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  • How to make NAFTA sustainable, equitable July 19, 2017
    Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […]
    Canadian Centre for Policy Alternatives
  • What’s next for BC? July 4, 2017
    Five weeks ago the CCPA-BC began a letter to our supporters with this statement: “What an interesting and exciting moment in BC politics! For a bunch of policy nerds like us at the CCPA, it doesn’t get much better than this.” At the time, we were writing about the just-announced agreement between the BC NDP […]
    Canadian Centre for Policy Alternatives
  • Could skyrocketing private sector debt spell economic crisis? June 21, 2017
    Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector […]
    Canadian Centre for Policy Alternatives
  • The energy industry’s insatiable thirst for water threatens First Nations’ treaty-protected rights June 21, 2017
    Our latest report looks at the growing concerns that First Nations in British Columbia have with the fossil fuel industry’s increasing need for large volumes of water for natural gas fracking operations. Titled Fracking, First Nations and Water: Respecting Indigenous rights and better protecting our shared resources, it describes what steps should be taken to […]
    Canadian Centre for Policy Alternatives
  • Betting on Bitumen: Alberta's energy policies from Lougheed to Klein June 8, 2017
    The role of government in Alberta, both involvement and funding, has been critical in ensuring that more than narrow corporate interests were served in the development of the province’s bitumen resources.  A new report contrasts the approaches taken by two former premiers during the industry’s early development and rapid expansion periods.  The Lougheed government invested […]
    Canadian Centre for Policy Alternatives
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Agrium Halves Potash Royalties

Agrium reports that it paid half as much to the people of Saskatchewan in the second quarter as it had in the same quarter of last year. The company’s quarterly “potash profit and capital tax” payment dropped to $8 million from $15 million a year ago.

Agrium’s only potash mine is in Saskatchewan. The value of its potash sales has barely changed: $246 million in the second quarter compared to $259 million a year ago. As a percentage of sales, “potash profit and capital tax” fell to just 3% from 6%.

Agrium notes “a reduction in potash profit tax in 2012 due to deductions from the taxable base for investment related to our Vanscoy expansion project.” That refers to the Saskatchewan government allowing potash companies to immediately write off 120% of investment from profits before paying any potash production tax on them.

Given that Saskatchewan’s resource surcharge (“capital tax”) is 3% of sales and Agrium paid only that amount, the implication is that it paid (almost) no potash production tax. The company also pays Crown royalties, which might bring the province’s total return up to 5% or 6%.

The provincial government should collect a better return for the people of Saskatchewan, who own the resource. In particular, why are we allowing potash companies to write off more than 100% of the amount they actually invest?

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