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Ethanol: The Spudco sequel

Author: David Maclean 2003/03/03
A close look at the government's meddling in the economy reveals a rather startling trend. First, consider the Spudco affair, which as a result of a Canadian Taxpayers Federation complaint, RCMP are currently looking at to determine if indeed the government broke the law in their failed $28 million foray into the potato storage business.

The Premier's Deputy Minister's Report on Spudco indicates the province felt enormous pressure to build the storage sheds.

"Decisions were made under the urgency of a looming growing season and expanded production-the sheds had to be built," acknowledged Premier Calvert in his reaction to the report. "-[T]here is little doubt that the environment in which decisions were made in 1997 was one of confusion."

The report also highlights the NDP government's flagrant disregard for their own public tendering policy: "The manner in which the storage facilities were constructed did not conform with the government tendering policy-[T]his was not a violation of any law, but rather a departure from policy."

Now that's the understatement of the decade. A departure in policy that contributed to the loss of $28 million taxpayer dollars, and the financial decapitation of countless businesses and investors.

Fast forward to the fall of 2002, and the government's glitzy sod turning with spit-shined shovels announcing the construction of new ethanol plants - a $20 million tax dollar "investment" so far. The similarities between Spudco and the ethanol deal are striking -- no public tendering process and an implied rush into action, lest we lose the plants to those capitalists in Manitoba.

Unless the government comes to its senses, we'll lament the day we even considered government investment in the ethanol industry. Some things can be can intuitively understood as a bad idea. The fact that most entrepreneurs won't touch ethanol with a 10-foot pole is disconcerting. Add to that remarks made by Dr. David Pimentel of Cornell University: "-ethanol production does not enhance energy security, is not a renewable energy source, is not an economical fuel, and does not ensure clean air-its production uses land suitable for crop production and causes environmental degradation."

Consider also the government's behind-closed-doors deal with EDS to out-source the province's computer systems - the billion dollar deal is among the largest in Saskatchewan history. Again, no public tender and no public consultation. We must sign this deal, lest we lose the labour-intensive call center jobs to-gulp-Winnipeg!

The pattern is clear. This government abhors the transparency and accountability of a public tendering process. They see opening up their deals to the public as a nuisance and a distraction from their interventionist agenda. The record also clearly shows that they are incapable of running successful businesses.

It's time this government abandons its soviet-era policy of government intervention and legislate bullet proof, transparent public tendering processes. Not only does it ensure the best value for taxpayer dollars, it's also a good way to avoid future Spudco scandals. Let's not go down this road again.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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