An Ontario construction company has been dealt another legal blow in its fight against the New Brunswick government over three major bridge projects.

New Brunswick Court of Appeal Justice Kathleen Quigg dismissed Julmac Contracting Ltd.'s motion seeking to appeal a lower court's choice not to grant an injunction that would have allowed its employees to return to work on the three projects.

Speaking to lawyers for the two parties in court Friday, Quigg said she did not think Julmac had satisfied criteria needed for an appeal to go forward.

She said she also found no reason to doubt the correctness of Court of King's Bench Justice Richard Petrie's earlier decision denying the injunction request.

"Overall, the moving party has not convinced me that the proposed appeal would have had a reasonable possibility of success," Quigg said.

Quigg dismissed Julmac's motion and ordered the company to pay $1,500 in costs to the province.

The decision marks the latest chapter in a feud between the New Brunswick government and Julmac, which had been contracted by the province to do work on the Anderson and Centennial bridges in Miramichi, as well as the Mactaquac Dam bridge near Fredericton.

However, the relationship between the two parties soured in 2023, with Julmac filing a free trade complaint and civil lawsuit alleging the province applied stricter standards to its work than to New Brunswick companies.

The allegations haven't been tested in court, but on Feb. 20, the province abruptly ordered Julmac to remove itself from the three projects.

Julmac filed a motion in the Court of King's Bench asking for an interlocutory injunction that would effectively allow its employees to resume work, arguing the injunction would prevent "irreparable harm" from coming to it and its 120 employees while it pursued legal action against the province for removing it from the projects.

On March 28, Petrie denied the injunction request, writing that the court did not have jurisdiction to grant one under the Proceedings Against the Crown Act.

Lawyers make arguments

Earlier Friday, lawyers for Julmac and the province argued for and against allowing an appeal of Petrie's decision.

Julmac lawyer Shalom Cumbo-Steinmetz argued there was case law where an injunction had been granted under similar circumstances.

"There's good reason to doubt the correctness of the decision [by Petrie]," Cumbo-Steinmetz said. "Appellate intervention is needed."

Mark Heighton, lawyer for the province, disagreed, arguing the cases cited were different in circumstances from the facts in this case.

Heighton added that an injunction in this case would effectively act as "final relief" in favour of Julmac. He urged Quigg to dismiss the motion.

New contracts awarded

Part of Julmac's request for an injunction also sought to prevent the province from awarding contracts for the three projects to other companies.

The Mactaquac Dam bridge is one of the projects the province removed Julmac from, and on Friday, a lawyer for the province said a new contract for that work has been awarded to another company. (Mike Heenan/CBC)

On Friday, Frederick McElman, a lawyer for the province, revealed that contracts had been awarded this week to complete the work on the Mactaquac Dam bridge, as well as the Anderson Bridge, though he did not say which companies received them.

CBC News has asked the Department of Transportation and Infrastructure for information about the three projects.

Under the Proceedings Against the Crown Act, Julmac had to give the province 60 days' notice before filing a lawsuit for being removed from the projects.

Cumbo-Steinmetz said that notice period means Julmac can't file its lawsuit until May 12.

Premier Susan Holt's bold talk about "eliminating" and "tearing down" interprovincial trade barriers still has a long way to go before it catches up with economic reality.

Holt's latest shuttle diplomacy on internal trade took her to Newfoundland and Labrador, where she signed another memorandum of understanding with another counterpart.

The premier has championed what she calls an "Atlantic free trade zone" in this region and a push to strip away restrictions on internal trade nationwide as fast as she can.

"Who can move forward with us? How far can we go? Let's go all the way," she said earlier this month after signing her first MOU in Toronto with Ontario Premier Doug Ford.

New Brunswick Premier Susan Holt’s latest shuttle diplomacy on internal trade took her to Newfoundland and Labrador, where she signed another memorandum of understanding with another counterpart, Premier Andrew Furey of Newfoundland and Labrador. (Mark Quinn/CBC )

Active verbs aside, Holt's actual approach has been cautious, focusing on areas such as government contracting and worker accreditation, rather than ending protectionist policies that shield major New Brunswick industries from competition. 

"It's one thing to declare your intent," said Ryan Manucha, a research fellow at the C.D. Howe Institute who studies internal trade.

"This is where it's going to get pretty clear how far people are actually willing to go when they say 'free trade.'"

The two changes Holt cites most often will allow more interprovincial alcohol sales and will let trained workers certified in other provinces start working here more quickly.

Her rhetoric implies more sweeping changes.

"We're going to continue to move as quickly as possible to take advantage of this opportunity to remove barriers for New Brunswick entrepreneurs and for all Canadians to have trade happen more quickly and much less expensively," she said April 16 in Toronto.

Susan Holt’s internal trade push has big exceptions

 

New Brunswick premier wants to go “all the way” tearing down barriers — except for major resource sectors.

MOUs are not binding agreements. They're more of a declaration of an intent to negotiate.

The two MOUs recently signed by New Brunswick say provinces will "build on" existing legislation, "strive to" open up trade, "encourage" other provinces to join in and "identity options" for harmonizing provincial regulations.

Ontario commits to go further than New Brunswick.

Ontario pledges to eliminate all of its exemptions under the Canadian Free Trade Agreement — a 2017 national accord on open trade that gives provinces the leeway to choose to keep some protectionist policies. 

Research fellow Ryan Manucha, who has advocated open trade within Canada, said it makes sense for provinces to protect their home-grown industries, but it could slow the momentum for lowering barriers or lead to inconsistency from province to province. (Submitted by Ryan Manucha)

New Brunswick only commits to "work towards" removing its exemptions — and only as they apply to Ontario. 

Holt's government has already eliminated nine of New Brunswick's 16 exemptions, but so far she has not touched the big ones: the trade barriers that allow her to protect the province's major resource sectors from out-of-province competition.

Provincial policies require forestry companies licensed to cut wood on Crown land to sell that wood — with few exceptions — to mills within the province, for example.

Kim Allen, the executive director of the industry group Forest NB, says those policies have created an integrated forestry sector that ensures there is enough wood to keep those mills running.

It also ensures the province gets the maximum value out of harvested wood by ensuring we're not exporting raw logs but finished lumber, she said.

"The intention is to protect the highly integrated industry here in the province," Allen said.

"It is the province's largest economic driver, so changing the flow of Crown wood could potentially lower — could impact the value of the raw product that's flowing out of the province. It would also put manufacturers at risk and threaten sustainable jobs."

Holt's government is being similarly cautious about seafood processing.

The province doesn't now require seafood harvested here to be processed here, but the existing exemption allows a future government to do so.

 Holt was in Toronto on April 16 to sign a memorandum of understanding on interprovincial trade with Ontario Premier Doug Ford. (Arlyn McAdorey/The Canadian Press)

The Liberals say they'll eliminate that possibility — but only for provinces that reciprocate.

That is not going to happen in Newfoundland and Labrador, Premier Andrew Furey said last week as Holt stood by his side after they signed their MOU.

"The premier knows very well — she's heard me say it today, twice — that there are no-fly zones," he said.

Ending a minimum in-province seafood processing requirement "would be a death blow to rural Newfoundland and Labrador. We're not interested in that. We're not doing that."

Furey added: "Equally, I'm sure she would not appreciate us taking all her lumber into Corner Brook Pulp and Paper."

At a recent news conference, Holt's language on trade barriers for resource industries was considerably more cautious than it is on the general concept of liberalized trade.

"We want to make sure we're very careful about New Brunswick's resources and how they are currently protected, and what benefit there might be to gain from getting access to partners and other places and what risks there are to potentially seeing our wood go elsewhere to be processed," she said.

The province doesn’t now require seafood harvested here to be processed here, but the existing exemption allows a future government to do so. The Liberals say they’ll eliminate that possibility – but only for provinces that reciprocate. (CBC)

Furey was more blunt at his joint appearance with Holt in St. John's. 

"It's a very easy attitude to say, 'Let's get rid of every trade barrier,' but what's the next sentence?" he said.

Manucha, who advocated for open trade within Canada, said it makes sense for provinces to protect their home-grown industries, but it could slow the momentum for lowering barriers, or lead to inconsistency from province to province.

"Are we now stalling at a threshold question of what is or isn't going to be lumped in?" Manucha said. "And are we going to have a medley of arrangements?

"Free trade is the classic story of NIMBYism. … As soon as we start to touch your industry, we start to get some concern." 

Holt said in St. John's that it was still worthwhile to open up as much as possible at a time when the U.S. tariff threat has given it a political impetus.

"It might not be everything," she acknowledged, "but it is something, and it is progress." 

It is not, however, true interprovincial free trade.

The New Brunswick government has officially removed an Ontario construction company from three major bridge projects in the province, the company's lawyer said.

Julmac Contracting Ltd. was told Monday to stop work on upgrades to the Mactaquac Dam bridge near Fredericton and the Centennial Bridge in Miramichi, and on a replacement for Miramichi's Anderson Bridge, lawyer Shalom​​​​ Cumbo‑Steinmetz told CBC News.

"This is a serious escalation between the two parties," he said.

"It is ultimately the province and the people of New Brunswick that are going to suffer from this dramatic move …  because work will be delayed and it will not progress on schedule the way it would have if Julmac had been permitted to continue construction." 

Cumbo‑Steinmetz repeated an accusation by Julmac's owner, Derek Martin, to CBC News last week that the province wanted the company off the projects because Julmac had filed a complaint against New Brunswick under an interprovincial trade agreement.

Julmac alleges in the trade complaint and in a civil lawsuit filed in 2023 that the province applied stricter standards to its work, such as design drawings, and was less flexible on timelines, than with New Brunswick construction companies. 

Martin said this was what had caused existing delays on the projects.

 

Contractor's lawyer predicts delays on 3 N.B. bridges

 

The lawyer for Julmac Contracting says the Ontario company has been removed from major infrastructure projects in New Brunswick because of an internal trade case.

Cumbo‑Steinmetz said the company will fight the province's decision in court.

In a response to Julmac's civil suit filed last fall, the province denied it was treating the Acton, Ont.-based company differently because it's from outside New Brunswick.

The province's statement of defence said Julmac's lawsuit relied on "repetitive generalizations without material facts."

Julmac's submissions "are routinely lacking in detail and fail to comply" with standard specifications, the province said in the filing. 

"Any delays encountered by the plaintiff [Julmac] in respect of scheduling arise from the failure of the plaintiff to perform its contractual obligations."

The Department of Transportation and Infrastructure did not immediately respond to a request for a comment or for an interview with the minister, Chuck Chiasson, about the company's removal.

     A bridge at the Mactaquac Dam called the Approach Channel Bridge runs adjacent to the generating station and allows traffic to cross the dam. (Shane Fowler/CBC News)

But the termination raises questions about three major projects already behind schedule.

The Mactaquac bridge was supposed to be finished last fall.

The Anderson Bridge was reduced to one lane in 2016 because of its deteriorating condition, and work on a replacement bridge started in 2020. It was also supposed to be finished last year.

The Centennial Bridge upgrade was announced in 2015 as a nine-year project, but major work on the deck, or driving surface, is expected to take the next three summer construction seasons to complete. 

The total cost of that project was pegged this month at $195 million by the Department of Transportation — more than double the original $82.8 million estimate.

The province has until Feb. 24 to file a motion to have the internal trade tribunal throw out Julmac's complaint.

Cumbo‑Steinmetz said he hasn't seen any such filing yet.

Under the 2017 Canadian Free Trade Agreement, provinces are not allowed to treat out-of-province contractors differently from their own.

The agreement allows for a three-person tribunal to be appointed to hear complaints about alleged violations of the agreement, a process that is now underway between Julmac and the New Brunswick government.

An Ontario-based construction firm is blaming the New Brunswick government for delays it has encountered in getting work done on projects, including the Marysville Bridge in Fredericton and the Centennial Bridge in Miramichi.

Julmac Contracting Ltd. is suing the province, identified as GNB in the statement of claim, alleging delays on these and other projects are the result of overly onerous requirements for the work Julmac has been contracted to carry out, compared to what's required of New Brunswick-based companies.

"GNB has discretion over whether to require contractors to use more expensive materials, or to provide more detailed submittals in support of proposed designs, or to employ more expensive construction methods — beyond what is required for safe design and construction," Julmac says in its claim filed in Fredericton Court of King's Bench.

"On contracts involving locally based construction companies, GNB systematically does not require that the contractors meet these higher standards. When JCL is the contractor, GNB systematically insists that JCL meet this higher standard."

Aside from the Marysville and Centennial bridges, Julmac says in its claim that it holds contracts with the province to carry out work on the Mactaquac Dam crossing, and Anderson Bridge in Miramichi.

Construction firm says provincial government to blame for bridge delays

In Fredericton, the $7.3-million Marysville Bridge refurbishment was supposed to be completed in 2023, but the completion date has been revised to the end of this year.

That's left motorists dealing with delays in crossing the bridge, as it has mostly been reduced to one lane since July 2022.

Alleged unfair treatment

Julmac, in its lawsuit, alleges the delays in its bridge projects are due to unfair treatment by the Department of Transportation and Infrastructure.

The lawsuit alleges there's a "two-tiered playing field" between out-of-province contractors and local contractors that bid on procurement projects.

Julmac claims the department subjects it to overly stringent reviews of the work it conducts, resulting in project delays and cost increases for the company.

The company says less rigorous reviews are done when New Brunswick companies are in charge of a project, though the lawsuit doesn't name specific companies or offer examples of when that happened.

Julmac also says the Department of Transportation and Infrastructure requires it to use more expensive plywood when it comes to doing concrete formwork on bridges, costing the company hundreds of thousands of dollars more than if it were allowed to use regular plywood.

The company says by comparison, the department lets local contractors use regular plywood, allowing those companies to submit lower bids and complete projects at a cheaper price.

"JCL's projects have been unjustifiably delayed by GNB's increased requirements … and by GNB's protracted and unfair drawing review and approval process,"  Julmac says in its claim.

Julmac has made similar allegations against the New Brunswick government in a complaint filed under the Canadian Free Trade Agreement, which governs inter-provincial trade rules in Canada.