On December 2, 2003 Sasktel announced the merger of one of their many pet project companies (which has never made money) with another money losing company. Tappedinto, an internet streaming video provider, merged with another little-known company called Streamlogic.

Information obtained by the Canadian Taxpayers Federation through Freedom of Information reveals it cost taxpayers $717,518 to make the merger happen.

Here's the story. Tappedinto is a dog - it has never made money. Yet Sasktel kept throwing good money after bad by continuing to buy new equity. They starting buying equity in 2001 at $4.11 (USD) per share. They continued buying up hundreds of thousands of shares at that price until March of 2003. Three months later they purchased more equity at the bargain rate of 50 cents. The continued buying as the value of the company nosed-dived. Last October, Sasktel picked up half a million shares from another investor for one measly dollar.

With investors quickly jumping off the Tappedinto bandwagon, a merger with Streamlogic was proposed. But the only way a merger could happen is if Sasktel kicked in another $717,518 to sweeten the deal. A price tag they somehow failed to mention in their public announcement on December 2.

Now, for a grand total of $7 million, the taxpayers of Saskatchewan own a 38 per cent equity position in a money-losing company called Streamlogic. Sasktel is hopeful that the new company will be "cash flow positive" this year. Here's to hoping!

Sasktel officials say they're getting a heck of a bargain. Others say fools and their money soon part ways.

The problem is deeper than this. Because it's a government owned and operated crown corporation it plays under a difference set of rules and incentives than private sector businesses do. We have lawyers and NDP partisans running one of our largest utilities. They don't operate as if it were their own money. It provides an atmosphere of unusual freedom to pursue risky ventures that only make sense to lawyers and political partisans.

We have our telephone company spending $60 million (although the official total is constantly changing) to become a television broadcaster and compete with the private broadcasters. Their goal - to acquire 20 per cent of the television market. Imagine trying to compete against taxpayer-backed Sasktel who is bound and determined to take 20 per cent of your business. No wonder businesses aren't moving to Saskatchewan.

Sasktel also owns and operates a security company. This is another great example of Sasktel going where they shouldn't.

Be prepared to add MaxTV and Tappedinto to the growing list of money losing meanderings by Sasktel. They've lost millions on investments in internet companies, PR firms and a variety of outfits outside the province and overseas.

Sasktel argues their investment portfolios have yielded hundreds of millions in profit. Funny how we don't see that reflected in our phone bills. On several occasions over the last couple years Sasktel has successfully asked for permission from the CRTC to raise rates.

What is the purpose of these investments, if not to lower our phone bills