Saskatchewan’s government-owned potato company continues to lose money.
Crown Investments Corporation semi-annual financial results released last week show Saskatchewan Valley Potato Corporation, a wholly owned subsidiary of CIC, lost $700,000 in the first half of this year.
In the six months it operated last year, it lost about $500,000.
Prior to that, the company operated as Spudco and was a division of Sask Water. It lost more than $10 million in three years.
Slow sales and low prices contributed to the first-half losses in 2001. SVPC has also had some unexpected expenses.
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The company recently settled an outstanding tax dispute with two rural municipalities. The RMs of Canaan and Rudy billed SVPC a total of $310,000 for grants-in-lieu of 2000 taxes, designating potato storage facilities as commercial rather than agricultural.
CIC’s vice-president of investments, Zach Douglas, said last week negotiations resulted in an agreement to pay each RM $90,000, still substantially more than the company paid before.
As well, SVPC appealed its 2001 assessment.
“It was a decision by the board of revision that (the buildings) will be characterized as an agriculture asset,” Douglas said.
That means SVPC will pay less tax in future years, but it will pay to use RM roads.
“We’ve negotiated an ongoing agreement that’s much like haul-road agreements,” Douglas said.
Those agreements, based on actual impact, amount to about $20,000 per year to each RM to help pay for road maintenance due to heavy potato trucks.
The company has also partly resolved a dispute with Maritime potato buyer Cavendish Farms.
Last March, SVPC shipped 70
25-tonne containers of seed potatoes to Moncton, N.B., but Cavendish refused to accept the entire shipment when some of it was frost damaged.
The potatoes were sold to a processor at a lower price.
Douglas said he could not disclose the terms of the agreement, but said SVPC received credit for the amount the potatoes were worth as processing potatoes.
Cavendish also paid its bill for potatoes it bought subsequent to the problems in March.
The opposition Saskatchewan Party said the government’s potato venture has been a failure and it should get out of the business before it costs taxpayers even more.
The government has always said it intends to turn over the potato storage facilities to private business.
Douglas said earlier this year a review of SVPC’s future was under way. An announcement is expected this fall.
