Saskatoon company, chamber demand answers and changes after tire recycling deal

Saskatchewan's environment minister says she will look at concerns raised by the CEO of the Saskatoon Chamber of Commerce and a Saskatoon company about a contract to recycle tires that was awarded in 2022.

The Saskatoon company, Shercom Industries, said Tuesday that "misinformation" continues to spread regarding a decision to award a contract for tire recycling to a California-based company. When asked what specific misinformation has been circulated, Shercom President and co-founder Shane Olson said "there has been a plethora."

Shercom Industries, a tire processor with more than 30 years of experience in Saskatoon, had solely handled tire recycling in Saskatchewan before Tire Stewardship Saskatchewan (TSS) decided to split that recycling into two contracts, one each for northern and southern Saskatchewan. TSS is a non-profit corporation established in 2017 that oversees tire recycling operations in the province, with oversight from the Ministry of Environment.

In late 2022, after a request for proposals (RFP) process, TSS signed a contract with California-based Crumb Rubber Manufacturers (CRM) to handle tire recycling in southern Saskatchewan out of a facility in Moose Jaw.

A separate RFP for the northern part of the province closed in January of 2024. The successful bid has not been announced, but Shercom did not bid.

Olson said there was no need or business case to split the province and that the model is doomed. He said B.C. and Manitoba only have one processor each, and that attempts in Saskatchewan to split operations between companies have ended in bankruptcies in the past.

"There's not any room for two processors," he said.

Olson said that during contract renewal negotiations at the end of 2020, Shercom told TSS it wanted three things: a voice in the future of the industry, assurance of tire supply and an increase in its tipping fee, which had not been increased since 2012. Instead of an increase in the tipping fee, TSS offered Shercom a 30 per cent decrease, Olson said.

TSS released a statement Tuesday afternoon acknowledging that it had been unable to come to a contract agreement with Shercom.

"Terms offered by TSS were unacceptable to Shercom, and conditions required by Shercom were unacceptable to TSS," the statement said.

Olson said the RFP for southern Saskatchewan "excluded" Shercom based on its language.

"We raised legitimate concerns with the TSS and with the ministry, and they basically shoved it through and had this contract signed behind closed doors."

TSS denied this accusation in its statement, calling its process "fair and transparent."

"It was never the intent of TSS to exclude Shercom from the RFP process, however it is the position of TSS that Shercom chose not to respond. Processors are not given exclusive 'rights' or 'entitlements' to scrap tire volumes and all contracts come up for renewal over time," it said.