Saskatchewan taxpayers will know later this month how much they will pay to settle a lawsuit brought against the government by investors in a failed potato venture.
Peter Prebble, the minister responsible for SaskWater, told reporters Oct. 6 the settlement had not yet been finalized but he would announce details by the end of October.
The government has already lost $28 million on Spudco and Prebble said legal bills so far exceed $1.2 million.
The plaintiffs, who sued after the financial failure of Lake Diefenbaker Potato Corp., were seeking $4.8 million plus other unspecified damages. Mark Langefeld, one of the plaintiffs, estimated earlier this year the total could be as high as $100 million.
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The news of a settlement comes after the government said during the spring sitting of the legislature that it would fight the case. The government tried to countersue for $10 million but a judge tossed out most of that claim.
Opposition finance critic Ken Krawetz said the government knew a long time ago it couldn’t win the case.
Prebble said he thought the government “had quite a good defence.”
But he also said the government is not without fault.
“When you’re of that view that you’re not faultless, that government bears some responsibility, then sitting down with the other party and negotiating (a settlement) seemed to be an arrangement that is both fair to them and minimizes any further losses to the taxpayer (and) seemed to me to be the prudent thing to do,” said Prebble.
The government got into the potato business in 1996 when it created Spudco, a division of SaskWater, in order to expand the industry in the irrigation area beside Lake Diefenbaker along with local growers and investors. Three years later the venture collapsed.
SaskWater doesn’t have the money available to pay a settlement and will need help from Crown Investments Corp.
The Saskatchewan Party has called for an independent judicial inquiry into Spudco.
