Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Wednesday, December 18, 2013

Profitable PotashCorp underpays province

For communities relying on the resource sector, there can be few mornings more devastating than the one earlier this month when workers at the Lanigan potash mine arrived at work, only to be told they were now unemployed and to go right back home. They had been laid off.

What a hard drive home that was for many back on the highway, heading out across central Saskatchewan, back to one of the many rural communities that rely on potash for their livelihood. They had plenty of time to let the news sink in ... only to have to repeat it to their families when they got home.

For some 212 workers at the PotashCorp mine in Lanigan, that was how the morning of Dec. 3 played out when the company announced it would lay off 440 workers across the province and more elsewhere.

Workers at the mine were expecting something to come as potash prices dropped. Years of strong prices had come to an end with the Russians pulling out of an international potash marketing group. In a global economy, a decision made in Moscow can easily reach into the living room of a family in Saskatchewan and pull the rug out from under them. That is not a surprise to anyone anymore, which is why the workers were expecting something to pop.

But what they didn't expect was so many permanent layoffs to be handed down. Not three weeks before Christmas. Not with the company still making good money. And not with the provincial government having handed over so much money to PotashCorp in recent years.

Workers in resource industries soon learn about the unpredictability of the market and what that can do to their prospects for stable employment. Many in Lanigan had been through layoffs at the mine before and that experience had taught them to expect some bad news before the end of the year.

However, that didn't make it any easier, especially when the cuts went deeper than anticipated. And especially when there is a better way. Four years - to the day - before these layoffs were announced, the Saskatchewan Party government of Brad Wall announced tax breaks for PotashCorp that it said would boost employment in the province. The cost, the government said, was to be "offset by the additional revenue generated through job creation."

On top of that, royalties paid by the potash industry in Saskatchewan fall far below international standards - just 10.8 per cent in taxes and royalties, compared with 28 per cent in Sweden, 41.7 per cent in China and 49.9 per cent in Mexico, to name a few.

Of course, the company, and its defenders in government, will say that PotashCorp can't afford to pay more without cutting jobs.

The facts are that PotashCorp is a very profitable company, with earnings of $356 million in the most recent quarter alone and a chief executive who took home almost $11 million in salary and incentives last year.

So these job cuts are not about making the company profitable, they are about making the company more profitable, with PotashCorp CEO Bill Doyle saying dividends paid to shareholders are "sacrosanct."

The sad reality is that for the people of Saskatchewan, especially the ones who made the long drive home the morning of Dec. 3, their families and their communities are sacrosanct.

Had the potash industry been paying more reasonable taxes and royalties the last few years, at least something comparable to the international standard, there would be money now to help the 440 workers who lost their jobs two weeks ago, and thereby help their communities weather this storm.

Resource industries will always have their ups and downs. Everyone involved understands that.

But with a reasonable tax and royalty structure, we can have policies and practices in place to help even out the turbulence.

Original Article
Source: leaderpost.com/
Author: Scott Doherty

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