CANADA

A Prairie deadlock

The privatization debate heats up in Regina

PEETER KOPVILLEM August 7 1989
CANADA

A Prairie deadlock

The privatization debate heats up in Regina

PEETER KOPVILLEM August 7 1989

A Prairie deadlock

CANADA

The privatization debate heats up in Regina

At the Shell Restaurant and Gas Bar in Raymore, Sask., the talk, as usual, was mainly about crops and rain as local farmers gathered for coffee. But even in the town of 689 people, a bitter debate now raging in the provincial legislature in Regina, 100 km to the south, has touched a nerve among local residents. By last week, arguments over the Conservative government’s controversial plan to privatize the Potash Corp. of Saskatchewan

had forced the current session of the legislature to go three weeks past its usual deadline. As far as restaurant co-owner Cheryl Reid is concerned, many local people feel that the government is just “wasting time and taxpayers’ dollars.” And that sense of dissatisfaction with the government is reflected in the government’s low standing in recent polls. In May, for one, an Angus Reid Associates poll showed that Premier Grant Devine’s Tories had the support of a mere 33 per cent of the public—21 points behind the New Democratic Party’s standing. That same poll found that 58 per cent of respondents were against the government’s privatization plans, with only 27 per cent expressing support. Said Daniel de Vlieger, dean of political science at the University of Regina: “The Conservatives are reeling.”

The Tories, who hold 38 of the 64 seats, have been embattled throughout most of the current session, which opened on March 8. In late April, the government tried to introduce four bills that would have led to the privatization of another Crown corporation, the natural

gas company SaskEnergy. The NDP responded by walking out of the house, leaving the divisional bells, which call members into session, ringing for 17 days. As a result, the Tories have not yet proceeded with the legislation. Instead, they established a three-member panel, headed by University of Regina president Lloyd Barber, to hold public hearings into the issue and report back to the cabinet in late October. As well, a string of recent controversies, in-

cluding one revolving around a controversial $4-million government grant to a company that claims to have developed a computer program to translate English into French, led to further public outcry against the government. Now, the acrimonious debate over government plans to privatize the Potash Corp. has brought the legislature to a virtual standstill and cast a broader shadow over Devine’s political future.

At issue is a pink-white mineral called potash, used as a fertilizer for potassium-deficient soil. Saskatchewan’s vast 100-billion-ton potash reserves have made the province a major world supplier of the agricultural chemical. In 1975, the NDP government of then-Premier Allan Blakeney, frustrated by what it saw as U.S. domination of the provincial potash industry—at the time, most of the province’s 10 potash mines were foreign-owned—introduced a bill to establish the corporation. The bill passed in 1976 and Potash Corp. acquired four mines from their U.S. owners.

The corporation became a valuable source of revenue for the government, earning as much

as $167 million in 1980. But in 1982, Devine’s Tories assumed power and, within a few years, the corporation looked a lot less attractive as a glut of potash on the world market caused the price of the mineral to fall to a low of $50 a ton in May, 1986, from $130 a ton six years earlier. The corporation’s fortunes tumbled— it recorded a loss of $103 million in 1986 and $28 million in 1987, while its accumulated debt soared to $662 million.

Then, last year, the financial outlook for the corporation improved as it posted a profit of $106 million. One reason for that turnaround was increased demand for fertilizer from Third World countries. The Devine government has also streamlined the corporation—a process that has included 372 staff layoffs over the past two years. And with the operation again in fighting trim, the Tories decided to look for a buyer. On April 14, they introduced Biü 20, the enabling legislation that would open the Potash Corp.—valued at about $1.2 billion—to about $400 million in public share sales.

But so far, the NDP has thwarted the government’s privatization initiative. Said opposition house Leader Dwain Lingenfelter: “We won’t let them sell off what already belongs to the Saskatchewan people.” Indeed, since the legislation was introduced, the opposition has spent more than 50 hours in the legislature speaking against the bill—and in so doing not allowing it to pass. Countering Conservative charges that they are filibustering, New Democrats point out that when Potash Corp. was first established it % took more than 100 hours of debate I before the legislation passed.

< But Devine’s government is clearly z losing patience. On July 21, Grant t}. Hodgins, deputy government house “ leader, said that invoking closure, the biggest gun in the government’s debate-limiting arsenal, “was definitely an option.” In that way, the government could call a vote on Bill 20 after just one more day’s debate. But because closure is effectively a gag on the opposition, governments generally resort to it only in extreme situations. For their part, NDP spokesmen say that they want the potash debate to be moved into the fall legislative session, when the report on SaskEnergy is due and when the whole issue of privatization can be discussed. And Lingenfelter added that the NDP is devoted to fighting the Tories every step of the way. “It won’t be pretty,” he said.

Still, some observers say that Devine, faced with his low standing in the polls, may have no option but to be firm. De Vlieger noted that the widespread perception that the Conservatives are out of control “could kill this government.” And with a provincial election expected sometime within the next 18 months, the Tories must regain not only control, but also the trust of the Saskatchewan electorate.

PEETER KOPVILLEM with PATRICK McMANUS in Regina

PATRICK McMANUS