The Progressive Economics Forum

I had the following comments in yesterday’s front-page story on Vale’s decision to postpone its proposed $3-billion potash mine at Kronau, Saskatchewan: Regina economist Erin Weir, who is widely expected to run for the leadership of the provincial NDP, said in a statement Friday that the Vale announcement “represents a failure of the Saskatchewan government’s [...]

Saskatchewan’s Ministry of Energy and Resources has released its 2011-12 Annual Report. The potash table (page 36) incredibly shows “Royalty/Tax” revenue of only $62.5 million in 2010-11 and $38.4 million in 2011-12. These figures amount to just 1.2% and 0.6% respectively of the value of potash sales. I have long argued that Saskatchewan’s 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 [...]

Today’s Mosaic quarterly report provides further evidence that the Government of Saskatchewan should improve its royalty and tax structure to collect a better return on the province’s non-renewable resources like potash. Quarterly Comparison Despite higher potash prices, Mosaic paid lower royalties and resource taxes to Saskatchewan last quarter than in the same quarter of last [...]

I have the following letter in today’s Prince Albert Daily Herald (page 4): Reinvest Resource Wealth in Saskatchewan To the editor: I strongly agree with the title of MP Randy Hoback’s letter: “Siphoning money out of the west is wrong” (June 9). My proposal is to keep more money in Saskatchewan by collecting more provincial [...]

Saskatchewan’s Minister of Energy and Resources replied to my op-ed and letter on Dutch disease and resource royalties. On Friday, he was promoted to Minister of Everything. Columnist Murray Mandryk wrote, “Given the amount of power Bill Boyd now has in his super-economy portfolio, he may be one fluffy Persian cat and remote desert island [...]

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 [...]