Cash crunch has P.E.I. looking for beef plant buyer
The only federally inspected beef plant in the Maritimes is still losing hundreds of thousands of dollars a month, prompting the P.E.I. government to look for a private buyer.
Atlantic Beef Products, jointly owned by the province and beef producers, opened in December 2004 in Albany, P.E.I., and has never turned a profit. It has racked up a loss of $30 million, and is burning through $200,000 to $300,000 a month.
Agriculture Minister George Webster told CBC News on Wednesday there's no end in sight to those losses.
"We still have enough revenue stream to sustain the plant for another three to five months, but when that money's burned through, then we are going to have a major challenge at that point in time," said Webster.
Webster said government is in contact with a dozen private investors, to see if anyone wants to buy the plant.
Opposition worries over closure
The only way the plant will make money is if it finds a niche market, said Webster.
A $12-million infusion of cash from the Maritime provinces and the Atlantic Canada Opportunities Agency a year and a half ago was supposed to help with that. Half of that money was from ACOA, but it was never delivered. The federal funding agency changed the money from a grant to a loan, and Webster said no one wanted that kind of liability, so the loan was never accepted.
The talk of cash shortages and deadlines has agriculture critic Jim Bagnall worried.
"Right now I'm nervous because if you go back in history, that's what they floated out when they wanted to close the pork plant," said Bagnall.
"They threw out numbers and said if they don't have things fixed within 90 days, at that time, that they were going to close it down."
The P.E.I. government closed down the pork plant in March 2008.
Despite the significant monthly losses at the beef plant, Bagnall doesn't think government should pull the plug. He said if the plant is closed, that will shut down the livestock industry on P.E.I. as well.