The Sask. Party government pulled out all the stops yesterday to report a balanced budget, quite possibly the last one before next spring’s provincial election.
The drop in oil prices is a huge fiscal blow to Saskatchewan, and one of the ways the government projects continued balanced budgets is by assuming a rebound . . . → Read More: The Progressive Economics Forum: Will Oil & Potash Put SK Back in Black?
Assorted content to end your week.
– Ian Welsh discusses the nature of prosperity – and the illusion that it means nothing more than increased economic activity: All other things being equal more productive capacity is better. The more stuff we can make, in theory, the better off we’ll be. But in practice, it doesn’t . . . → Read More: Accidental Deliberations: Friday Morning Links
Today’s fourth-quarter report indicates that PotashCorp paid “provincial mining and other taxes” of $194 million on potash sales of $3 billion in 2013. In other words, Saskatchewan’s resource surcharge and potash production tax amounted to just 6.5% of the value of potash sold.
Adding the basic Crown royalty (which PotashCorp includes in “cost of goods . . . → Read More: The Progressive Economics Forum: PotashCorp Projects Low Royalties
Miscellaneous material for your mid-week reading.
– Scott Doherty recognizes that Saskatchewan’s failure to collect a reasonable royalty rate for potash and other natural resources is directly responsible for the province crying poor when workers are laid off. And Alex Himelfarb points out that the magical theory behind perpetual tax cuts is purely a matter . . . → Read More: Accidental Deliberations: Wednesday Morning Links
Assorted content for your weekend reading.
– Jim Stanford counters the myth of labour shortages by pointing out Canada’s significant – and growing – number of potential workers who lack a job. And Janet French reports on how PCS’ job cuts have affected both the workers who were laid off, and the communities who depend . . . → Read More: Accidental Deliberations: Saturday Afternoon Links
Earlier this week, PotashCorp laid off 440 workers in Saskatchewan. Here are the closing paragraphs from today’s front-page story reporting a letter from Premier Brad Wall asking the company to consider reducing its dividend payments to shareholders in order to maintain jobs in Saskatchewan:
Regina economist and former NDP leadership candidate Erin Weir said if . . . → Read More: The Progressive Economics Forum: Weir vs. Wall on Potash Profits, Dividends and Royalties
Here, asking whether growth and stable employment are part of the deal when the Saskatchewan Party offers massive handouts to the resource sector – and if so, how to handle the fact that PCS is pocketing tax incentives while slashing jobs.
For further reading…– The Wall government’s own press release touting its potash giveaways is . . . → Read More: Accidental Deliberations: New column day
Following last week’s troubling news about potash, the Saskatchewan government released its first-quarter financial report today. The headline seems to be “Oil Keeps Budget in Black”, with a forecast increase in oil revenue more than offsetting a forecast decline in potash and other revenues.
But the forecast West Texas Intermediate price is only up by . . . → Read More: The Progressive Economics Forum: Saskatchewan Budget Saved by Falling Loonie
Here, on the questions raised by a sudden drop in potash prices – and why we should reconsider our economic and social priorities so that a minor fluctuation in a still-ample level of wealth isn’t seen as reason to push the panic button.
For further reading…– My discussion of Robert and Edward Skidelsky’s How Much . . . → Read More: Accidental Deliberations: New column day
PotashCorp reported today that it paid $81 million of “provincial mining and other taxes” on $975 million of potash sales in the second quarter of 2013. In other words, Saskatchewan’s potash production tax and resource surcharge amounted to 8% of potash sales.
Adding the basic Crown royalty of just over 2% (which PotashCorp includes in . . . → Read More: The Progressive Economics Forum: PotashCorp Reports Inadequate Royalties
Assorted content for your Sunday reading.
– Ian Lovett reports on the use of “capital appreciation bonds” in California to ensure that future generations pay an inflated price to private-sector developers for infrastructure today.
– Justin Ling’s review of Joyce Murray’s message about electoral non-competition pacts is well worth a read – but I’ll . . . → Read More: Accidental Deliberations: Sunday Afternoon Links
As expected, the last week has been a relatively quiet one in the Saskatchewan NDP’s leadership campaign – representing the break between membership recruitment and voter contact. But there have been a few developments worth noting.
Most obviously, the latest debate took place in Yorkton. Scott has already posted his thoughts, while Twitter coverage at . . . → Read More: Accidental Deliberations: #skndpldr Roundup
While all has been relatively quiet from two of Saskatchewan’s NDP leadership camps, there’s still been some activity worth highlighting over the last few days.
– First, Scott Stelmaschuk has made another massive contribution to coverage of the race with a thorough candidate questionnaire. And Erin Weir’s response tells us somewhat more about the political . . . → Read More: Accidental Deliberations: Leadership 2013 Roundup
Here, expanding on my previous post as to why we should be wary of Brad Wall’s plans for potash royalties.
For further reading, I’ll again recommend Mitchell Anderson’s Tyee series contrasting how Norway has handled its natural resources with Canada’s laissez-faire system. (And the lesson seems all the more applicable in the case of potash, . . . → Read More: Accidental Deliberations: New column day
Miscellaneous material for your weekend reading.
– Gerald Caplan weighs in on Jack Layton’s legacy: It seems to me that Jack Layton’s enduring legacy is twofold. First, he set a standard of doing politics that, if followed by others, would change the entire tone of public life for the country. You could see his influence . . . → Read More: Accidental Deliberations: Saturday Morning Links
No, Brad Wall’s new musings about changing Saskatchewan’s resource royalty structure won’t pass without comment from this corner. But it’s worth noting that the reason for concern lies not a mere flip-flop from the Sask Party’s 2011 election platform, but what’s all too consistent in its behaviour since taking power.
At the outset, let’s remember . . . → Read More: Accidental Deliberations: The great giveaway
Miscellaneous material for your Monday reading.
– Pratap Chatterjee discusses our new age of robber barons – and how the wealthiest CEOs get out of paying any tax at all on massive sums of money: The Institute for Policy Studies, a Washington DC thinktank, says that a chunk of the money Ellison spent buying Lanai . . . → Read More: Accidental Deliberations: Monday Morning Links
I had the following comments in yesterday’s front-page story on Vale’s decision to postpone its proposed $3-billion potash mine at Kronau, Saskatchewan:
Regina economist Erin Weir, who is widely expected to run for the leadership of the provincial NDP, said in a statement Friday that the Vale announcement “represents a failure of the Saskatchewan government’s . . . → Read More: The Progressive Economics Forum: No Vale on the Plains?
Saskatchewan’s Ministry of Energy and Resources has released its 2011-12 Annual Report. The potash table (page 36) incredibly shows “Royalty/Tax” revenue of only $62.5 million in 2010-11 and $38.4 million in 2011-12.
These figures amount to just 1.2% and 0.6% respectively of the value of potash sales. I have long argued that Saskatchewan’s potash royalties . . . → Read More: The Progressive Economics Forum: 1% Potash Royalties: Typo or Foreshadowing?
Agrium reports that it paid half as much to the people of Saskatchewan in the second quarter as it had in the same quarter of last year. The company’s quarterly “potash profit and capital tax” payment dropped to $8 million from $15 million a year ago.
Agrium’s only potash mine is in Saskatchewan. The value . . . → Read More: The Progressive Economics Forum: Agrium Halves Potash Royalties
Miscellaneous material for your mid-week reading.
– Zach Carter shines a spotlight on the few types of interests who stand to gain from austerity: But the austerity game also has winners. Cutting or eliminating government programs that benefit the less advantaged has long been an ideological goal of conservatives. Doing so also generates a tidy . . . → Read More: Accidental Deliberations: Wednesday Morning Links
Today’s Mosaic quarterly report provides further evidence that the Government of Saskatchewan should improve its royalty and tax structure to collect a better return on the province’s non-renewable resources like potash.
Despite higher potash prices, Mosaic paid lower royalties and resource taxes to Saskatchewan last quarter than in the same quarter of last . . . → Read More: The Progressive Economics Forum: Mosaic Profit Argues for Higher Royalties
Saskatchewan’s Minister of Energy and Resources replied to my op-ed and letter on Dutch disease and resource royalties. On Friday, he was promoted to Minister of Everything.
Columnist Murray Mandryk wrote, “Given the amount of power Bill Boyd now has in his super-economy portfolio, he may be one fluffy Persian cat and remote desert island . . . → Read More: The Progressive Economics Forum: Debating Boyd on Resource Royalties
Statistics Canada reported today that the economy shrank in February, driven by declines in resource extraction and manufacturing.
Oil and gas extraction as well as hard-rock mining decreased due to temporary shutdowns. However, the most dramatic decline was in potash production, down 19% due to mine closures in Saskatchewan. The provincial government, which is budgeting . . . → Read More: The Progressive Economics Forum: Canadian Mining and Manufacturing Stumble
Miscellaneous material for your weekend reading.
– Trish Hennessy points out that Rob Ford’s contemptuous attack on the idea of secure employment may offer an ideal contrast between the right-wing view of the economy and the stability citizens actually want for themselves: Remember when holding down a job for life was considered a sign of . . . → Read More: Accidental Deliberations: Saturday Morning Links