January 13, 2005
For immediate release
Government Releases Auditor General’s Report on Polar Foods International
In the report, the Auditor General recognizes that government had little choice but to support Polar Foods because of its importance to the seafood processing industry in the province. In 2003, exports of processed lobster were worth $200 million to the provincial economy, $149 million of that in sales outside Canada.
“Clearly, this is an industry that contributes significantly to the economy of this province,” said Minister Currie. “Our support of this industry has always been based on it’s importance to PEI and, in particular, to our rural communities.”
Though the report says that government lost money on Polar Foods, Minister Currie said much was also gained. “We kept people employed in rural areas and we kept our lobster processing industry here in the province. If we had not stepped up, we would have lost that industry and we never would have gotten it back.”
Before the companies amalgamated to form Polar Foods International, they employed approximately 600 people. That rose to approximately 1000 people with an annual payroll of $13.5 million after amalgamation.
The Auditor General’s report recommends a number of changes to government’s accounting and record keeping procedures. Government will act on all of the recommendations.
“We recognize that there were problems with process on this file and we will work to correct those problems,” said Minister Murphy.
The report also recommends a further audit of the activities of the Polar Foods International from May 2003 to February 2004. As with all other recommendations, government will comply. The Auditor General’s office will carry out the second audit and it will be made public when it is completed.
“The Auditor General feels there is a need for a deeper understanding of the company’s dealings at that time,” said Minister Murphy. “Therefore Executive Council has authorized the Auditor General to proceed.”