September 4, 2006

 

Canadian government defends decision to bail out meat plant

 

 

Canada's government on Friday (Sep 1) defended its multimillion-dollar investment in Moose Jaw meat-packing plant that critics say would put taxpayers money at risk.

 

The government had invested C$3.8 million (US$4.2 million) in Moose Jaw Pork Packers, formerly known as Worldwide Pork.

 

The province injected C$1.5 million (US$1.6 million) in April to re-open the plant.

 

Before that, the government had put in about C$2.3 million (US$2.1 million) in secured debt which was later converted into an equity investment equivalent to a six percent share of the company.

 

Cabinet minister Kevin Yates said the April grant was the right action for the government to take.

 

If the debt had not been restructured at that point, the money invested would most likely have been lost, he added.

 

The board of Moose Jaw Pork Packers resigned earlier this week and the company suspended its operations as losses from low prices and high exchange rates mounted.

 

Yates said the future of the plant may not be as bleak as some may think.

 

There are no indications that the company is not viable and unable to move forward, he said.

 

Saskatchewan Party MLA Dan D'Autremont said the Opposition is concerned that the government may lose its investment.

 

While the Opposition is not in favour of direct government investment in a private company, it had welcomed April gesture to get the plant reopened.

 

 D'Autremont said Friday the government should not have put money directly into Moose Jaw Pork Packers.