Saskatoon gets more money out of PotashCorp for water drawn from river
City hikes annual fee to over $3,000 from previous 50-year fixed rate of $150
What a difference 50 year makes.
The City of Saskatoon has hiked the lease rate paid by PotashCorp for its decades-spanning practice of accessing city-owned land to draw water from the South Saskatchewan River.
The rate, $150 a year, hasn't changed since 1964, when then-mayor Percy Klaehn and the company, then called Potash Company of America, negotiated the initial 50-year access deal.
Ever since, PotashCorp. has piped the water from a location close to the Saskatoon weir, and along a CP rail line right of way, to its Patience Lake solution mine, located about 16 kilometres east of the city.
New deal
The lease came up for renewal in 2014, and the two sides are now ready for city councillors to approve a new, 25-year lease on Monday.
"It was never in doubt. We were always going to do this lease," said Frank Long, the city's director of Saskatoon land.
"It was just a matter of ironing out a few of the details along the way and building in some flexibility for the project that will potentially take place in close proximity to it."
The project in question is the proposed hydropower station at the weir, which would be a joint venture with the Saskatoon Tribal Council.
If that project goes ahead, PotashCorp.'s water would need to be drawn from an alternative site on the river.
Access fee goes up 20-fold
Otherwise, the big difference in the new lease is the higher annual lease rate charged to Potashcorp: $3,089, which will go up every year by 2.5 per cent.
That's more than just an inflated version of the original $150 fee, which is $1,185.45 in 2017 dollars, according to the Bank of Canada. It also takes into account a (now-legally-mandated) market valuation of the riverbank parcel.
"Obviously the value of riverbank land has gone up significantly since 1964," said Long. "That's essentially what we've done with the renewal here."
Over 25 years, the deal would generate $107,000 for the city.
Asked why the lease took three years to negotiate, Long said, "It might not have been at the top of either party's priorities list knowing that it was never in doubt; we were going to do it."
The water supply was not interrupted during the three-year period between leases, he added.
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