How potash is reshaping Saskatchewan’s future

The takeover of Potash Corp. by a foreign company looks like corporate colonialism to some, but others are seeing immense profits buried beneath the prairies

Potash is not the sexiest of topics. Until recently most Canadians were unaware that it’s a key ingredient in fertilizer, or that the world’s largest extractor of it is Saskatchewan’s Potash Corp., a company currently the subject of a massive $40-billion takeover bid from Australia’s BHP that’s shaking up Canadian markets.

Writing for cbc.ca, Don Pittis says that although it's now Canada’s sixth-largest company, “according to current business wisdom, Potash Corp. should not have succeeded” because it was established as a Crown corporation. These days, government-owned companies are distrusted by both the market-oriented right and the corporate-wary left, but Potash’s success “reminds us that despite the current ideological tide against these kinds of entities, government corporations remain part of our economic tool chest.”

The company’s sale to a foreign company is a cause for real concern, according to the Globe and Mail’s Jeffrey Simpson. It’s proof that “Canadians are a rentier people” who sell rights to our natural resources to the highest bidder, he laments, and that our business class “is made up of artists whose prime ambition seems to be to build companies to a certain level and then sell them to foreign bidders” for personal profit.

The Toronto Star warns that the takeover could hurt Canadians. “Foreign companies that acquire Canadian firms don’t always keep their commitments,” cautions a recent editorial, citing the fiascos of Stelco and Inco, both of which cut workers after being bought by foreigners. Ottawa has the ability to effectively regulate these takeovers, and that “means keeping production and jobs in Canada, employing Canadian managers, and requiring the new owner to contribute to the community.”

The Starphoenix is cautiously optimistic, however. After all, Saskatchewan is the “Saudi Arabia of potash” at a time when Asia’s booming agriculture will ensure it’s a valuable commodity for decades. The province has a chance to profit immensely, but steps need to be taken “to ensure Saskatchewan develops its resources with the long-term, as well as the short-term, in mind.” In other words: bring on the boom times, just don’t blow it all in one place.