Sask. potash royalty rules need overhaul: tax expert Jack Mintz

Saskatchewan's potash royalty system needs a major overhaul, according to a new report released this morning in Regina.

Jack Mintz, director of the University of Calgary's school of public policy, has frequently criticized this province's tax and royalty regime for potash.

In his latest report, Mintz says Saskatchewan has the most complicated and inefficient tax regime of all of its international peers, despite being the largest producer of potash in the world with more than 30 per cent of global production.

"The convoluted nature of Saskatchewan's regime benefits no one not producers, investors or the provincial government, which is left without any revenue certainty from its most significant natural resource," the report says.

The report rates New Brunswick's system for charging companies to mine potash there as a bit better than Saskatchewan's, but nothing to brag about either.

Mintz says neither province needs to "endure such a muddled and counter-productive approach to potash taxation" but could implement simple solutions.

He recommends provinces change their current system to a "rent-based" royalty system that taxes revenue left over after capital spending and operational costs have been deducted.

Mintz said Saskatchewan under-charged potash companies in the past five years and the province is set to charge them more, when they are curtailing investments.

Saskatchewan Premier Brad Wall, however, said Wednesday that you don't change the rules of the game at half-time.

"I think they know that that's not going to be on and I'm not sure how easily, especially given what's happened in some of those other parts of the world, how easy that'll be," Wall said. "These investments are massive and they're made and they're in the ground."

Wall added that some of the figures used in the report are "wrong" and said that makes it hard to debate its merits.