10/06/2011
The low-down on the low ratesSaskatchewan’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.
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.
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