Imagine What We Could Do

A coalition of unions wants Alberta’s Auditor General to investigate what happened to the province’s resource royalty money. The unions are concerned the province is missing out on billions of dollars in resource revenue. “The government’s purse isn’t empty because it’s spending too much. It’s empty because the governmnent isn’t bother to collect what it should – and what Albertans, as the ower of the resource, are actually owed,” says Gill McGowan, president of the Albert Federation of Labour. Read more here: http://www.cnw.ca/en/releases/archive/February2011/17/c3837.html

Saskatchewan’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  “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.

Nearly 140 Saskatchewan communities are under boil water advisories because of concerns about the quality of their drinking water. And many other communities require funding to upgrade their water and wastewater facilities to meet safety standards.

Raising royalty rates could help to finance major improvements in our public drinking water systems.

The Saskatchewan government recently increased its contribution to long-term care projects, stating the province will now pay 80 per cent of the capital costs of building new facilities instead of 65 per cent. The government allocated $50 million in 2011 for building or renovating 13 long-term care facilities.

But why doesn’t the province increase royalty rates and pay all of the costs associated with public long-term care facilities. Why do communities have to raise any funds for these worthwhile projects?

The Saskatchewan government postponed funding 13 long term care facilities a few years ago, stating the province could not afford the $152 million investment.

We could afford to do a lot more with higher royalty rates.

Now is the time to extend medicare to include publicly-delivered residential long-term care and an expanded home care program.

Almost every Saskatchewan resident except the Premier and his cabinet agree royalty rates need to increase. The debate is over how much.

If potash royalty rates had been 30 per cent in 2010, PCS would have paid $540 million to Saskatchewan people in royalties instead of $77 million. And that’s just one potash company.

NDP opposition leader Dwayne Lingenfelter is calling for a review of the royalty rate structure, stating he would “drive a hard bargain with potash companies in order to get a bigger take of the profits for taxpayers.”

Imagine if we made poverty history?

That’s what happened in Dauphin, Manitoba from 1974 to 1978, when almost all of the community’s 13,000 citizens were guaranteed annual income support to keep them above the poverty line.

What was the result of the $17 million experiment? The population’s health improved, resulting in fewer hospitalizations, accidents and injuries. Hospitalizations for mental health issues also dropped significantly, according to Dr. Evelyn Forget, a University of Manitoba profession analyzing the data.

Imagine if we provided a guaranteed income above the poverty line for all Saskatchewan residents. Check out: “Life in a Town Without Poverty”.

It’s hard to imagine but the giant PCS company paid less corporate income tax to Saskatchewan than to the government of Trinidad, according to economist Erin Weir.

PCS, which generated $2.8 billion in sales of Saskatchewan potash in 2010, paid $82 million in corporate taxes to Saskatchewan. In contrast, it paid $113 million in taxes to Trinidad for its manufacturing facility in that country. Click here to read his blog post: PotashCorp’s Fuzzy Math.

Despite record potash profits, the Saskatchewan government continues to lower the royalty rates. It now sits at just five per cent of a company’s gross margin.

The Potash Corporation of Saskatchewan (PCS), which the Devine government privatized in the late 1980s, is now based in Chicago. The CEO of PCS Bill Doyle recently told the Star-Phoenix he believes Saskatchewan people are getting their fair share of the profits. Few share that view.

One thing Saskatchewan residents do agree on is Saskatchewan potash has benefitted Bill Doyle.

The multimillionaire President and CEO of PCS took home $24 million in 2007 alone. According to a May 29 article in the Globe and Mail, Mr. Doyle had the sixth biggest pension in the country in 2010 valued at $20,789,853.

Meanwhile, 22,662 Saskatchewan people used a food bank in March 2010, an increase of 20 per cent over 2009. Check out the Hunger Count 2010 here.

The Saskatchewan government continues to give huge tax breaks to very profitable resource companies. In the late 1970s, Saskatchewan recouped about 50 per cent of oil and gas sales in royalties. Now, we recoup about 10 per cent in royalties and taxes.

It is a tax break that costs Saskatchewan residents millions of dollars in lost revenues each year.

Saskatchewan Premier Brad Wall continues to support these tax breaks.

Meanwhile, Statistics Canada reports that 115,000 Saskatchewan people were living in poverty in 2008, including 33,000 children under the age of 18.