Amended Potash Regulations Seek to Attract New Innovation and Investment
The Government of Saskatchewan has amended The Potash Production Tax Regulations, 2020, which will improve opportunities in the potash sector, particularly for junior producers, around innovation and research and development (R&D).
The regulations will offer incentive tax credits of 40 per cent of eligible expenditures for qualified R&D projects and approved market development programs. The amendments will allow companies to take full advantage of the credits by removing expiry dates and enhancing eligibility requirements.
“These changes will promote the expansion of Saskatchewan’s potash sector and ensure that our province remains the preferred jurisdiction in which to pilot innovative technologies,” Energy and Resources Minister Bronwyn Eyre said. “As we move into economic recovery, we want to attract and foster new, sustainable advancements in our province’s world-class resource sector.”
Qualified R&D projects must demonstrate improved production efficiency, mitigate environmental impacts, reduce physical risks to employees and mine operations, or develop new and improved potash products. Companies must develop new markets or expand existing ones to be eligible for market development credits.
“We are very pleased to see clear leadership with respect to the amendments to the Saskatchewan Potash Production Tax Regulations,” Gensource Potash Corp President and CEO Mike Ferguson said. “The amended regulations dovetail with the leadership in innovation that Gensource is deploying at its Tugaske project. Gensource welcomes the amendments to the regulations and look forward to providing long-term economic benefit to the Saskatchewan community while demonstrating real-world ESG leadership.”
“We welcome the amendments that recognize innovation and believe such incentives can benefit the Saskatchewan potash industry as it strives to pioneer new developments that enhance worker safety and environmental protections as well as efficiency and productivity,” BHP Canada Inc. President Giles Hellyer said.
The Saskatchewan potash sector accounts for approximately 30 per cent of world production and directly employs approximately 5,000 people. Full-year potash sales for 2019 reached 12.3 million tonnes–the second highest on record–with sales expected to reach a record of nearly 14 million tonnes in 2020.