Canada’s most prominent union economist, who is now working in Brussels, has penned an oped in today’s Star Phoenix. He argues that the Province of Saskatchewan should review its royalty structure because it could make more money from raising rates without slowing investment in the industry.
If this is true it must be that Sask. has a certain amount of “market power” in potash; the ability to raise prices and earn greater profits as a result of raising them. Weir argues that if their are costs to the industry then they will be borne against corporate profits, but do Potash companies offer a better return than others in the long run and on average? If not, then the only possible results of increasing royalties are lower investment or higher Potash prices.
Yet, why should the benefits stop at the border of Saskatchewan, why should all of Canada not benefit from “owning” this resource? Why stop at Canada, why not the world? Surely the compassionate position would be to give our much poorer brothers and sisters overseas the benefit of lower prices by taking smaller royalties?