Newfoundland's tire recycling program was shut down, only three months after it was set up by the provincial government.
Environment Minister Kevin Aylward pulled the plug on the program after he received a letter from Municipal Recyclers Ltd. saying the private company couldn't handle the job.
The plan was to prevent tire dealers and motorists from dumping old tires in landfill sites. But the recycling program, which includes a new tax on tires, was plagued from the start by complaints there was nowhere to store old tires before they could be shredded and recycled.
Faced with the prospect of building storage sites across the province, company president Harry Spurrell decided instead to pull out of the deal.
About 500,000 tires are left in dumps every year in Newfoundland and Labrador.
Shortly after Spurrell's company was awarded the contract, reports emerged that one of his other companies is facing a charge of defrauding the Atlantic Canada Opportunities Agency.
The company is accused of defrauding ACOA of more than $200,000 in the early 1990s.
During that time, ACOA gave Municipal Recyclers $1.3 million in grants under two fishery readjustment programs. Spurrell has pleaded not guilty to the charge. Canada News
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