It’s time for a public debate on resource royalties in Saskatchewan

June 16, 2005

A new study released today by the Canadian Centre for Policy Alternatives says it is time there was a serious public debate in Saskatchewan about resource royalties. 

The report shows that resource royalties in Saskatchewan are among the lowest in the world.  The report also documents trends around the world which show that governments in most other jurisdictions are increasing royalty rates and control over resource industries. 

“Around the world it is not uncommon for private corporations to pay up to 50% of natural resource sales to the host country,” says John W. Warnock, the report’s author and Research Associate for CCPA Saskatchewan.  

“In Saskatchewan the amount of royalties as a percentage of sales has decreased to less than 15%,” says Warnock.  “At the same time the   international price for the majority of natural resources has increased dramatically and resource extraction corporations are recording record sales and profits.”

Warnock says it is not surprising that royalty reductions have been welcomed by Saskatchewan’s large corporations, but he says the revenue losses have created serious problems.   

“Devine’s Government responded with budget deficits and increases to the provincial debt, while Romanow and Calvert’s NDP Government’s balanced the budgets by cutting programs, introducing gambling, increasing user fees, and off loading costs,” says the author.  

“Property taxes have risen to the highest level in Canada because municipality and school board grants have been cut.  If the royalties had remained at their previously high levels, the government would have had an additional $2 billion to spend in 2003. 

Warnock says that in the 1991 provincial election, the NDP pledged to raise royalties on natural resource extraction back to the Blakeney Government’s levels of 50%.  Once in office, he says, they rejected their pledge and continued the Devine Government’s policy and steadily reduced the extraction royalties on non-renewable natural resources. 

“Saskatchewan’s government is moving in the opposite direction and the public must demand that serious public debate take place on resource policy,” concludes Warnock.  “It is especially ironic that the Government of Saskatchewan is undertaking a Business Tax Review and the businesses already getting the biggest breaks in this province – the resource extraction corporations - are exempt from this process.” 


For more information, contact:  John W. Warnock, (306) 352-5282