Money lost to Sask. potash tax changes could cost jobs: industry group
The Saskatchewan potash industry is suggesting that a $117 million tax hit coming out of Wednesday's provincial budget will impact jobs in the province.
"This money will come out of current investments planned for Saskatchewan projects, including jobs and goods and service purchases," the Saskatchewan Potash Producers Association said in a news release.
On Wednesday, Finance Minister Donna Harpauer announced upcoming changes to the government's Potash Production Tax.
Effective April 1, the government is removing deductions that allowed many companies to pay little to no production tax.
The change will result in $117 million in additional tax revenue for the government.
The potash producers association said there is no transition time as company budgets are set.
In its news release, it said competing producers in countries such as Russia are not facing these cost increases and potash companies operating in Saskatchewan risk losing market share.
Highest royalty and tax rates in world, says Nutrien
Fertilizer giant Nutrien also issued a statement, saying Saskatchewan potash producers will now be subject to the "highest royalty and tax rates in the world."
Nutrien and the association complained the decision was made unilaterally and without consultation.
That's a point Opposition finance critic Trent Wotherspoon picked up on at the legislature on Thursday. He said the government's approach was "the exact wrong way to go at this."
I think this is ham-handed and bush league the way this government has gone at this. - NDP finance critic Trent Wotherspoon
Wotherspoon said the province's potash sector needs to be involved in a transparent process that allows it stability and the ability to plan.
"Sort of a 'no surprises' approach," he said. "And I think this is ham-handed and bush league the way this government has gone at this. And I was astounded that they didn't do this in a thoughtful, even-handed way."
NDP: Industry blind-sided on budget day
He said his party, the NDP, has long been pushing for the government to get full return on the province's potash revenues — but by way of a potash royalty review.
"We think a royalty review was the right way to go at this, in a thoughtful way, having industry at the table," he said. "Not to blind-side them on budget day."
As for why the government didn't consult with the potash sector in advance, Energy and Resources Minister Bronwyn Eyre said "it was purely the market sensitivity and the fact that these are publicly-traded companies."
Eyre said the only reason the province proceeded with this move was to get to a fairer place on the base payment for the people of Saskatchewan.
"Getting to a more simple, transparent, even balance when it comes to that resource and what the base payment actually means, which is supposed to be a payment on production. On production," she said. "And so if that's completely eroded by the credits, it doesn't make a lot of sense."
Royalty review 'remains on pause'
Eyre also indicated the government wasn't interested in a royalty review at this time.
"No, as of right now, " she said. "Absolutely the review remains on pause. This is only about the base payment and those tax credits that were eroding the value of the base payment for the province and for the people of the province."
Eyre said the government "would stand here any day and defend our record when it comes to competitiveness", and noted the province had seen $20 billion of investment in potash over the last decade.
She also said the government was "very confident" in global demand for Saskatchewan potash.
"It's a relatively good time to to look at something like this when you see the numbers that we're seeing around production and around price and around global demand, which are all looking very good," she said.
