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Meadow Lake pulp mill debacle worse than Spudco

Author: David Maclean 2005/05/02
Whenever the Official Opposition raises Spudco in the legislature it's met with a chorus of groans and cat calls from NDP MLAs and Cabinet Ministers.

To government members, the loss of $35 million tax dollars on a failed, soviet-style foray into the potato storage business is old news, and the taxpayers should just "get over it."

The government loves to point out that an election has been held since the Spudco bomb was dropped and they came away relatively unscathed. Water under the bridge, they would have us believe.

After Spudco hit the papers, the Premier had his top staffer conduct a review of the matter. As a result, Premier Calvert and Spudco chief Eldon Lautermilch performed the absurd ritual dance of political scandal - where Lautermilch prostrates himself before the Premier, resignation in hand. But watch closely as the Premier, resplendent with remorse and consternation, refuses to accept the resignation. Thus, the cycle of life continues at the Saskatchewan Legislature - assuring the survival of future generations of Spudcos, ISCs, and Navigatas.

And here we are, back at square one. The province has embarked on a money-losing safari that makes Spudco (formerly known as the biggest waste scandal in Saskatchewan history) look like very small potatoes.

The new King of the Jungle is Meadow Lake Pulp, which is part of the government's Investment Saskatchewan portfolio. The province has already spent $275 million tax dollars but three write-downs have reduced the value of that investment to $78.8 million. In recent weeks the province threw another $52 million into the swamp to buy the mill's debt owed to Ontario Municipal Employees Retirement Board and Sun Life Assurance. Saskatchewan taxpayers are now the mill's only creditor.

All in, that's a $327 million (not adjusted for inflation) "investment" into an asset that is currently worth a humiliating $130.8 million - that's a $200 million loss for taxpayers.

The government defends this expenditure, arguing that the mill employs 150-200 people and the mill has consumed "hundreds of millions of dollars" in wages, goods and services over the years. This is classic government logic. Instead of investing money into the mill, why not randomly select 327 Meadow Lake residents and give them each $1 million Having 327 millionaires in Meadow Lake would surely be an economic boon for the region.

Of course, our Official Opposition members are standing on their heads in the Saskatchewan legislature in opposition to this boondoggle, right Think again. Donna Harpauer, the Saskatchewan Party's critic for Investment Saskatchewan, told the Leader Post that the Opposition is "reserving judgment" on the move. Apparently she's going to write a letter to Minister Cline asking for the opportunity to question the Investment Saskatchewan board about the $52 million decision.

The stench of partisan politics is thick - especially when the Opposition is just a couple precious seats from the golden ring. The Meadow Lake seat, currently held by the Vice-Chair of Crown Investments Corporation Maynard Sonntag, is highly-prized by the Saskatchewan Party.

Minister Cline argues that the $52 million injection allows the government to have greater input into any possible restructuring of the company, and will potentially make it easier to sell in the future. In a perfect world, you might give him the benefit of the doubt.

What has this government done to earn the trust of taxpayers After the Spudco debacle, not a single politician was held to account. Taxpayers had their clocks cleaned in court to the tune of $8 million and the province still didn't admit to any wrong-doing.

Will pouring new tax dollars into the mill help save tax dollars in the future Can the government get out of this venture without closing the mill and losing precious jobs, while at the same time protecting our tax dollars The government says 'yes', but their track record screams 'no.'

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