The first project up for funding under the federal Slaughter Improvement Program will be a new beef processing facility next to the producer-owned Levinoff-Colbex beef packing plant in central Quebec.
The packer has been “conditionally approved” for the federal loan of $9.6 million to build the new facility next to the company’s slaughterhouse at St-Cyrille-de-Wendover, just northeast of Drummondville.
However, the government said Tuesday, the loan is contingent on Levinoff-Colbex completing a “significant financial restructure.”
Levinoff-Colbex slaughters and processes 150,000 cull cattle per year, acting as the “only significant” slaughter plant for cull cows for producers in Quebec, Atlantic Canada and Ontario, the government said.
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The government noted that its new loan is in addition to a $10 million loan already granted by Farm Credit Canada to the farmer owners of Levinoff-Colbex, in order to finance part of their initial investment.
Colbex changed hands in 2006 when Quebec’s cattle producers put up $50 million to buy an 80 per cent stake, which they later increased to full ownership by buying out the Cola family’s 20 per cent stake for $12.5 million. The 80 per cent stake was funded by a $20-per-head checkoff on cull animals.
Quebec’s cattle producers’ federation in April last year voted to put up another $30 million to help cover the Colbex plant’s debts, through a checkoff of $53.86 per marketed animal.
The facility had previously been the focus of a blockade by cattle producers in 2004, who after making a deal for control of the plant began paying 42 per cents per pound for cattle delivered there.
“It’s imperative that Quebec farmers and, indeed, farmers throughout Eastern Canada have access to slaughter facilities,” Quebec MP Jean-Pierre Blackburn, the federal minister of state for agriculture, said in the government’s release.
“I’m proud that the government of Canada is again supporting Colbex, and I thank Colbex for making the commitment to restructure its finances to make this happen.”
An upstart cattle producers’ group this summer began urging the Quebec government to investigate the Colbex plant’s finances, saying it has been running into the red for the past three years, and in that time has not operated at more than 60 per cent of its capacity.
