Wall of Silence on Canpotex

Saskatchewan’s newspapers reported today that BHP Billiton intends to sell the province’s potash outside of Canpotex, the marketing board that helps to maximize the price for which Saskatchewan potash is exported offshore.

BHP executive Tim Cutt stated, “We will not market through Canpotex. We talked to the premier (Brad Wall) about that. He understands that.”

Concerns that BHP would undermine Canpotex were a major objection to its takeover bid for the Potash Corporation of Saskatchewan. Indeed, Premier Wall’s speech rejecting BHP’s proposal invoked “Canpotex” ten times in eight pages, as a source of pricing power for Saskatchewan’s resource and of jobs in British Columbia’s ports (as opposed to BHP’s plan to use the port of Vancouver, Washington).

It seems strange that Wall would now be happy to accept BHP’s plans to circumvent Canpotex. Maybe BHP is willing to develop the Jansen Lake mine only if it can bypass this agency? Perhaps the benefits of developing this new mine outweigh the costs of eroding Canpotex’s pricing power? If Wall has come to that conclusion, he should say so rather than allowing BHP to speak for him.

Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.

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