Sask. admits Spudco error

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Published: February 27, 2003

The Saskatchewan government misled the public about the financing of its potato venture, premier Lorne Calvert admitted last week.

It also ignored its own policy to use union labour when it built three potato storage sheds.

“For these mistakes, this government must be held accountable,” he told reporters. “As leader of government, I accept responsibility.”

The province lost $28 million in the Spudco venture and is being sued by Judith River Farms Ltd., Coteau Hills Potato Corp., Lake Bend Potato Corp., Newbridge Potato Corp. and Mark Langefeld.

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A report by Calvert’s deputy minister, Dan Perrins, which was released Feb. 17, looked at the questions of tendering policies, whether the ownership structure was set up to avoid international trade investigation and whether the business relationship between the government and Con-Force Ltd. was accurately portrayed.

Con-Force was to be the private partner in the construction of the potato storage sheds. It was to hold 51 percent of the common voting shares in each of the sheds.

“CFI was required to act as developer and upon completion act as manager for each storage company, however beyond that, it was not required to contribute capital or other financial assistance to the storage companies,” Perrins wrote of the memorandum of understanding signed by the two parties on April 16, 1997.

His review singled out cabinet minister Eldon Lautermilch for a letter he wrote on April 28 to another builder who said he could build the storage sheds for much less than Con-Force could.

Lautermilch, then minister in charge of SaskWater, said Spudco was a minority partner in the facilities, even though that was no longer the case.

Lautermilch was removed from the industry and resources portfolio last week and moved to intergovernmental and aboriginal affairs.

The report also noted the former president of SaskWater, Brian Kaukinen, was quoted in a May 1997 newspaper article as saying that Con-Force and the government would be partners.

Perrins wrote: “The relationship with Con-Force was inappropriately portrayed as a relationship where the risks and rewards were shared.”

He also found that the storage sheds were built outside the Crown Construction Tendering Agreement because of the urgency of finalizing crop sharing arrangements and having storage in place.

“This action does not appear to be unreasonable,” he wrote.

Perrins found that the risk of international trade sanctions was minimal, as long as the storage facilities operated without subsidies.

Opposition house leader Dan D’Autremont said five years of lies and cover-up had finally caught up to the government.

About the author

Karen Briere

Karen Briere

Karen Briere grew up in Canora, Sask. where her family had a grain and cattle operation. She has a degree in journalism from the University of Regina and has spent more than 30 years covering agriculture from the Western Producer’s Regina bureau.

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