NDP says tire recycling contract with U.S. company cost Saskatchewan at least 60 jobs

Michelle Berg /Saskatoon StarPhoenix. Shercom Industries’ tire-processing facility in Saskatoon on May 9, 2023.

“It’s looking like one big fat tire fire, for lack of a better term,” said NDP MLA Meara Conway.

Larissa Kurz, Regina Leader-Post

The NDP is questioning a tire recycling contract awarded to a U.S.-based company that drove out a local operator and has ties to a former Saskatchewan Party MLA turned lobbyist.

The issue dates back to December 2022, when Tire Stewardship of Saskatchewan (TSS), a government agency tasked with tire management programs in the province, announced a new contract with Crumb Rubber Manufacturers (CRM) to operate a recycling facility near Moose Jaw.

The Opposition flagged the contract in the assembly Tuesday, along with concerns over former finance minister Kevin Doherty’s involvement as a lobbyist for the California-based company.

Ethics and democracy critic Meara Conway said the search has resulted in the exit of Saskatoon processor Shercom, which previously held the sole agreement to process used tires in Saskatchewan.

The closure of Shercom’s processor and opening of CRM’s has led to “a net loss of 60 jobs, and potentially more we’re hearing are coming,” she said.

The CRM contract was initially part of a strategy to split the province’s processing into north and south regions.

However, all tires are now being directed to CRM’s facility near Moose Jaw for recycling, the provincial government confirmed in response to questions directed at Environment Minister Christine Tell on Wednesday.

“Everything I’ve been reviewing on this file suggests there’s significant concern around breaking the industry down into two parts, that there wasn’t the inventory or the work to support that,” Conway said.

Troy Fleece/Regina Leader-Post. Official Opposition Critic for Democracy and deputy leader Meara Conway speaks with reporters at the Legislative Building on July 26, 2022 in Regina.

Opposition Leader Carla Beck said that the terms of the request for proposal (RFP) on the southern facility “explicitly excluded” Shercom from bidding, which Conway said violates mandates the TSS is meant to follow regarding keeping manufacturing in-province.

The RFP states that TSS was “looking to increase value-added processing in the province” by adding a second processor, and to “minimize overlap” with current offerings from the Saskatoon operator, she read into the day’s record.

Records from the Office of the Registrar of Lobbyists also show Doherty registered in November 2022 as representing CRM, though the law in Saskatchewan allows for an individual to engage in up to 30 hours of lobbying before being required to register.

Doherty also lobbied on behalf of Surgical Solutions Inc., a Calgary proprietor given two health-care contracts to deliver out-of-province hip and knee surgeries and mammograms, for a total $8.5 million.

“It’s looking like one big fat tire fire, for lack of a better term,” said Conway, following question period.

Tell said CRM was selected through the appropriate RFP process, and was the sole applicant.

“There was nothing stopping (Shercom) from responding to that RFP,” she added.

She also said CRM was chosen as a proponent in June 2022, while Doherty was “not hired by CRM until November, December.” Asked how she knew, Tell said, “that’s what I was advised.”

Further, she said she has “never spoken with” Doherty in his capacity with CRM. It remains unclear if any previous environment minister had.

“It’s unacceptable that we don’t know,” said Conway. “They should come forward and be transparent about what meetings occurred, when and with whom.”

The business case for splitting the market into two regions was made by TSS, said Tell, whose role as minister is solely regulatory to “ensure that the tire recycling in the province adheres to certain standards.”

A report was done, as evidenced by a freedom of information (FOI) request done by Shercom this fall, but the details are not public. The 22-page document returned through FOI is fully redacted.

Tell said she has not read the report from TSS, but understood there were “environmental concerns” over transported tires from all over the province to a single facility.

“Administrators absolutely have responsibilities,” Conway said. “It’s her job to make sure the regulations are followed. How can she ensure that if she hasn’t read the report?”

Saskatoon’s Chamber of Commerce asked for a review of the decision last May, calling it “concerning” that a government agency decision was “siphoning jobs and market opportunities away from Saskatoon.”

Chamber CEO Jason Aebig said the decision “sandbagged a Saskatchewan success story” in a social media post Wednesday, hinting that tires may have been sent out of province to Alberta for a time.

An RFP to fill the gap and name a new operator of a northern facility recently closed in January. It was issued by SaskBuilds as an agent for TSS.