With the price of oil and potash dropping, the boom that fuelled Saskatchewan’s budget surplus after Russia invaded Ukraine could be ending.
The party might be ending. The surge in resource prices that bestowed a windfall of so much unexpected resource revenue money on our province that even the Saskatchewan Party managed to balance the budget shows signs of declining.
The price of potash, the main driver of the sudden Saskatchewan surplus, has been dropping since November. Last week, the CEO of Saskatoon-based Nutrien Ltd., Ken Seitz, indicated the company is reconsidering its plans to ramp up potash production after disappointing first-quarter results due to dropping prices and reduced sales.
The price of potash experienced an unprecedented jump after Russia’s invasion of Ukraine early last year. That price hike has resulted in lower sales as farmers delay the purchase of fertilizer.
That trend could doom plans to expand production at Nutrien’s six Saskatchewan mines and hire hundreds. A continued decline in price could also affect the resource revenues collected by Saskatchewan that have provided the provincial government the option to pay down $2 billion in debt and deliver its first balanced budget in eight years.
For the rest of this column: https://thestarphoenix.com/opinion/columnists/phil-tank-saskatchewans-rich-resource-revenue-ride-may-be-ending