Last weekend, we celebrated Labour Day and the tremendous contribution working men and women make to the province of Saskatchewan. This province has been built on the hard work and ingenuity of its people. Most people I talk to really only want the opportunity to have a good secure job in a safe work environment and they will get out of bed in the morning and contribute to our society.
It is very disconcerting to see the numbers released last Friday which show that Saskatchewan lost 4,000 jobs in the month of August compared to last year. In fact, we have more people unemployed in August than any time in the last 30 years. Employment declined in 9 of our 15 industry groups and some commentators are speculating that we will see the first year of negative job growth since 2001. So much for the Wall government's reliance on resource extraction as their only policy for job creation.
This morning we had a major announcement which has the potential to make this picture even worse. Two of the three major players in the potash mining business in Saskatchewan have agreed to a merger. The price of potash is as low as it has been at any time in the last 10 years and we have already seen layoffs at the mines as the companies attempt to control inventory and drive up prices.
When large companies merge, they usually look for efficiencies in order to maintain shareholder value and that usually means rationalization of resources i.e. job cuts. I will not be surprised to see either Agrium's Vanscoy mine shut down or one of the PCS operations because of this merger. I am sure we will hear Mr. Wall claiming victory because the PCS head office for mining operations is staying in Saskatoon for now but we will not see the closure of Agrium's operations in Calgary.
What should be really appalling to Saskatchewan taxpayers is that we have showered both of these companies with billions of dollars in tax credits to expand their mining operations beginning a short 10 years ago. This created the illusion of a major boom in the mining industry which of course was going full bore before the 2011 election campaign. The fact of the matter is most of the personal income tax generated by the construction boom went outside the province and the supposed world demand for potash did not materialize to soak up the new tonnage. The low cost excess capacity created in places like PCS Rocanville can now meet current demand while other mines who are less efficient can be shut down.
I said back then as I do today that if there is increased demand in any sector it should be up to shareholders to invest in the infrastructure to meet that demand not taxpayers. If the tax credits had been granted for a very short-term defined period of time separated from the world price of potash, there might be an argument made for them. That is not and was not the case.
This new merged company could be laying off thousands of Saskatchewan workers and still benefit from the tax credits bestowed upon them by the Saskatchewan government. That is totally unacceptable and it will be interesting to see what sort of deal Mr. Wall and his cronies have negotiated with this new company on behalf of Saskatchewan's taxpayers. If it's anything like the deals they negotiated on the GTH and the Regina bypass, Saskatchewan working men and women are in for further bad times.
These issues must be debated for “The Right Reasons”