Saskatchewan Budget 2019: Nutrien 'disappointed' with axing of $117M in potash tax credits
Changes to the Potash Production Tax take effect April 1
Saskatchewan's largest potash producer isn't happy with changes to the tax system announced in Wednesday's provincial budget.
The government is axing some of the tax credits for the potash industry. Finance Minister Donna Harpauer estimates the changes to the Potash Production Tax will boost provincial coffers by $117 million per year.
In a written statement to CBC News Wednesday afternoon, Nutrien officials said they're "disappointed" with the announcement. They said it was made without any consultation.
"With these changes, Saskatchewan potash production will be subject to the highest royalty and tax rates in the world," reads the statement. "In recent years the potash mining industry has incurred significantly increased costs and this is yet another step to reduce Canadian competitiveness."
Harpauer says the industry is strong, and the credits are no longer necessary.
"When you do tax incentives that have a purpose and a goal, I think they should always be revisited periodically to see if they reached the goal or serve the purpose they intended," Harpauer said.
"Sales are projected to be up as well as price. That was our time to ensure Saskatchewan people were benefiting from what was their resource."
The current system has been in place since 1990. The exemptions and credits were designed to be sensitive to downturns in prices and production levels.
They've grown and expanded over the years - so much, in fact, that many companies were paying little to no production taxes.
The flat tax rate will remain unchanged, but many of the deductions will be eliminated. According to provincial budget documents, the measures will bring in more revenue and simplify the calculation of taxes to ensure fairness for all parties.
The changes take effect April 1.