P.E.I. to take over regional hog plant
The owners of Prince Edward Island's hog processing plant announced they would be closing it down Thursday, but the province, a heavy creditor of the plant, is saying it will operate it under a receiver.
Provincial Treasurer West Sheridan told CBC News that the province has no intention of operating the plant for very long. If a private company cannot be found to take it over, operations will be wound down.
The news has implications beyond P.E.I. Farmers from Nova Scotia and New Brunswick also use the plant, and several hundred hogs a week are shipped in for slaughter from Quebec.
Thursday'sannouncement follows years of financial difficulty, and what has been described as a crisis in the hog industry. Many producershave goneout of business in recent months, either by choice or forced out by debt.
Many were expecting an announcement of more government money for the plant, but instead it pulled the plug.
The government last put in money in October, a short-term loan of $200,000. At the time, plant ownerNatural Organic Food Group saidit was expecting an investment from a securities company that would stabilize the company's finances.
Provincial Treasurer Wes Sheridan had said if the company could not sort out its finances, the province would have a difficult decision to make.
The company recently returned to the province asking for a $2-million operating loan. At the news conference, the government explained it was not willing to lend any more money to the plant for operating expenses.
The government currently has invested about $6 million in operating loans in the plant.
The government statement was followed by Scott Dingwall, one of four P.E.I. farmers who holds shares in the plant. Dingwall said that in light of the government's decision, the plant would be shutting down.
But following the news conference government officials reached by CBC News said the province would continue operating the plant under a receiver. It will officially be in receivership at 5 p.m. AT Thursday.