CBC News reported that the Saskatchewan government has announced changes in how it receives money from the potash industry.
CBC News reported that the Saskatchewan government has announced changes in how it receives money from the potash industry. Specifically, it will take in an extra $148 million in potash revenue “that would otherwise be deferred to another year.”
Already, the share prices of major potash producers in the province are being impacted. Notably, Potash Corporation of Saskatchewan Inc. (TSX:POT,NYSE:POT) has spoken out against the changes.
As quoted in the market news:
The bottom line is that the treasury will take in about $148 million more in potash revenue that would otherwise be deferred to another year.
Combined with higher revenues due to higher potash prices, the treasury is expecting to take in close to $800 million this year, compared to about $400 million in the 2014-15 budget.
According to Krawetz, the change to the potash rules this year is only an interim step that will be followed by a review of the entire potash royalty and taxation regime.
From the province’s perspective, the extra cash from potash takes some of the sting out of the loss in oil revenue. The province expects to take in $903 million in oil revenue in 2015-16, compared to the $1.6 billion projected in 2014 when oil prices were high.