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Saskatchewan tire recycler sues provincial government for  million
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Saskatchewan tire recycler sues provincial government for $10 million

A Saskatoon, Saskatchewan. A rubber manufacturer is taking the province to court and seeking millions of dollars in damages for breach of contract in a dispute that has lasted more than two years.

In a lawsuit filed in the Court of King’s Bench last Friday, Shercom Industries is seeking at least $10 million in damages against the Saskatchewan government, Tire Stewardship of Saskatchewan (TSS), a non-profit provincial regulatory agency. lucrative, and its president and CEO, Stevyn. Arnt.

The statement of claim contends that Shercom was unfairly excluded from a request for proposals to award a second tire recycler in Saskatchewan, and contends that negotiations were “predetermined and locked into the award” of services to a U.S.-based company. United.

The lawsuit also seeks damages against Arnt for a series of claims and comments he allegedly made over the past two years, which Shercom claims are false statements that caused economic damage intended to shut down the ‘business.

“Shercom further states that by slandering Shercom, excluding it from a tire processing contract and depriving it of processed used tires from Saskatchewan, Stevyn Arnt and/or TSS intended to cause harm maximum to Shercom and put it into bankruptcy,” the ministry said. reads the lawsuit.

“At all times, TSS behaved in an arrogant, authoritarian and shocking manner, indifferent to the economic harm it caused to Shercom.”

Shercom began operations just north of Saskatoon in 1993 and for years was the province’s only scrap tire recycler, responsible for recycling all scrap tires purchased in Saskatchewan.

In 2016, a fire nearly destroyed two Shercom buildings and left the company with a choice between moving to another province or investing more than $10 million to rebuild its factory. Months of negotiations with the province followed before Shercom finally built a new recycling plant in 2017.

In 2021, TSS, which is overseen by the Ministry of Environment and oversees the province’s tire recycling program, issued a tender to find a second tire recycler in Saskatchewan, preferably in southern Saskatchewan. the province. The RFP reportedly indicated that it was looking for a “second processor” and not a “second location.” Shercom therefore thought it would be excluded from the process, according to the lawsuit.

Shercom opposed the creation of a second tire recycler because it said the province does not produce enough tires to require one, as well as collection areas that Shercom said “harm the ability of the free market to determine who collects used tires,” according to the statement.

The TSS ultimately awarded American company Crumb Rubber Manufacturers Co. (CRM) the role of second processor in December 2022, after assuring the province that a new facility would open in Moose Jaw to handle the southern part of the province, according to the suit.

After losing about 40 percent of market share last spring, Shercom said it laid off more than 60 workers after months of negotiations with TSS failed and its recycling plant closed.

Once the dispute with TSS was made public, Arnt said, “I think what you see unfolding is a company upset that it lost its monopoly,” in a May 2023 interview with CTV News .

In the lawsuit, Shercom claims it never controlled the supply of recycled tires or the price of maintenance and said there were no restrictions preventing another company from applying for a license. However, guaranteeing CRM a “minimum tire supply” created a regional monopoly.

Later that year, Shercom joined the Emterra Group to bid in a new tender for a plant in the North. Shercom argues the bid was rejected because CRM was going to build a facility in Saskatoon in 2025 while its rebuilt facilities remain unused.

The suit further contends that CRM never opened a “state-of-the-art facility” in Moose Jaw as it had promised and instead operates a shredder with one-third the capacity of Shercom’s shredder to reduce the size of the rubber and ship it out of the province. Another party claims that CRM does not produce crumb rubber or products such as rubber pavers, curb ramps or many other varieties of rubber that Shercom used to create.

It also says TSS has begun storing used tires near Clavet as it works to bring its two plants to full capacity, which Shercom says presents “an environmental disaster waiting to happen.”

None of these claims have been proven in court.

Last month, Shercom announced it would lay off an additional 79 employees on December 2.

In an email, the province said it was unaware of Shercom’s legal action.

Arnt said he had been served with the lawsuit but would not comment while the matter was before the court.