Sask. govt to settle lawsuit with Shercom Industries with $4.8 million payment

Saskatoon’s Shercom Industries will be receiving a settlement payment of $4.8 million from the Province of Saskatchewan.

The settlement puts an end to the lawsuit Shercom filed against the Saskatchewan Government in 2024, seeking $10 million in damages as well as further punitive and/or exemplary damages against the Tire Stewardship of Saskatchewan and its CEO, Stevyn Art.

According to a provincial government statement, “Shercom Industries accepts this payment in full and final satisfaction of its claims and acknowledges that it will have no further claims related to any matters raised in the lawsuit.”

Read more:

• Shercom questions its future in Saskatchewan after tire recycling
• Saskatoon’s Shercom Industries to lay off 79 employees in December
• Sask. company shuts down tire processing operation after contract goes to U.S. firm

The government’s statement said this settlement is “not an admission of liability by the Government of Saskatchewan nor any of the defendants in this case but is believed to be in the best interests of Saskatchewan residents and the tire recycling industry.

“All other details of this settlement are considered confidential,” the statement from the government read.

In November 2024, Saskatoon’s Shercom Industries filed a statement of claim against the Province of Saskatchewan, the TSS and Arnt, alleging breach of contract and “injurious falsehoods.”

The Tire Stewardship of Saskatchewan (TSS) is a non-profit organization that oversees all scrap tire processing in Saskatchewan.

The lawsuit alleged the province failed to honour a commitment to Shercom for a long-term contract, assurance of tire supply, and a voice in the future of the industry after a fire occurred at the facility in 2016 and a $10 million investment was subsequently made to re-build a state-of-the-art business where scrap tire recycling could take place.

“Up until Shercom’s contract was effectively cancelled by TSS,” the claim read, “it was recycling approximately $50 million pounds of used tires per year at its facilities north of Saskatoon.”

At its peak, the company employed between 140 and 150 workers. Initially, about 40 of the company’s 140 employees were laid off in 2020, and another 79 were scheduled to be laid off on December 2 after a notice was sent to the labour minister late October 2024.

At present, Shane Olson, president of Shercom, confirmed there are 92 employees at the company.

“I would simply say that Shercom is relieved that this matter is finally at end and we’re prepared to move on,” said Olson, though he would not specify what “moving on” means for the company.

Shercom’s contract with the Tire Stewardship of Saskatchewan (TSS) ended on April 30, 2023. The company was negotiating to extend the contract in good faith, according to Olson.

However, at that time, Olson said the TSS — which operates under a Ministry of Environment-approved product stewardship program and oversees tire recycling and processing in the province — was canvassing an American company.

The province had promised 40 to 100 per cent of Saskatchewan tires to Crumb Rubber Manufacturers (CRM), a California-based company. CRM was expected to set up shop in Moose Jaw.

Shercom continued its manufacturing operations, but had to do so by sourcing its crumb rubber from processors in Alberta. The company could no longer accept or process used Saskatchewan tires, which would instead be shipped out of the province.

Read more:

• Shercom Industries sues provincial government, TSS for $10 million
• Saskatoon’s Shercom Industries to lay off 79 employees in December
• Sask. company shuts down tire processing operation after contract goes to U.S. firm

– with files from 650 CKOM’s Lara Fominoff and Libby Gray