It's interesting that both the best and worst moments for Premier Brad Wall's Saskatchewan Party government have revolved around potash.
Clearly, the biggest mistake Wall's government made was relying on the optimist, and perhaps even the actually revenue projections, of the potash industry that resulted in the government overestimating potash revenues by more than $2 billion in 2009.
By either not fully understanding or wilfully ignoring the obvious potential for a downturn in potash revenues in the wake of the October 2008 economic crash, the 2009 budget set potash revenues for the year at $1.9 billion. That was nearly four times any previous budget forecast and, even in context of the government's record potash revenues at the time, it was a foolhardy mistake.
One can only wonder if it has dampened Wall's trust of the potash industry.
Interestingly, though it was the potash industry that also Brad Wall's best moment as premier.
His staunch defence of PotashCorp,_ the biggest and most influential player in the industry that undoubtedly had significant influence on the outlandish 2009 revenue projections, from BHP Billiton's hostile takeover elevated Wall to the status of national political figure and a virtual politically untouchable in this province.
Wall's stirring speech about potash belonging to all of us became a rallying cry for the people of Saskatchewan. PotashCorp may have cost Wall politically in 2009, but saving PotashCorp in 2010 may turn out to be a career-defining move for the Premier.
But the question now is: What lesson Wall has learned from all of this?
It's an especially relevant question in the take of Wall's acceptance of PotashCorp's recent "Pledge to Saskatchewan".
Now, don't get me wrong. It's not as if Wall, or anyone in Saskatchewan, for that matter, should be ungrateful for the sudden demonstration of largess we're seeing from PotashCorp. CEO Bill Doyle.
News of potentially 100 more head office jobs in Saskatoon is truly great news ... even if these jobs come with a $100,000 per job provincial government tax subsidy for the first five years.
The province should be also be grateful for the huge economic benefit that will accompany PotashCorp's commitment to mine expansion (although this also comes at a significant cost in royalty holidays) and emphasis on rural employment and First Nations employment. And PotashCorp's newfound interest in corporate giving (a promise of about $10.5 million, annually) will include an undisclosed amount to the province's Shock Trauma Air Rescue Service (STARS) air ambulance that's especially important to rural Saskatchewan.
But while all of the above is great, there is an increasing question of whether PotashCorp and the rest of the industry are paying the province enough in royalties. What shouldn't be lost in all our gratitude is the fact that this was a company that made $1.8 billion in 2010 and only paid $76.5 million in royalties and taxes back to Saskatchewan people.
And one can't help but be a little suspicious that PotashCorp executives see a few more head office jobs in Saskatchewan and a few extra million for Saskatchewan charities as a small price to pay for the hundreds of millions that they and their shareholders will reap from the existing highly favourable royalty structure.
Of course, Doyle argues the royal rates are right and the small amount his company paid last year was an aberration due to all the write-offs the company claimed because of mine expansion. Certainly, the business community and the Sask. Party support him and accuse anyone of suggesting royalty rates are wrong of being anti-business.
Nonsense. It's the job of Premier and his government to get the best benefit from potash he can.
Let's hope Wall has learned this lesson from both 2009 and 2010.
