Relief — and speculation — after Irving Oil opts against sale
Canada’s biggest oil refinery will remain in local hands, perhaps because of Trump tariff threat, expert says
There's relief in Saint John and across New Brunswick that the province's biggest exporter is staying put.
There's also no clear answer why Irving Oil made the decision not to sell.
The century-old company announced in June 2023 that it was launching "a strategic review" of the company, including a potential full or partial sale.
That raised the prospect of a new out-of-province owner scaling back operations in Saint John, including at the company's head office.
"There has been some instability with that whole thing being up in the air. We weren't sure what was going to be happening," Saint John Mayor Donna Reardon said.
"People talked about that beautiful new building we have up on King's Square. Would that become vacant? Would that go up for sale as well?"
Late Tuesday the wait was over. The company said in a news release that it is "strong and secure" and would not be sold.
"We are pleased to confirm Irving Oil will remain a privately held company, and we remain as committed to our people, our customers and our communities today as ever before," it said.
The Saint John refinery is Canada's largest, processing 320,000 barrels of crude oil per day into gasoline and other fuel products.
It's also New Brunswick's largest emitter of greenhouse gases that warm the climate.
The company has 4,000 employees, with almost half of them at head office and at the refinery.
"A lot of their staff that work at the home office shop with us, so that's going to keep a lot of business in the city," said Steve Henderson, an uptown business owner whose wife works for Irving Oil.
Another business owner from outside the city, Ross Harris, said he goes out of his way to buy Irving gas.
"I think we need Irving here. New Brunswick wouldn't be what it is today if it wasn't for Irving," he said.
Now that the guessing game is over about a potential new owner, the speculation has turned to why Irving made the decision to stick with the status quo.
"Business is good for them right now," Henderson said.
"They're going to keep making money so they may as well keep things going as it is."
The company did not respond to an interview request from CBC News.
Its statement doesn't explicitly exclude the possibility that the family sold a minority ownership stake in the company to non-family investors.
But indications are that the company is sticking with the status quo: ownership by a trust controlled by the family of Arthur Irving, who died last year.
New CEO
Tuesday's announcement identified a new CEO, Jeff Matthews, who has been Irving Oil's chief business development officer since 1994 and added chief financial officer to his duties six years ago.
"Having Jeff Matthews at the helm shows continuity," John Herron, New Brunswick's natural resources minister, said.
"His business development background means it's a company that's focused on the future."
University of New Brunswick economist Herb Emery said it's possible Irving Oil would "perceive more empathy" from federal Conservative Leader Pierre Poilievre after a decade of increasingly stringent regulations on greenhouse gas emissions.
The federal Conservatives are promising to adopt a more oil-friendly approach if they win the election later this year, including repealing Liberal changes to the federal environmental approval process.
Poilievre promised in 2022 to ban foreign oil imports from authoritarian countries including Saudi Arabia — one of Irving's biggest suppliers of crude.
The Saint John refinery has imported Saudi oil since it opened in 1960. In 2023, it imported 53,000 barrels of Saudi crude, 20 per cent of its total imports.
That made Saudi Arabia its third-largest foreign supplier after the United States and Nigeria.
Poilievre called that level of foreign oil "insane."
In a video last year, he didn't repeat his promise of a ban but said his policies would help get more Canadian oil to the Irving refinery, including from Newfoundland and Labrador, where the province wants to boost its offshore production.
"Defund the dirty dictators abroad," Poilievre said in the video. "Produce responsible Canadian energy."
Emery says another factor in Irving's decision may have been the threat of U.S. tariffs on Canadian exports, making the Saint John refinery less attractive to potential buyers.
The refinery exports 80 per cent of its products to the United States, making it vulnerable to Donald Trump's threat of 25-per-cent tariffs.
"For a refinery that's exporting into the United States with most of its product, in the current trade climate, I don't think there'd necessarily be a lot of buyers," said Emery, who emphasized he was speculating.
"Maybe the asset value isn't as high as they may have perceived prior to the Trump election. It could be as simple as that."
Energy Minister René Legacy pointed out that the Irving refinery also imports crude oil from the U.S., making it "another great example" of the integrated cross-border economy that would make tariffs a bad idea.
Emery said it's possible Irving has merely postponed consideration of a sale until the tariff threat is over and the Canada-U.S. trade relationship stabilizes.
"The decision may be to keep the asset, ride it out and see what happens," he said.
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