SASKATOON – The Saskatchewan government is under fire this week amid allegations a $5 million forgivable loan it gave Intercontinental Packers is tied to the company’s decision to close its Vancouver plant and centralize operations in Saskatoon.
Three hundred B.C. workers will lose their jobs when the meat packing plant closes next spring.
Company vice-chair Fred Mitchell said the consolidation is necessary to keep up with increasingly competitive North American and global trends in the livestock production and meat processing industry.
“Our industry is facing unparalleled change,” Mitchell said. “We must consolidate our operations in order to remain competitive in a very tough marketplace.”
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Mitchell said Intercon, which boasts $300 million in annual sales, will continue to service the British Columbia market.
But the B.C. government isn’t worried about its meat market.
Dan Miller, B.C.’s employment and investment minister, accused the Saskatchewan government of “job poaching” by providing financial concessions to encourage the consolidation.
The 1994 loan could be in violation of the Agreement on Internal Trade, Miller said.
“We will be investigating the situation immediately.”
The AIT came into force July 1, 1995, to prevent the transfer of jobs between provinces. A “standstill” clause the provinces and federal government agreed to makes the execution date retro-active to July 18, 1994.
“The code of conduct within the AIT strictly prohibits subsidies aimed at causing firms to move existing jobs from one province to another,” said a B.C. government news release.
Loan not allowed
“A loan by the Saskatchewan government to IPL (Intercontinental Packers Limited) during the standstill period would violate that agreement.”
Miller also charged this type of transfer of jobs between provinces benefits no one.
“It does not create one new job,” he said. “We are very concerned about the job loss associated with the IPL move, particularly as it impacts on employees and their families.”
Saskatchewan intergovernmental affairs minister Ned Shillington said the loan, forgivable only if Intercon creates 400 jobs in Saskatchewan in three years, is not connected to the recent closure of the Vancouver plant.
“We were warned at the time that this might give rise to the suspicion,” he said. “It was just a coincidence.”
Intercon informed the Saskatchewan government of the possible closure, and Shillington said it was considered as background information.
“I am relatively confident no action by the B.C. government would be successful,” he said.
The move also sparked a harsh response from the union representing the 300 meat cutters, packagers and assembly line employees to be put out of work May 30, 1997.
Tom Fawkes, director of communications for the United Food and Commercial Workers, called the closure unethical and repugnant.
“You can color this any way you want, but the fact of the matter is they (Intercon) negotiated a deal with the Saskatchewan government where they got $5 million to dump 300 jobs in British Columbia,” Fawkes said from Vancouver.
“What this company did is just plain wrong.”
Details wanted
Saskatchewan Liberals were also quick to respond to the controversy, calling on the government to come clean with all the details on its agreement with Intercon.
“The NDP government is putting the reputation of Saskatchewan at risk,” said economic development critic June Draude.
“The fact that this government continues to have no master plan for investment or job creation is no excuse for these actions.”
Mitchell hinted last month the company was planning a major change. The family-owned business was in the news when members announced they patched up a bitter legal disagreement over control of Saskatoon’s largest private employer.
