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, its spokesman argues that the province of Saskatchewan is not comparable to the country of Trinidad. He has a point: most Canadian corporate taxes flow to the federal government as opposed to provincial governments. That fact underscores the need for higher provincial royalties to collect a fair return on potash, a provincially-owned resource.
On royalties, todayâ€™s StarPhoenix also includes a letter from Randy Nelson pointing out that Norwayâ€™s high oil royalties have not chased offshore platforms out of the North Sea. Meanwhile, PotashCorp reported paying 2010 royalties of only $73 per Saskatchewan resident ($76.5 million/1.05 million people).
Maybe Randy and I should stop being so hard on the company. After all, its latest proxy circular (page 41) indicates that life is already getting pretty rough: â€œWe revised our perquisites program to no longer provide country club memberships for executives beginning in 2011.â€
UPDATE (March 5): The Queen City delivers!