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“Provincial mining and other taxes” consists of Saskatchewan’s potash production tax and resource surcharge. It does not include the basic Crown royalty, which increases the provincial return to about eight cents on the dollar.
Saskatchewan's potash production tax has been depressed by inflated writeoffs of 120 per cent of investment. PotashCorp’s press release (page 5) notes, “With reduced capital spending anticipated in potash, which impacts the calculation of the Saskatchewan potash production tax, we expect provincial mining and other taxes to be higher than 2012 levels and approximate 11-13 percent of total potash gross margin.
So, potash revenues should improve as investment tapers off, but will still be inadequate. Gross margin is the profit left after subtracting mining and transport costs from sales. The people who own the resource should collect more than 13 per cent of this value.
I have put forward specific proposals to close loopholes in the potash production tax that would collect a substantially better return for the people of Saskatchewan:
http://www.erinweir.ca/closing_potash_loopholes
In today’s report, “provincial mining and other taxes” is on page 9 while potash sales and gross margin are on page 13:
http://www.potashcorp.com/media/PotashCorp_Q4_2012_Earnings.pdf
