Sask United proposes review of province’s system for potash royalties

Affordability continues to be a key issue in Saskatchewan as prices on goods and services continue to rise.

One provincial political party is looking at reviewing the current system of how the province collects from companies mine one of the Saskatchewan’s largest resources, potash.

“That framework just does not capture the value of the resources, so that’s why we’re proposing to do a full review of the royalties,” said Jon Hromek, leader of Sask United.

Sask United, seen as a conservative and populist party, was formed in 2022. Hromek became leader in May.

Hromek says the current regime was designed back in the 1990s when potash prices were sitting around $100 to $200 dollars per tonne.

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“The paradigm has shifted in potash; now worldwide there’s much more demand for it,” Hromek said.

He said a potential royalty framework would look similar to that of Alberta’s system for royalties on oil and gas.

But the Saskatchewan Mining Association said companies looking to invest in the province would be cautious should changes take place.

“They need a secure, predictable financial framework so they know what their repayment and their return on investment is going to be,” said Pam Schwann, president of the mining association.

Schwann said that the current regime is complex and multilayered. “If you look at the potash sector, we pay 40 per cent more in royalties and taxes than other potash producing jurisdictions.”

Schwann said this is not an issue of companies paying their fair share but whether the province can remain a competitive jurisdiction.

“We’ve got a lot more risks that we’re managing to stay globally competitive. We don’t need political parties sensationalizing a very brief period of time in potash commodity prices,” Schwann said.

The association said Saskatchewan is home to one third of the global supply of potash.

— with files from Gates Guarin, Global News

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