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  • Imagine a Winnipeg...2018 Alternative Municipal Budget June 18, 2018
    Climate change; stagnant global economic growth; political polarization; growing inequality.  Our city finds itself dealing with all these issues, and more at once. The 2018 Alternative Municipal Budget (AMB) is a community response that shows how the city can deal with all these issues and balance the budget.
    Canadian Centre for Policy Alternatives
  • Why would a boom town need charity? Inequities in Saskatchewan’s oil boom and bust May 23, 2018
    When we think of a “boomtown,” we often imagine a formerly sleepy rural town suddenly awash in wealth and economic expansion. It might surprise some to learn that for many municipalities in oil-producing regions in Saskatchewan, the costs of servicing the oil boom can outweigh the benefits. A Prairie Patchwork: Reliance on Oil Industry Philanthropy […]
    Canadian Centre for Policy Alternatives
  • CCPA's National Office has moved! May 11, 2018
      The week of May 1st, the Canadian Centre for Policy Alternatives' National Office moved to 141 Laurier Ave W, Suite 1000, Ottawa ON, K1P 5J2. Please note that our phone, fax and general e-mail will remain the same: Telephone: 613-563-1341 | Fax: 613-233-1458 | Email: ccpa@policyalternatives.ca  
    Canadian Centre for Policy Alternatives
  • What are Canada’s energy options in a carbon-constrained world? May 1, 2018
    Canada faces some very difficult choices in maintaining energy security while meeting emissions reduction targets.  A new study by veteran earth scientist David Hughes—published through the Corporate Mapping Project, the Canadian Centre for Policy Alternatives and the Parkland Institute—is a comprehensive assessment of Canada’s energy systems in light of the need to maintain energy security and […]
    Canadian Centre for Policy Alternatives
  • The 2018 Living Wage for Metro Vancouver April 25, 2018
    The cost of raising a family in British Columbia increased slightly from 2017 to 2018. A $20.91 hourly wage is needed to cover the costs of raising a family in Metro Vancouver, up from $20.61 per hour in 2017 due to soaring housing costs. This is the hourly wage that two working parents with two young children […]
    Canadian Centre for Policy Alternatives
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Sask Party Shills for PotashCorp

Yesterday’s strong earnings report from the Potash Corporation of Saskatchewan confirms what this blog and the NDP have been contending: even modestly increasing Saskatchewan’s extremely low royalties on hugely profitable potash mines could fund substantially better provincial public services.

The Saskatchewan Party still refuses to review potash royalties. In a well-timed column, Greg Fingas developed the theme that this gift to potash companies is the provincial election’s most expensive promise.

The Sask Party issued a carefully-worded press release implying that PotashCorp invested $590 million in Saskatchewan and paid nearly $332 million to the provincial government in the third quarter of 2011. Both suggestions are misleading.

While some commentators wrote that PotashCorp reinvested $590 million in Saskatchewan, the Sask Party itself stopped short of making that claim since this figure is a worldwide total. The company reports only that “the majority of the $590 million in capital expenditures” were in potash rather than nitrogen or phosphate.

The Sask Party compares this figure to $700 million of potash gross margin, at least 90% of which is from Saskatchewan as opposed to New Brunswick. If two-thirds of PotashCorp’s investment was in Saskatchewan potash mines, it reinvested something like 63% of its gross margin (i.e. $590*0.67/($700*0.9)), a far cry from the 84% put forward by the Sask Party. In contrast, 100% of every dollar in additional royalties would be reinvested in the province.

The Sask Party went on to claim, “PotashCorp paid another $332 million in potash royalties and income taxes in the third quarter – the vast majority of which would have been paid in Saskatchewan.” This figure is the sum of “provincial mining and other taxes” ($53 million) and “income taxes” ($279 million). The $53 million is Saskatchewan’s potash production tax and resource surcharge.

The $279 million is worldwide corporate income tax, more of which goes to the Canadian federal government than to provincial governments. (Note that the Sask Party wrote “paid in Saskatchewan” not “paid to Saskatchewan.”)

PotashCorp has confirmed that it paid only $82 million of corporate tax to the Saskatchewan government throughout 2010, less than it paid to Trinidad. Saskatchewan people should get a better return.

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