "wholly inappropriate" for the premier to be involved in the matter before the EUB.

"Irving Oil made their application, there was no need to encourage the EUB to do anything," he said. "The process is the process."