Monday, May 09, 2005

Saskatchewan's biggest boondoggle

From a land where waste and mismanagement are way too commonplace, it appears the Saskatchewan government has broken all the records.

In a recent Let's Talk Taxes column I wrote:

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.

It appears I spoke too soon...The Regina Leader Post's Murray Mandryk (who has been around a long time) pegs the real loss since 1989 at nearly $750 million. The province defends this "investment" by pointing to the 150-200 jobs the mill provides. I have a better idea -- lets randomly select 750 Meadow Lake residents and make them all millionaires. Surely that would be a better investment than throwing tax dollars at a money losing pulp mill. But maybe I'm missing something.

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