Listen to daily commentary from provincial news director Sarah Mills
Sarah Mills breaks down some traffic woes in today's commentary, and says she's not shy about using the horn when people...
The Saskatchewan NDP are calling for a review on potash royalties because the government could be missing out on valuable revenue.
According to a report from the Johnson Shoyama Graduate School of Public Policy, the government of Saskatchewan could be missing out on $40 million to $100 million per year in revenue.
The report says that’s because the current tax rates since 2009-10 have averaged around 6.9 per cent; that’s lower than the 9.5 per cent average in the early 2000s and 8.1 per cent in the 1990s.
NDP Leader Ryan Meili called for a review on potash royalties because of how much the industry has changed in the past decade.
“We’ve got now the merger of Agrium and PCS (Potash Corporation of Saskatchewan) into Nutrien, we’ve got new marketing and we’ve got new financial pressures on the province,” Meili said Monday morning at the Saskatchewan legislature.
The current government has shown a willingness to cut health care, education and programs like the STC instead of doing a review, he said.
According to the report, potash remains a major part of Saskatchewan’s economy, with 2017 exports of the product reaching over $5 million. Saskatchewan produced nearly 30 per cent of the world’s supply in 2017.
Two of the main areas highlighted in the report are tax exemptions for any new production in excess of the 2001-02 base and the 120 per cent allowance provided for new capital expenditures.
Meili believes a fair review needs to be done to ensure the industry’s benefits are being maximized.
“How do you find the balance between maintaining the continued investment, continued employment but also making sure you’re getting a fair return on what is a resource that belongs to the people of Saskatchewan,” Meili said.
He added if the NDP were to do a review, it would work with experts to determine what the best balance is.
Finance Critic Trent Wotherspoon said the government said it was going to do a royalty review in 2015 but that never happened.
“They backed away from it. This is a very important industry to the province. It’s important to take stock and ultimately ensure its strength and stability for decades to come,” Wotherspoon said.
Meili said he would be suspect about a review done by the Saskatchewan Party and the fairness of it.
Sask. Party says royalty system brought in $20 billion in new investment
In a statement by Minister of Energy and Resources Bronwyn Eyre, the province said the current royalty rules has brought in $20 billion in expansions and new mine construction in the province.
The statement read Saskatchewan has the highest royalty and potash profit tax structure which collects the most revenue in the world.
She said raising the royalty rates in Israel contributed to a dramatic decrease in capital investment and a similar increase in New Brunswick lead to a complete industry shutdown.
Eyre stressed stability is important as the industry rebounds from a period of weak prices and volatility.
