By Sarah Mills

Saskatchewan losing out on billions in potash royalties: Mintz report

Jan 7, 2015 | 3:47 PM

Saskatchewan’s potash royalty structure needs an overhaul and is described as “alarmingly inefficient and uncompetitive” in a new report.
 
Authored by Jack Mintz, professor at The University of Calgary’s School of Public Policy, the report states when compared with international markets, Saskatchewan’s potash-tax regime is “not only the most complex and inefficient, it is also the least competitive.”

 
This isn’t the first time Mintz has criticized Saskatchewan’s approach and argues there is a lot of incentive to change when you produce 30 per cent of the world’s production.
 
Mintz says Saskatchewan nor New Brunswick “needs to endure such a muddled and counter-productive approach to potash taxations” that since 2009 have cost our province $2.4 billion in revenues.
 
He argues simple solutions would improve things and Mintz suggests moving to a rent-based royalty regime that ultimately taxes what’s left over once capital spending and operational costs have been deducted.
 
It is a similar system adopted for Alberta’s oilsands and in the B.C. mining sector and Mintz maintains it isn’t a disincentive.
 
The government has gone over the Mintz report and disputes the calculations used.
 
In earlier reponse to Mintz’s criticism Premier Brad Wall has said, “of all of the jurisdictions in the world that have potash…I don’t [know] where there’s one that is welcoming about $12 billion in expansion, thousands of construction jobs, hundreds of new jobs to come and so, while there obviously are anomalies within the system, it seems to be working pretty good for the province’s economy.”
 
The government they aren’t prepared to move the goalposts halfway through the potash game.

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