Thursday, August 04, 2005

Sask: Do you want to own more World Wide Pork?

Saskatchewan's pork industry has really hit a rough spot of late. The most prominent set back was the shut down of World Wide Pork in Moosejaw.

As with too many struggling businesses in Saskatchewan, taxpayers own a chunk of this outfit in the form of $2 million in debt. I wrote a column recently on the subject which garnered this rant from agriculture minister Mark Wartman in a weekly newspaper:

The Government’s only investment in Worldwide Pork is in the form of debt. We are a secured creditor: the debt is secured by the plant and equipment. The private sector owners of the company are working on a restructuring plan and have asked for time to implement that plan.

Contrary to what Mr. MacLean suggests, the Government of Saskatchewan is not planning on a “bail-out” for Worldwide Pork. However, we will continue to work with the owners in an effort to see the plant resume operations and its 270 staff return to work.

In today's LP, we see this item on World Wide Pork.
Hal Cushon, the assistant deputy minister of Agriculture, said the government needs to see a business plan first and has no intention of becoming a major investor in Worldwide Pork.

"We won't be the first investor or the major investor in it," Cushon said.
Notice the not-so-subtle change in tone. They went from "we aren't going to bail them out" to "we won't be the first to to bail them out."

Perhaps they won't be the first, or the biggest. Why directly subidize the operation when there other, less transparent ways? A bigger concern than the government throwing more good money after bad is the prospect of the labour sponsoured Golden Opportunites coming is as white knight.
Rick Van Beselaere, counsel for Worldwide Pork, said that Farm Credit Canada is prepared to consider a $2 million to $3 million cash injection into the company. In addition, Golden Opportunities, a provincial labour-sponsored venture capital fund, has expressed interest in investing in the company, Van Beselaere said.
Anyone remember Crocus?

Tread carefully, and not a single tax dollar should touch this operation.


Shawn said...

You have to love these labour-sponsored funds. Pick the biggest losers in the province and then pray for a gov't bailout so your investment doesn't get flushed.

John Murney said...

I wholeheartedly agree!

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