Wednesday, February 01, 2006

What's another $15,000,000?

Court documents obtained by the CBC say the Saskatchewan government loaned another $15,000,000 over the Christmas to keep the Meadow Lake Pulp mill open. This loan happened while the mill was filing court documents seeking protection from its creditors.

The document shows that since 1990 taxpayers have lost $804 million. The current value of the mill is described as "nil."

I'm going to PDF the court documents for everyone to read. There is certainly more to come.

UPDATE: Here is the court document. Not a great scan, but it works.

UPPERDATE: Sorry...I just fixed the link to the doc.

Where are our political leaders on this? Silent.

Reader comment: Quote from Maynard Sonntag in May, 2003:

"Minister Sonntag congratulated Millar Western on the performance of the mill, noting that it had played an important role in strengthening the community. “As a major employer and generator of economic activity,” said the Minister, “the Meadow Lake pulp mill has been a great success since opening its doors 11 years ago.

Yeah, some success. Let's keep in mind that it was only last April that the province injected another $52 million into the project to relieve the mill of two of its biggest creditors. Surely they could have known 9 months ago that it was headed for creditor protection. Taxpayers are 50 per cent owners of the mill. And what of the $15 million loan over Christmas?

9 comments:

Anonymous said...

David, its much worse than $804 million, because SaskPower also spent tens of millions of dollars to build a very long transmission line explicitly to service the mill.

Without the mill in place and running, that asset effectively becomes stranded as a useless asset, and its cost effectively will be borne by the electrical consumers of the province.

PGP said...

When for the love of God will these twerps in government realize that there is NO future in pulp and paper industries?
Paper products are quikly becoming boutique items. Continuing lower demand for newsprint and other pulp based products. Its history! say goodbye.

Anonymous said...

Below is a quote from then Minister Maynard Sonntag on May 26, 2003 while visiting the mill:

"Minister Sonntag congratulated Millar Western on the performance of the mill, noting that it had played an important role in strengthening the community. “As a major employer and generator of economic activity,” said the Minister, “the Meadow Lake pulp mill has been a great success since opening its doors 11 years ago. Strategic capital investments like the one announced today will help the mill continue contributing strongly to the economic well-being of the Meadow Lake region and the province of Saskatchewan as a whole.”"

Apparently the NDP continues to believe that success is measured by the amount of taxpayers' money that gets flushed down the crapper.

And, doing the math, 804 million dollars versus a mill work force of 170 persons equates to $4.7 million per JOB!

Anonymous said...

You might also check out another bit of news that quietly slipped through: Crown Investments Corporation has already written off the mill. It is truely worth nothing.

Anonymous said...

I believe that there is a future in the pulp and paper industries: all industries experience cycles, and we also see this sector is still strong in Alberta and BC: I think that the problem is the NDP in SK! The only thing that they don't screw up is collecting royalties for non-renewable resources: then they promptly waste them!

Anonymous said...

Any link between this and the recent resignation of Tom Waller, former President of the CIC, and partner in a well-known Regina law firm that has done [b]a ton[/b] of work for the NDP government?

I mean, even some of the most die-hard socialists, at some point, must realize the sheer error of their ways. And unfortunately, you don't get to become CIC President without being a committed socialist and card-carrying NDP member in Saskatchewan.

John Murney said...

Government subsidization of private business doesn't work, regardless of where it is being done, and under what pretenses.

David MacLean said...

Well, if you ask the government they will say "it created 170 good-paying jobs and hundreds of spin-off jobs."

Problem is, when you build a false economy with subsidies you inevitably wind up hurting more people than you helped.

The mill would never have existed if it weren't for government subsidies. Now that market realities have caught up with mill, hundreds of livelihoods could be destroyed.

ok4ua said...

It's Ok to give a bunch of spoiled farmers 1/2 a billion dollars but don't help anyone else. And remember there are less than 60,000 farmers in Sask who most don't pay income tax and can write off everything.That's fair? It's good for the farm brats I know and I know a few. They must think working people are an unlimited source of money. They are already whining about next year being 200 million in the hole. How the hell can you project a crop that's not planted or weather that hasn't happened yet??? Something sounds like more crop insurance on risky money losing crops.

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