A paper published in the Johnson Shoyama Graduate School of Public Policy says that Saskatchewan should get more money from potash companies.
The fertilizer’s price doubled in 2022, creating windfall profits of $10 billion. Of that windfall, the Saskatchewan government collected only one-quarter on behalf of resource owners, the federal government ordered one-tenth, and the mining companies kept two-thirds after tax.
The provincial Public Accounts, reported by fiscal year, indicate that potash revenues nearly doubled from $1.3 billion in 2021-22 to $2.4 billion in 2022-23 – an additional $1.1 billion from Crown royalties and the potash production tax, but is way off from the over 10 billion it could collect.
That number is significant for the province as it would be enough to pay off the entire provincial General Revenue Fund’s operating debt.
“Ten billion amounts to $8,500 for every Saskatchewan resident, seventeen times the value of the $500 Affordability Tax Credit cheques the provincial government sent only to adult tax filers,” the report reads.
“The potash windfall could have been distributed to Saskatchewan people through cash transfers or tax cuts, used to pay off debt, saved for future generations, or invested in provincial infrastructure and services such as healthcare, education and housing,” the report continued.
The report made multiple recommendations for the province, including simplifying the crown royalty, resource surcharge and base payment to guarantee a minimum return from potash extracted, broadening the profit tax to cover all tonnes of potash produced, limit write-offs to 100% of the amount a company invests, increase the potash profit tax rate to collect a fair share of ongoing resource rents and future windfalls for the people of Saskatchewan.
