If there is a silver lining in what was the MagCan debacle it is the lessons learned by the Alberta government.
It was an expensive lesson for the Alberta government as then Premier Don Getty committed $103 million in loan guarantees for the project which cost more than $200 million.
MagCan was expected to revolutionize the magnesium processing industry and provide a substantial economic boon to not only the Foothills, but also Alberta and perhaps the country.
However, Alberta did not get much return on its investment as MagCan closed in 1991 — less than a year after the processing plant came on line.
For the last 20 years the 400-acre Saddlebrook Industrial Park site has remained vacant save for a couple of short-lived business ventures.
MagCan was expected to be the anchor tenant in the Highway 2A industrial corridor and kickstart an unprecedented time of economic prosperity in the Foothills.
The first phase of the plant alone employed 145 people and provided the MD of Foothills with $750,000 in annual tax revenue. At build out MagCan was to include five phases and the economic spin-offs would have been incredible.
The failure of MagCan was devastating to the Foothills region, but the implications were felt just as deeply in Edmonton as it could well be described as the straw that broke Getty’s back.
Faced with an economic slowdown and struggling energy prices Getty’s Progressive Conservative government tossed money at the business sector in an effort to attract new industry and prop up struggling corporations. However, poor investments and boondoggles such as MagCan eroded support for the Tory party and left Alberta with an $11 billion deficit.
As a result, Getty resigned as premier in 1992 and he was replaced by Ralph Klein who immediately changed provincial government policy in regards to its involvement in the commercial sector.
It brought about Klein’s renowned stance that Alberta would no longer be in the business of being in business.
MagCan was clearly an example of what can go wrong when government money is invested in a commercial venture. No one takes accountability on how taxpayer dollars are spent.
There have been rumours about how spending at the magnesium plant was out of control from renting bars of soap for the bathrooms to gargantuan cost overruns as they desperately tried to address faulty technology used in the magnesium processing plant.
Getty cannot be blamed for the failure of MagCan, but he took a risk and it was a risk the provincial government should have avoided 20 years ago and should continue to avoid into the future.
If MagCan has to sit empty for another 20 years as a stark reminder to the province of the consequences of it risking taxpayer money on a business venture so be it. At least Alberta’s largest birdhouse will have some use.
Incidentally, TransCanada currently owns the site and has approvals in place to build a 350-watt powerplant at a cost of $500 million — if TransCanada proceeds the project will be built without government funding.
