More delays to N.B. bridge work likely amid internal trade fight
First-ever case to reach tribunal process is ‘incredibly important,’ expert says
New Brunswick could face new delays on three major bridge projects as the provincial government moves to fire a major contractor — a move the company believes is tied to its legal fight over interprovincial trade barriers.
CBC News has learned that Julmac Contracting Ltd. received notices of default from the province on three projects: upgrades to the Mactaquac Dam bridge near Fredericton and the Centennial Bridge in Miramichi, and a replacement for Miramichi's Anderson Bridge.
A notice of default tells a construction company it has failed to live up to the terms of a contract and is often the first step toward terminating the agreement.
The province issued the notices just weeks before a deadline in tribunal proceedings that will hear a complaint by Julmac under Canada's interprovincial free-trade agreement — the first case of its kind to reach that point.
"What other reasons would they have to put us into default?" said Derek Martin, the owner of Acton, Ont.-based Julmac.
"I've been in the construction industry doing this for 35 years. What's the likelihood of having three default notices on three contracts within two minutes of each other?"
The province issued the notices on Jan. 31, Martin confirmed. Under the 2017 internal trade agreement, New Brunswick must file its application to quash Julmac's complaint by Feb. 24.
Martin said dropping Julmac as a contractor will "very likely" add more delays to the projects, which are already behind schedule — in part because of the province's treatment of the company, he claimed.
The Department of Transportation and Infrastructure refused to comment on the possible firing of Julmac because the company has a civil suit in Court of King's Bench seeking $27 million in damages from the province.
"I can tell you that the department will make every effort to move ahead with these projects in the most timely and efficient fashion," spokesperson Jacob MacDonald said.
Julmac alleges the government has treated it more harshly than New Brunswick-based contractors, which it says violates the Canadian Free Trade Agreement and has cost it millions of dollars.
That includes forcing it to use costlier materials, being less flexible on penalties for missed deadlines, and taking longer to review and approve plans compared to local companies.
"In effect, [the province's] conduct creates a multimillion-dollar subsidy for local contractors. This makes it very difficult for other contractors — that do not receive this preferable treatment — to compete," its filing says.
Martin said the replacement Anderson Bridge in Miramichi could have been finished last fall if the province hadn't delayed the approval of Julmac designs for several months.
New Brunswick-based companies aren't treated that way, he said.
Trade barriers between provinces have become a prominent issue recently as governments look for ways to mitigate the impact of potential U.S. tariffs on Canadian exports.
"It's certainly risen back up to the top of the priority list as we look to make sure that goods can flow between our provinces easily," Premier Susan Holt said last week.
"Thankfully, New Brunswick has always been a leader on this front. … We've never been one to put up many barriers because we don't want to face them in other provinces."
Holt's claim is contradicted by the Canadian Federation of Independent Business, which ranks the province second-to-worst overall for barriers to internal trade.
"Clearly someone else is seeing it," Martin said. "It's not just my opinion."
Although a handful of other challenges took place under a previous interprovincial trade deal, the Julmac case is the first to reach the panel stage under the updated 2017 agreement.
Ryan Manucha, a research fellow at the C.D. Howe Institute and the author of a book on interprovincial trade restrictions, said he's "thrilled" to see the "incredibly important" case reach this point.
"It's a sign of a system that's working," he said.
"It's a signal to Canadian governments that firms will take you to court, internal trade court, if you don't play by the rules of the CFTA that you signed up for. And … it's a signal to other firms that, hey, this is a legitimate avenue."
Three provinces — Ontario, Saskatchewan and Nova Scotia — are intervening in the case.
Julmac first started doing work in New Brunswick in 2021 and has tackled a series of bridge upgrades.
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.
Martin attributes cost overruns and delays on Julmac's projects to the province's treatment of the company because it's from outside New Brunswick.
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