Government Policy and the Potash Industry in Saskatchewan

Some aspects of the policies developed by Saskatchewan with respect to the provincial potash industry are discussed. The provincial potash policy was developed initially to deal with problems associated with an excess supply and consisted of output restrictions and floor prices. Changing market conditions led to a situation of rapidly increasing prices and revenues for the potash producers, and the nature of the policy problem switched from one of stabilizing the industry to one of levying increased taxes to enable the government to capture a portion of the revenues. The first part of the paper explains why a provincial potash policy was developed, the problems it attempted to deal with and how. The second part is an attempt to examine, from a public policy point of view, the impact of these policies on the potash industry.