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It is becoming evident in the last few weeks that the Sask Party government’s management of our natural resources and how they are marketed to the world is not fulfilling Saskatchewan’s potential. This government has had some of the best resource prices over the last 4½ years that our province has ever seen.

We are pumping more oil and mining more tonnes of potash and uranium than ever in our history and yet we are facing budgetary shortfalls and cutbacks to essential services like rural health care, education and employment opportunities for certain sectors of our society. This government seems to have the opinion that we get our resources out of the ground in as large of quantities as possible and sell as much raw product as possible to meet the budgetary requirements of the province. This policy is doomed to failure if we do not have strategies around long-term value adding of our resources.

In the 2011 election campaign, the PC Party called for the formation of a vehicle whereby Saskatchewan could partner with private business, co-ops, First Nations and other levels of government to create long-term value added resource development, job creation and a sustainable environmental footprint. We called this the Saskatchewan Partnership Fund (SPF). The recent controversy surrounding the Keystone Pipeline to Texas brings this issue to a head. Currently, western Canadian oil is being discounted anywhere from $15-30 a barrel under the West Texas intermediate (WTI) benchmark price for crude oil in North America. It has consistently been over $30 a barrel underneath the north sea BRENT price which is a world benchmark for crude. We are losing billions of dollars because we cannot move our increased production to refining sites on the Gulf Coast of Texas or to eastern Canadian refiners. We do not have enough refining capacity in western Canada to handle the extra volumes being produced. These volumes of crude will continue to grow.

At the same time as this is occurring, we find natural gas prices at historic lows and all kinds of production of shale gases being developed in North America. Many in the resource sector see these developments as bad news for Saskatchewan and Alberta for many years to come. I believe this is an opportunity for Saskatchewan to position itself for decades to come. Saskatchewan is the ideal place to manufacture fertilizer for the North American marketplace. The former Saskferco now Yara plant at Belle Plaine has proven to be a very successful enterprise. The Saskatchewan government should have taken the profits from the sale of Saskferco, put them into a fund like the SPF and gone looking for more partners to develop this business. Long-term stable gas contracts are the heart and soul of the production of nitrogen fertilizer. The refining of crude oil into diesel fuel has a by-product called sulphur. Sulphur is now becoming one of the essential fertilizer ingredients in the blends which farmers use for the production of canola. The growth of the canola growing and crushing industries has been one of the brightest agricultural developments in decades.

If we are to achieve the canola production goals set out by the Canola Council of Canada then both yield and acreage must continue to grow. This will not happen without large amounts of fertilizer and new types of fertilizer technology. Fertilizer production and oil upgrading and refining are long-term value added job creating engines of growth which last for decades. They also fill government coffers with a never ending flow of royalty dollars, tax dollars and personal wealth of the people who work in those industries. We should be looking for ways to pipeline diesel fuel not crude oil because diesel fuel is one of the major components that will drive the western Canadian economy and keep our province and Canada strong. We are in an ideal position to manufacture and export fertilizer, fuel and technology all over North America. It is time this government got off of their fixation with potash and started looking at how to build a sustainable economy for the future with value added products not raw commodities.

Hopefully in this week’s upcoming budget, there will be some recognition by the Sask Party government that they cannot keep doing the same old policies left over from the previous NDP governments when it comes to how we develop our resources. The fact that we are $200 million short on our corporate income tax projections shows that the existing structures are not working and the government must take a different view. I will be watching with interest to see if these people have the foresight and wisdom to change their path. It will also require some political courage. Wednesday will be interesting.

Your feedback is welcome on anything you see in the Monday Morning Commentary. Please send your comments to contact @pcsask.ca. If you know of anyone that would be interested in receiving this by email, please forward me their email address. Also – don’t forget to check out our ever-changing website at pcsask.ca.

These issues must be debated for “The Right Reasons”.