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Saskatchewan is blessed with the world's largest bounty of potash – and cursed with the worst tax system for capitalizing on its bounty of the naturally-occurring fertilizer. It is a regime so complex that nobody – miners, investors or governments – has a clue how to forecast the tax outlay from year to year. Even University of Calgary tax expert Jack Mintz, who has written extensively about it, calls the regime "the most complicated thing I've seen in my whole career."

Finally, after much prodding, the government of Brad Wall is promising to do something. In the provincial budget tabled this week, the Premier promised "a broad review of the entire potash tax regime." Change can't come soon enough. Potash Corp. of Saskatchewan, the industry's largest miner, isn't happy, but it has a lot of nerve to complain.

Saskatchewan's potash tax system, according to a recent paper co-written by Dr Mintz, is convoluted, inefficient and uncompetitive. There are three levels of levies, creating a "tax jungle" that leaves producers subject to marginal effective tax and royalty rates last year ranging from 0.3 per cent to 22.6 per cent. It's a wild and ridiculous range, especially considering the rate in other potash-producing countries amounts to one number, usually in the mid-teens or low 20s.

Worse, since the government allows miners overgenerous writeoffs from capital spending , the province incurred potash production tax losses in 2010, 2012 and 2013 and eked out only $10-million in such revenue in 2011 – at a time when production and commodity prices were rising. (by comparison, the government's production tax take averaged almost $120 million from 2004 to 2007 and reached $749-million in 2008). In addition to foregone tax revenues, the allowances distort the economy by encouraging overinvestment in potash mines, which could create overcapacity, spark local inflation and draw investment dollars from other areas.

Dr. Mintz suggests replacing the tax regime with a simple system that taxes net cash flows, applies a single royalty rate (based on sales net of transportation and distribution costs) and harmonizes taxes. Saskatchewan's all-in potash tax rate would be 17.7 per cent, below the average across all potash-producing countries.

Although the province has been cool to Dr. Mintz's interventions in the past, it now seems willing to listen. Meanwhile, the government, looking to plug a hole in its budget from plunging oil prices (yes, Saskatchewan has a lot of that too, along with uranium, wheat and crazed Roughriders fans), has decided to tinker with accounting rules for capital expenditures, which it says will raise its take from the potash industry this year by $150-million.

This has the mighty Potash Corp. crying foul. The company says the changes will cut pretax earnings this year by up to $100-million (Canadian) and "impacts the ability of our shareholders to earn a fair return … and undermines Saskatchewan's relative competitiveness," CEO and president Jochen Tilk said Wednesday.

If Saskatchewan needs a sensible potash tax regime, Potash Corp. needs to come to its senses. This is the same company that got Mr. Wall to lead the charge to kill an unwanted takeover, the same company that benefits from both Saskatchewan and Ottawa turning a blind eye to long-standing accusations its industry operates in a cartel-like fashion, and that has been spared paying much bigger tax bills in the past, as described above. It's also the same company that periodically idles production, throwing many employees temporarily out of work, to squeeze supply and drive up prices. If you're wondering how much the tax change will hurt, it would amount to less than 4 per cent of the company's $2.3-billion (U.S). in 2014 operating income.

Potash Corp. is one of the squeakiest wheels in Saskatchewan politics. For once it's nice to see the government push back a little. Mr. Wall can afford to: it's not like Potash can shut its mines and move them to another country.