Potential Irving Oil sale could be ‘devastating’ for Saint John: economist

Saint John Mayor Donna Noade Reardon said she’s hopeful Irving Oil will continue to employ a large amount of Saint Johners even if it’s sold to a foreign company.

Reardon said she received a call from Irving advising her the company was undergoing a strategic review that could result in a sale on Wednesday shortly before a press release was issued.

Saint John is home to Irving’s headquarters as is its oil refinery, the largest in Canada.

“I would hope operations would continue the way they are now,” Noade Reardon said of a possible sale to a foreign buyer.

“I mean they’re not, obviously, moving the infrastructure, so that would all remain here. It’s just different when you have a “landlord” that’s on another continent maybe,” she said.

UNB economist Herb Emery said the infrastructure’s presence in Saint John doesn’t provide any guarantees operations will remain there.

“I would expect any sale would have some kind of provision where there’s a transition, let’s say, over a decade,” he said in an interview.

“A sale is most likely going to offshore the head office at some point,” he said.

He explained that because Irving Oil was primarily based on exports, they are mostly competing with American refineries who don’t have to contend with Canada’s clean fuel regulations.

“Domestic refiners may be able to handle this clean fuel regulation, but the unique exporting properties of the Irving refinery make this a very different proposition,” he said.

He said a potential sale could be devastating for Saint John’s job market and economy, as well as the province as a whole.

Half of New Brunswick’s exports are from Irving Oil.

He said losing the refinery would “would basically amount to a loss of 20,000 people population in the Saint John region.“

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While New Brunswick’s population has been growing, Emery said most of it is focused in Moncton, and Saint John “still requires a lot of industry to keep it’s population growing.”

Noade Reardon said with so many unknowns, she “didn’t want to react too strongly or panic.”

She remains optimistic as Saint John further diversifies its employer base.

“You’ve got the port going on in Saint John — we’ve just cut the ribbon on the wind farm in Saint John — you’ve got Cooke Aquaculture in Saint John, we’ve got a lot of things going on Saint John,” she said.