‘Just not right’: Potash industry shocked by Sask. tax change

A spokesman for Saskatchewan’s potash industry says it’s “surprised, disappointed and angry” over the provincial government’s decision to end production tax deductions.

Finance Minister Donna Harpauer announced Wednesday the province was ending the credits, which had lowered potash producer effective tax rates to six per cent for several years.

The move brings that tax rate back to 9.2 per cent, where it was in the mid-2000s. Harpauer said it would raise an additional $117 million for the province, helping bring the budget back into balance after several years of deficit.

Fertilizer Canada, which represents potash companies in Saskatchewan, expressed alarm over the manoeuvre, saying the companies weren’t consulted about the tax changes before they were announced.

“To just kind of quietly slip in this major tax increase, it’s just not right,” CEO Garth Whyte said Thursday. “This is an industry that is committed to Saskatchewan, stays in Saskatchewan. This is not how you do business.”

The potash advocate warned the sudden tax changes would contribute to uncertainty for investors looking at the province as a destination.

“We were trying to position Saskatchewan as the most competitive province and area of the world,” he said. “They’re kind of eroding that position with this.”

He added it would hurt potash producers.

“They’re going to have to find it somewhere; it’s death by a thousand cuts,” Whyte said, noting other tax issues like the federal carbon levy will also come into play.

The finance minister defended the tax changes shortly after her budget speech Wednesday, saying the rate for potash producers was still nearly half of what it was at its highest point of 18 per cent a few decades ago.

“We feel that’s fair and reasonable,” Harpauer told 650 CKOM’s budget day broadcast. “Potash is the people’s resource, and we think the people should benefit from that resource.”

Whyte said he’s hoping for discussions with the province on next steps after the tax increase.

He also assured that the changes don’t mean potash companies will pull up stakes in Saskatchewan.