NDP leader Ryan Meili says it’s time to review how potash royalties are structured – something the Sask. Party has promised in the past but hasn’t taken any action on.
“It’s important that we find the right balance to facilitate investment in Saskatchewan potash while making sure that the owners of the resource – Saskatchewan people – receive their fair share,” said NDP Leader Ryan Meili. “The Sask. Party promised in 2015 to review the potash royalties, but they failed to deliver. An NDP government would undertake an immediate review of potash royalties and make sure we have a system that is fair for potash producers and Saskatchewan people.”
The Johnson Shoyama Graduate School of Public Policy recently published a report that noted how “Saskatchewan’s current tax regime is far less lucrative for the people of Saskatchewan than has been the case in the past.”
The report described how, since 2009-10, the effective tax rates on potash profits in Saskatchewan have averaged 6.9 per cent, compared with 9.5 per cent in the early 2000s and 8.1 percent in the 1990s. This sharp reduction in rates has resulted in $40-100 million per year in lost revenue.
“$40-$100 million a year is a large sum, it’s revenue that could have been used to help balance the budget without having to cut schools, health care, supports for the most vulnerable and essential infrastructure like STC,” said Meili.
The report outlined the need for a review of our royalty structure. Two areas specifically highlighted are the tax exemptions for new production over 2001-2 levels and the 120 per cent allowance the province provides for new capital expenditures.
“A review of potash royalties is indeed important to ensure that this incredibly important industry to our province has strength and stability for decades to come,” said NDP Finance Critic Trent Wotherspoon. “This is an industry that has gone through many recent changes. We need to recognize the value of its significant investments and the thousands of jobs that this industry maintains and creates, while ensuring a fair return to Saskatchewan people.”
“We’re ready to work together to make that happen in a fair and transparent process, and to build a better future together,” Wotherspoon added. “Unfortunately, the Sask. Party have proven that they can’t be trusted with our finances and our economy, and it’s people and businesses that are paying for the costs of this mismanagement.”