The Progressive Economics Forum

Statistics Canada reported today that the economy shrank in February, driven by declines in resource extraction and manufacturing. Oil and gas extraction as well as hard-rock mining decreased due to temporary shutdowns. However, the most dramatic decline was in potash production, down 19% due to mine closures in Saskatchewan. The provincial government, which is budgeting [...]

Saskatchewan’s newspapers reported today that BHP Billiton intends to sell the province’s potash outside of Canpotex, the marketing board that helps to maximize the price for which Saskatchewan potash is exported offshore. BHP executive Tim Cutt stated, “We will not market through Canpotex. We talked to the premier (Brad Wall) about that. He understands that.” [...]

Advocates of low potash royalties are claiming that New Democrats fared poorly in Saskatchewan’s recent election because they proposed higher potash royalties. Of course, potash companies and their boosters would like the NDP to give up this cause. Doing so would be a political mistake for the party and a disservice to the people of Saskatchewan. Most [...]

PotashCorp CEO Bill Doyle waded into Saskatchewan’s election campaign on Friday with an op-ed in the province’s two largest newspapers. It was accompanied by a paid advertisement from PotashCorp in Saskatoon’s StarPhoenix. The company got some free advertising in Regina’s Leader-Post through Bruce Johnstone’s column, which repeated Doyle’s op-ed. The Saskatchewan Party is parroting the [...]

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 [...]

Regarding the NDP platform’s reliance on additional potash revenue, columnist Murray Mandryk asks, “What if potash tanks as it did in 2009?” Of course, budgets are necessarily based on assumptions about future commodity prices. Saskatchewan Finance estimates that each dollar of change in the price of oil alters provincial revenues by $20 million (page 35). [...]

Saskatchewan’s two major parties have unveiled their election platforms. The NDP’s fiscal plan is to collect higher potash royalties and reinvest the proceeds in public priorities like healthcare, education and housing. Columnist Murray Mandryk notes the spectre of Erin Weir. The NDP has expressed a willingness to discuss sharing resource revenues with First Nations. The [...]

The Saskatchewan NDP is proposing to collect higher potash royalties and save a portion of the proceeds in a new Bright Futures Fund. The NDP has also expressed its willingness to negotiate with First Nations about the possibility of resource revenue sharing. The right-wing Saskatchewan Party strangely claims that the NDP’s plan “would plunge the province [...]

I do not think anyone can disagree with the conclusion of Murray Fulton and Ken Rasmussen that Saskatchewan should “proceed with a thoughtful and deliberate process that ensures that the province is the long-term beneficiary of this asset.” The provincial opposition is advocating a royalty review process to achieve that goal. The government and potash [...]

Advocates of low potash royalties have floated some pretty bizarre arguments. Last week, the Saskatchewan Party put out a news release emphasizing that local farmers use some 0.6% of provincial potash output, as though this tiny sliver of domestic consumption somehow complicates the province’s interest in maximizing revenue as a potash producer. Equally strange are [...]

In a couple of recent posts, I threw down the gauntlet for PotashCorp to disclose how much corporate income tax and Crown royalties it paid to the Government of Saskatchewan. As Bruce Johnstone reports, it has finally done so: While PotashCorp paid $77 million in resource surcharges in 2010, it also paid $82 million in [...]

Today’s Saskatoon StarPhoenix and Regina Leader-Post cover my recent analysis of PotashCorp’s annual report. I suggested that the company may be paying less corporate income tax to Saskatchewan than to Trinidad. PotashCorp could clear things up anytime by simply disclosing the amount of corporate tax it paid to the Saskatchewan government. Rather than doing so, [...]

Growing up in Saskatchewan, I never imagined myself blogging in praise of Rick Swenson. First, blogs did not exist then. Second, I generally disagreed with Swenson, a former cabinet minister in Grant Devine’s Progressive Conservative government. Swenson is back as leader of the provincial Progressive Conservative party, whose caucus quit to join with right-wing Liberals and [...]

Multinational corporations generally provide more detail to the US Security and Exchange Commission than in their Canadian annual reports. Thank goodness for American disclosure requirements. Along with its 2010 Annual Report, PotashCorp released its Annual Report on Form 10-K (a Security and Exchange Commission filing) on Friday afternoon. The following section is on pages 14 [...]

The Potash Corporation of Saskatchewan posted its 2010 annual report yesterday. It’s always worth taking a closer look at documents released on a Friday afternoon. Those interested in public revenues should see pages 109, 110 and 111. Note 19’s breakdown of “Provincial Mining and Other Taxes” confirms something that I had suspected. PotashCorp paid zero [...]

The comment pages of Saskatchewan’s newspapers have been abuzz with debate about potash royalties since my latest op-ed on the subject appeared in the Saskatoon StarPhoenix a couple of weeks ago. Two days later, political columnist Murray Mandryk made the case that the province should demand higher royalties rather than just accepting a few more jobs and [...]

This blog has long been critiquing Saskatchewan’s inadequate potash royalties. But every time I check the numbers, I am again shocked by how low they have fallen. In 2010, the Potash Corporation of Saskatchewan paid just a nickel in provincial royalties for every dollar of gross margin it made on potash. I have the following [...]

Saskatchewan’s NDP opposition recently called for higher potash royalties, a position long advocated by this blog. Not surprisingly, the Saskatchewan Party government and the potash companies have objected. The argument from Premier Brad Wall and PotashCorp CEO Bill Doyle seems to be that mine expansions are occurring in Saskatchewan only because of royalty concessions granted [...]

Who would have thought it. More than twenty years after the Canada-US FTA all but buried the economic nationalist legacy of the Trudeau era, a major foreign take-over seems to have been blocked. That’s twice under the Conservatives, after years of Liberal rubber stamping of foreign acquisitions under the Investment Canada Act. This is certainly [...]

On Thursday, Saskatchewan Premier Brad Wall said “No” to BHP: Do we want to add PotashCorp to that list of once-proud Canadian companies that are now under foreign control? . . . It’s our government’s belief that the people of Saskatchewan deserve nothing less than a potash industry unequivocally managed, operated and marketed for the [...]

The announcement this week that Prime Minister Stephen Harper is not going to intervene in the sale of Potash Corp. of Saskatchewan to the Australian conglomerate, BHP Billiton Ltd., speaks volumes about how Bay Street  and its servants in Ottawa are so willing and eager to sell off Canada’s corporate assets to foreign corporations. It’s [...]

A week ago, the Government of Saskatchewan released the Conference Board of Canada’s report on the possible Potash Corporation of Saskatchewan (PCS) takeover. It provides 77 pages of useful information, but is disappointingly thin on policy recommendations. The Conference Board downplays concerns about BHP leaving Canpotex after acquiring PCS. It argues that, with or without [...]

Murray Mandryk, CanWest’s seasoned Saskatchewan political columnist, has been writing some pretty sharp columns on potash. In particular, he questions excessively low resource royalties: . . . the messaging from Energy Minister Bill Boyd that his government wouldn’t touch oil royalty rates (even when it was selling at $150 a barrel), and the potash companies [...]

Concerns about the prospect of BHP Billiton leaving Canpotex have prompted a backlash of hand-wringing about Canpotex’s very existence. For example, The Globe and Mail featured an editorial earlier this month that began by suggesting, “Canadian policy-makers should reconsider the status of Canpotex.” But it concluded, “In practice, unwinding Canpotex would be no simple matter. [...]

Today, the Government of Saskatchewan announced that it is engaging the Conference Board of Canada to analyze the proposed Potash Corporation of Saskatchewan takeover. My first thought is to hope that the Conference Board does a better job on potash than it did on TILMA. My second thought is, “Doesn’t Saskatchewan have a civil service?” [...]

The Government of Saskatchewan wants nothing to do with a state (read China) corporation takeover of Potash Corp.  The Globe reports: “The Saskatchewan government signalled Wednesday that it is unlikely to support a takeover of the Saskatoon-based company by a sovereign wealth fund or other state-owned firm from China or other large potash-buying nation. The [...]

A key issue arising from the proposed potash takeover is BHP Billiton’s musing about leaving Canpotex, the agency that has long marketed Canadian potash offshore. (Growing up near the railroad tracks in Regina, Canpotex train cars were a familiar sight.) Perhaps BHP believes that it alone has sufficient clout to manage supply and negotiate overseas [...]

I have the following op-ed in today’s Regina Leader-Post. Below it is a table supporting my statement that “the mines that PCS owned in 1989 still account for 80 per cent of its potash production and capacity.” Privatizing Potash was a Costly Mistake The greatest tragedy in BHP Billiton’s $38.6-billion (U.S.) bid for the Potash [...]

Last week, I was in Halifax at USW’s Ontario-Atlantic district conference. It was a great conference in a great city. But having so many key people out of the office limited our response to BHP Billiton’s bid for the Potash Corporation of Saskatchewan. (Next time BHP launches a hostile takeover, it should better coordinate the [...]

Briarpatch printed my article, “Dirty Deeds Done Dirt Cheap: Saskatchewan’s Multi-billion Dollar Resource Giveaway,” in its December 2008 edition. The magazine’s editor has a knack for excellent rock-themed titles: my previous contribution on Saskatchewan’s business tax cuts was entitled “Money for Nothing, and the Sultans of Spin Get Their Tax Cuts for Free.” When I [...]