Sunday, October 17, 2010

On formalization

Last week, I noted that the agreement portion of the Saskatchewan NDP's potash plan looked to offer less protection for the province than other suggestions such as reassuming a shareholding stake (including a "golden share") and appointing board members. But since those outcomes are unlikely in the absence of both a sale and an unexpectedly strong investment review process at the federal level, the idea of an agreement is worth another look in light of PCS' pledge to the province.

Again, it's entirely true that the pledge is entirely unenforceable in its current form. But I'll correct myself in noting there's a fairly simple way to make it something more than that - if the Wall government cares in the slightest whether its terms are met.

With PCS already having made a very public show of commitment to the contents of its pledge, it surely wouldn't have much choice but to play along if the province were to seek to convert the contents of the pledge into an enforceable agreement. And since the pledge is designed to apply to PCS' operations regardless of whether or not a takeover takes place, there's no reason why an agreement would be seen as facilitating or encouraging a sale (which has been the Sask Party's latest spin on the NDP's plan).

All of which means that there's only one reason why we wouldn't see some effort to secure some commitments from PCS. And that would be...if the Sask Party prefers to leave matters like participation in Canpotex and arm's-length purchasing to chance and corporate discretion, rather than having a binding agreement in hand for the benefit of the province.

Mind you, I wouldn't rule out that possibility for a second given the Sask Party's preference for corporate interests over mere citizens. But it should be clear that the Wall government that has an obvious opportunity to turn PCS' pledge into something far more substantial. And if the Sask Party chooses not to, then it will bear full responsibility for doing nothing in the one area of a potash takeover that's entirely within the province's control.

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