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Second tire processing contract from Saskatchewan awarded to US company

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A US company now owns both contracts for tire processing in Saskatchewan. Critics are once again calling for transparency from the government.

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A US company now owns both contracts for tire processing in Saskatchewan. Critics are once again calling for transparency from the government.

“We are back to having only one processor in the province,” Mike Richards, chief operating officer of Shercom Industries, said in an interview on Wednesday.

California-based Crumb Rubber Manufacturers Ltd. (CRM) has been awarded the contract to process tires in the north, according to a press release published Monday on the Tire Stewardship of Saskatchewan (TSS) website.

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Now that the U.S. company is the selected processor in both the south and north of the province, Richards wants to know why the Saskatchewan government split the contracts in the first place.

“What was the problem anyway? What problem were you trying to solve?” he asked.

Shercom closed its Saskatoon recycling facility in April 2023 after TSS awarded the southern contract to CRM in 2022. CRM then opened a facility in Moose Jaw.

In its press release, the TSS stated that the establishment of two sites to process scrap tires will “improve efficiency.”

“By processing in the south and the north, program costs are reduced,
“Will have an impact on the environment,” TSS CEO Stevyn Arnt said in the press release.

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Shercom's legal counsel argued that language in the 2023 RFP for a northern operator excluded Shercom from participating in the bid, as did the previous RFP for a southern operator. Although the Saskatoon company was “involved in the RFP,” Richards said it did not bid directly on it.

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Richards said CRM ships raw material to Calgary, while Shercom, which still operates outside of its now-closed recycling facility, purchases the same material from Alberta, Ontario and BC to continue making its front-end products.

“What’s happened in Moose Jaw is that they’re either shredding the tires or shipping them out of the province,” Richards said.

In April, Arnt confirmed that a “limited number of scrap tires” were sent from the province for processing by CRM.

“The real question is why that is,” Richards said. “Since 2012, we have been the only processor in the province, shredding tires and turning them into value-added products. The program has been running smoothly.”

Meara Conway, NDP ethics and democracy critic, reiterated her call for the provincial government to explain why all this is necessary in a speech in Parliament on Wednesday.

“The Saskatchewan Party government has effectively pushed a local Saskatchewan company out of the tire recycling market and given a California-based company a monopoly,” Conway said.

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Official opposition ethics and democracy critic Meara Conway on Monday, February 26, 2024 in Regina. Photo by KAYLE NEIS /Regina Leader-Post

She said the NDP wants to see an unedited market study as well as a procurement study from the TSS on why a second tire processor is needed in Saskatchewan.

“We don't even know what the rationale or thinking behind it was. Basic transparency is the first step,” she said, adding that a market study she obtained through a Freedom of Information Act request was “100 percent redacted.”

In an emailed response in late April, Arnt said the intention was to introduce “new technologies” to increase value-added processing and reduce the environmental impact of transporting tires across the province for processing.

“We believe that by reducing logistics costs, we can use these resources to clean up the many piles of used tires on farms and in communities,” he wrote at the time.

— with files from Larissa Kurz

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