At the outset, let's remember that Wall's position while in power has never been that the tax structure surrounding royalties is set in stone; instead, it's been that any change has to result in greater returns for corporate conglomerates at the expense of the province in order to be acceptable. So the Sask Party has been perfectly happy to hand out freebies such as head office tax credits on top of the system that was working perfectly well before it took power.
It's only when the NDP suggested that the province should benefit more from high prices and increased development that the Sask Party decided all existing arrangements were sacrosanct. Which leads to the foundation Wall is setting up for the mother of all resource giveaways:
Saskatchewan Premier Brad Wall is musing about adjusting the way the province collects money from companies that extract natural resources.So let's compare what we have now to what Wall seems to be proposing.
Wall says companies should have royalty stability especially after they've spent billions investing in the economy.
But the premier also says it's important that taxpayers are properly compensated if in 20 years potash production has doubled.
The current complex system is based on price rather than volume and Wall says it needs to change.
At the moment, Saskatchewan's royalty structure results in our province sharing in the value of our resources. If prices rise - reflecting no particular merit on the part of either developer or province, but an increase in value in the resources which we're allowing to be removed from our common wealth - then so too does the province's revenue. And it's that structure which allows for the prospect of a Bright Futures Fund which ensures that money is invested for the province's benefit when times are good, and available to meet our needs when prices drop.
In contrast, Wall apparently sees it as unacceptable that Saskatchewan, as the owner of the resources being extracted, should share at all in the gains when those resources increase in price. Instead, he's setting out to establish "royalty stability" based strictly on the volume of resources removed from our province. And if prices happen to rise - well, as far as Wall is concerned, that windfall belongs solely to his corporate benefactors.
Needless to say, his resource-sector puppeteers will have every reason to be happy with that outcome. But once again, it's the people of Saskatchewan who stand to lose out from a system designed to eliminate the benefit we'd otherwise enjoy from our own resources. And if Wall is indeed planning to force through changes during the course of this term in office, then the resource question may be the most important fight we face over the next few years.
[Edit: fixed formatting.]