A controversial tire processing contract awarded to California-based Crumb Rubber Manufacturers in 2022 was again a hot topic in the Legislature, as Opposition members once more tried to tie that contract to lobbying done by former Sask Party Finance Minister Kevin Doherty.
The opposition had been attempting to tie Doherty to a “sweetheart deal” for a hip and knee surgeries contract awarded to his firm’s client Clearpoint in Calgary. Over the last two days in the Assembly, the NDP had also tried to tie him to the southern tire processing contract awarded to CRM at the expense of the incumbent, Shercom Industries out of Saskatoon.
But Opposition Ethics and Democracy Critic Meara Conway struggled getting traction on the issue Wednesday as she grilled Environment Minister Christine Tell in Question Period. Conway had first asked Tell whether “she ever (met) with Mr. Doherty on this contract? Yes or no.”
“The answer is no,” Tell responded, as record in Hansard.
Conway went on to accuse the Sask Party of wanting “to push this all onto the tire stewardship agency, the TSS [Tire Stewardship of Saskatchewan], but it’s the Sask Party government that’s responsible. The regulations are clear. It’s that minister who’s responsible for the recycling program in the province. She should be able to answer questions about the changes made to this government, to the rules that led to the contract going to this Newport Beach, California-based company, which led to a net loss of Saskatchewan jobs. How did we end up with a contract that sends value-added manufacturing out of Saskatchewan to other places? Because the TSS report laying out the business case for this is fully redacted, Mr. Speaker.”
Tell responded that the process was done independent of government.
“Tire Stewardship of Saskatchewan is an industry, retail-led, independent board. Both northern and southern recycling tire, recycling operations were chosen through an RFP [request for proposal], Mr. Speaker. The southern processor was chosen through a legitimate, bona fide process.
“What the member is actually talking about, Mr. Speaker, they’re belittling the fact that this CRM [Crumb Rubber Manufacturers] was chosen over a few other proponents that responded to the RFP. CRM has an outstanding reputation within the industry, Mr. Speaker, and we appreciate the economic . . . Over $10 million of investment by this particular company and employment of dozens — dozens, if not 15 or 20 — employment benefits that they bring to the community of Moose Jaw, Mr. Speaker…”
Conway: “… Mr. Speaker, people deserve answers about how this deal went down, and my question was about the business case for breaking this up between a southern and northern region. We haven’t heard anything about that, especially when they see a former Sask Party Finance minister registered to lobby for the California-based company that got the contract. The lobbyist registry shows that Kevin Doherty started lobbying for that company back in 2022, right at the same time that this out-of-country company got the contract.Why did the Sask Party make the changes that led to that decision? And what role did Mr. Doherty play in pulling the strings?”
Tell: “Mr. Speaker, those members opposite and their crackerjack researchers over there. Tire stewardship 2022 annual report, it’s all hidden in an annual report: ‘TSS Board of Directors approved a motion to proceed with negotiating a contract with CRM as the southern processor for the province on June 6th, 2022.’ Now . . . [inaudible interjection] . . . I’m actually not talking to you. Mr. Doherty was not hired by CRM until November 2022.”
That answer seemed to stun Conway, who went on to note “there are so many unanswered questions about this deal.” Tell replied that “the member opposite just has it completely wrong.”
“There are two RFP processes — one for southern, one for northern. The southern one is what you are talking about right now. It went through an RFP process. The proponent who responded to that RFP was chosen through Tire Stewardship of Saskatchewan. The Government of Saskatchewan had no involvement in that particular . . . in choosing the proponent. Obviously the economics made sense, the investment that was provided to the city of Moose Jaw and surrounding area and the jobs in southern Saskatchewan, Mr. Speaker. The process, you say one minute, go to RFP; don’t use the RFP and that there’s something wrong with it. We’ve had enough of you.”
Conway went on to ask what the business case was for the decision to post the two RFPs. Tell replied that the decisions made by TSS “are exactly that, Mr. Speaker. They are the ones that decided how to split, how to divide up the province, that it was obviously something that that industry-led board decided to do, Mr. Speaker.
“And I don’t know what the member is getting at, but Mr. Doherty was not hired by CRM until November ’22 — six, a couple of months later. Couple of months earlier, that’s when they were awarded the contract, Mr. Speaker. It’s absolutely ridiculous what’s going on over there.”
Details of annual report
Regarding the 2022 annual report from Tire Stewardship of Saskatchewan that Tell was referring to, it did refer to the RFP process and seems to corroborate her claim that the RFP was awarded before Doherty signed on as lobbyist for CRM in November of 2022:
“In 2021 due to multiple expressions of interest from parties wanting to become scrap tire processors, TSS issued a Request for Proposals (RFP) for minimally/non-competing value-added processing, recognizing the interests of the existing processor. The preferred processor, CRM, was prepared to bring new investment to Saskatchewan, locate in southern Saskatchewan, produce higher value products for their markets in both Canada and the US, and for lower incentive fees.
“TSS Board of Director’s approved a motion to proceed with negotiating a contract with CRM as a southern processor for the province on June 6, 2022. Then TSS engaged in contract discussions to address the needs of the PSP including a payment model based on outbound material. TSS negotiated an agreement with CRM based on an increased level of financial/sales transparency, the sales-based incentive payment model, and for lower incentive fees for non-value-added material such as TDA/shred. Financial efficiencies generated by this second processor will free up funds for improving recycling rates and dealing with legacy tires. Cleaning up legacy tires could also minimize any volume impact to the existing processor. The contract aligns with the goals of the PSP.”
Minister Tell response
In an interview with SASKTODAY.ca, Minister Tell clarified there were two processors for tire processing in the province, one in the north and one in the south. Tell said TSS had issued an RFP for the southern region, and said “there were lots of expressions of interest to the RFP, but there were only two formal bids on that RFP for the southern processor.”
Tell said TSS have confirmed only two bidders applied to the RFP. “The only thing I know is neither of them were from Saskatchewan,” she said.
Tell also said the RFP was done through the TSS board, “which is a retailer and industry representative board.”
“They operate independent of government,” said Tell, who said the province’s role is responsibility for the product stewardship program. “Our job is oversight of the PSP — product stewardship program. So that’s really the regulations and policies that are followed by TSS.”
As for the tender process, “if they want to issue an RFP and they did for the southern processor, that is up to them and they put it out there publicly and put the tenders out, and they have people respond.”
Tell also reiterated in speaking to SASKTODAY.ca that “I have not met with Kevin Doherty at all… No lobbying, no discussion occurred with Kevin Doherty.”
