Sunday, June 12, 2011

Imagine What We Could Do: If we raised resource royalties

Imagine What we Could Do

The low-down on the low rates

Saskatchewan’s resources royalty rates are ridiculously low. As economist Erin Weir writes: “Every time I check the numbers, I am again shocked by how low they have fallen.”

The Potash Corporation of Saskatchewan (PCS), now American-owned, generated about $1.6 billion on its Saskatchewan potash mines in 2010. But it only paid $77 million to Saskatchewan in royalties.

It only “paid a nickel in provincial royalties for every dollar of gross margin it made on potash,” says Weir. In contrast, Saskatchewan used to charge potash royalty rates of 25 – 31 per cent less than a decade ago.

Click here to read: Raise Potash Royalties.

1 comment:

  1. Basic economics dictates that when rates go down revenue goes up, as happened last time oil royalty rates were lowered by the previous NDP government...Potash will be no different.