Provincial NDP raises questions about Sask. The party's involvement with an American rubber recycling company resulted in it being awarded a contract by a Saskatchewan company.
Shercom Industries, a Saskatchewan company that handles tire recycling in the province, It closed part of its operations in May 2023 after losing a significant share of the province's tire recycling contract to US-based tire processor Crumb Rubber (CRM). This led to the layoff of dozens of workers.
After negotiations with the Tire Service of Saskatchewan (TSS), the provincial regulator that manages tire recycling, failed, Shercom lost its exclusive contract in November 2023, and The company closed its processing facility.
On Tuesday, the provincial NDP released documents showing that former Ssec. The party's finance minister, Kevin Doherty, was appointed as a lobbyist by CRM, which was awarded the contract held by Shercom months later.
“Handing this contract over to an American company when a Saskatchewan company was actually doing the work, well, Mr. Speaker, it raises a lot of eyebrows,” NDP Leader Carla Beck said during question period on Tuesday.
According to Beck, Premier Scott Moe claimed he never met with Doherty regarding the contract that ultimately went to the American company. I asked the Prime Minister on Tuesday whether he had any concerns about the deal.
“In this particular case, Mr. President, there was a request for proposals [request for proposal] “I also understand that the company you are referring to has not made an offer.”
In an email response to CTV News on Wednesday, Shercom President Shane Olson said he was very disappointed with Moe's response to the question posed by Beck.
“The Premier's response clearly outlines the extent to which the Premier would be misled, or worse, would deliberately mislead the Legislative Assembly by suggesting that Chircom, a 30-year-old Saskatchewan success story, would not participate in the opportunity to secure a stable supply of raw materials, is He said.
During Question Period on Wednesday, Conway raised the topic again and asked Environment Minister Christine Tell her whether or not she had met with Doherty about the contract.
“The answer is no,” Tal answered, noting that tire recycling operations for the newly created northern and southern regions were selected through a request for proposals.
“The Southern Healer was selected through a legitimate and good faith process,” she said. “This CRM was selected from a small number of other backers who responded to the RFP.”
Conway said Thiel contradicted what Moe said Tuesday regarding the number of applicants for the RFP.
“It seemed like there wasn't one applicant, it seemed like there was more than one,” she said. “People deserve answers about how this deal went down.”
Conway said a lobbying record showed Doherty began lobbying for CRM in 2022 and asked for clarification on the role he played in “pulling the strings.”
According to TSS's 2022 annual report, the board approved a proposal to move forward with negotiating a contract with CRM as the county's southern processor on June 6, 2022, Thiel said.
“Mr. Doherty is not hired by CRM until November 2022,” she said.
Conway said there were many unanswered questions about the deal, and questioned why the government chose an out-of-province company when there is a Saskatchewan-based recycling company.
“The government of Saskatchewan had no role in selecting the proponent,” Till responded. “Obviously the economics made sense, the investment that was brought to Moose Jaw and the surrounding area, and the jobs in southern Saskatchewan.”
Conway asked about the business case that led to the decision to publish the two RFPs.
“The decisions made by the Saskatchewan Tire Department are exactly those decisions that decided how the province was divided and how it was divided,” Till responded.
Speaking to reporters after question period on Tuesday, NDP MLA Meara Conway said there is a troubling pattern of behavior when it comes to awarding contracts outside of Saskatchewan.
“We're looking for a little bit of transparency… the premier said one person bid on this RFP, and we're hearing from the community, the business community, that the RFP seems to be tailored to one company.”
Olson said TSS did not initially inform Shercom that they were issuing the RFP, and said they only received a copy after they requested it.
According to Olson, the first page of the RFP excluded Shercom from participating with two statements.
- There is currently one tire processor in the province (located in Saskatoon) and TSS is interested in acquiring a second processor(s), ideally in the southern part of the province.
- Through this RFP, TSS is looking to increase value-added processing in the province with new products and/or new markets and wants to minimize overlap with the offerings (products and markets) of the existing processor in the province.
Shercom obtained legal advice and was informed it was not qualified to submit a bid based on that data, Olson said.
“Shercom then raised their concerns directly with the president of TSS… TSS was adamant that the RFP was for information purposes only, and that TSS would not make any changes without discussing with Shercom first,” Olson said, noting that TSS assured them Shercom will not be negatively affected.
In the end, the contract was signed by the American company, and Chircom's processing facility was eventually closed.
Since losing the contract, Olson said Chircom now must import more than a million pounds of crumb rubber each month from counterparts in British Columbia, Alberta and Ontario, which comes at the expense of its business model.
“Shircom is now forced to support tire recycling programs in other provinces, while its multi-million dollar processing plant has been shut down,” he said.
-With files from Keenan Sorokan and John Flatters
