“It’s a very important issue for the province, which will make a big difference in terms of the future of the province and whether we have more equality of opportunity, or what I see as a growing divide between people desperately living in poverty and people whose wealth is increasing,” said Eric Cline on CBC’s Blue Sky with Leisha Grebinski on Wednesday.
Cline is the author of a new book called Squandered: Canada’s Potash Legacy, which is about how the government has not made the most of the resource.
“The tax and royalties we will receive for 2023 are … $730 million, which a year ago was estimated to be $1.3 billion,” said Cline.
“That $730 million is on $9 billion of revenue to the company.”
Cline said in 2015 companies paid more on revenue — about 12 per cent — of $6 billion, and about the same amount on $5.7 billion in 2018, but in 2023 with up to $9 billion, companies paid only eight per cent.
“I think most people understand that as your income goes up, you pay more tax on the additional dollars you make. But with the potash companies, as their income has been going up on higher prices, and most of it is windfall profits, we’re actually taking a lower percentage from them and nobody else gets that deal,” said Cline.
This is the best summary I could come up with:
A former NDP cabinet minister and mining executive hopes his new book will raise public awareness on what he says is the issue of tax fairness from potash companies.
The flat terrain of the province makes access to mining the mineral much easier than in other regions like Alberta, which has a more rocky geographic makeup, according to Cline.
But with the potash companies, as their income has been going up on higher prices, and most of it is windfall profits, we’re actually taking a lower percentage from them and nobody else gets that deal," said Cline.
During budget debate at the legislature on March 25, Saskatchewan Party MLA Warren Kaeding took aim at when the NDP nationalized the potash industry in the 1970s.
Jack Mintz, another economist and resource royalty expert from the University of Calgary, weighed in to say while the taxation system is a “poorly designed” for companies in the province, he cautioned against raising taxes too high.
Mintz recommends taking a different approach with royalties, similar to Alberta’s system with the oilsands — where projects reach a point of maturity and revenues have made up for all their massive startup costs.
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