Insider provides history of resource development in Saskatchewan
Potash and politics have long been intertwined in Saskatchewan.
A recent book written by a man with a ringside seat to the industry’s development outlines the extent of that relationship.
John Burton, a former farmer, civil servant and federal MP, explains in the book the challenges involved in developing a viable potash industry following the mineral’s discovery in Saskatchewan in 1942.
The province was still reeling from the Great Depression and drought, he notes in Potash: An Inside Account of Saskatchewan’s Pink Gold, and the notion that the mineral could save it was appealing to the then-CCF government.
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In 1951, Burton had just graduated from university. Degrees in agriculture and economics led him to the Saskatchewan government’s Industrial Development Office.
“The idea was to get something to happen,” he said in an interview in his Regina home.
“They knew there was a substantial resource down underground.”
Imperial Oil made the initial discovery in the Radville area.
Naturally occurring in most Sask-atchewan soil, potash fertilizer would soon be in demand by a post-Second World War world looking to increase food supply.
Burton said the government was interested in developing the industry but faced a lack of knowledge on how to proceed.
“Public ownership, complete or partial, was favoured initially, but by 1950, the social democratic government in power had to accept the reality that only the private sector was equipped to develop the resource,” he wrote.
Three companies tried but failed to establish viable mines in the 1950s, stymied by underground flooding in water-bearing formations under high pressure. Burton said it took eight years to dig an 1,800 foot shaft at a site near Unity, which was about half-way to the potash.
“They hit the Blairmore sands and that was the end of the game,” he said.
Finally in 1962, International Minerals and Chemical Corp. began production at Esterhazy after the main shaft flooded twice and a German company was called in to help.
“That was a big day in 1962 when the first mine opened,” Burton said.
“It was important to Saskatchewan to recognize how valuable the resource was and what a difference it could make to this province.”
Agriculture always took the economy on a roller-coaster ride, and re-source development was seen as a way to stabilize it.
But two years later, Ross Thatcher’s Liberal government took office with the promise of hastening economic development.
“There was some oil and steel de-velopment that were helping, but we were still left in the dust compared to what was happening in Alberta at that time,” Burton said.
Potash development became the centerpiece of Thatcher’s campaign, and the result was 10 more mines and significant overproduction.
Some mines were in danger of closing, and the government blamed the companies for failing to manage properly, Burton said.
The government introduced pro-rationing, but that was hard to manage and the companies didn’t like the low production quotas.
When the NDP’s Allan Blakeney came to power in 1971, he wanted more money from the companies for provincial coffers and a look at their books. He also wanted the government to participate in the industry.
“The companies thought he was completely out to lunch,” Burton said.
“They were not prepared to tolerate or live with that at all. The oil and uranium companies had learned to work with government, but the potash companies were a different breed.”
Burton and a team of civil servants spent months working in a basement office of the Saskatchewan legislature on a plan to take over the industry.
“We worked in utmost secrecy,” he said. “None of us would enter or leave the premises at the same time.”
The plan was announced in the 1975 throne speech to gasps from the opposition Liberals.
Burton, who sat on the board of the Potash Corp. of Saskatchewan from 1975-82, said the move to public ownership was the right one. Markets were strong and the benefits accrued to the people who owned the resource.
However, those glory days didn’t last long.
Burton said PCS began to falter under the Progressive Conservative government, which was elected in 1982, and selling it “for a song” to private interests was the beginning of the end.
Roy Romanow’s NDP government sold the province’s remaining shares in the 1990s because it needed the cash.
“The profits and benefits of potash production now are going to outside investors for the most part,” Burton said.
He has watched more recent developments through his historical lens. He credits Saskatchewan Party premier Brad Wall for stopping the potential takeover of PotashCorp by BHP Billiton.
“I think there were probably people in the government who realized if (BHP) got PCS Inc. and the mine in Jansen, they would have overwhelming power,” Burton said.
BHP is building a conventional mine at Jansen, although it hasn’t officially been approved, and K+S is building a solution mine near Bethune. Other companies are also planning mines.
Burton said those plans, along with expansions at other mines, could once again lead to overproduction.
“Are we going to learn the lessons of history?” he said.
“There was massive overdevelopment in the ’60s, and the province paid the price.”
Burton’s book is published by University of Regina Press and is available at bookstores.
