Municipal Potash Tax Sharing

The Municipal Potash Tax Sharing Administration Board is established in accordance with section 3 of The Municipal Tax Sharing (Potash) Act. The board consists of:

• Two members nominated by the Saskatchewan Association of Rural Municipalities (SARM); one must be an official of a rural municipal council and at least one must be on SARM's executive.
• One member from the Saskatchewan Urban Municipalities Association (SUMA) who must be an official of an urban municipal council or on SUMA's executive.
• One member from the industry association (Saskatchewan Mining Association).
• One member nominated by the Minister.

The board administers the tax sharing program, with the duties and responsibilities to:

• Establish the potash mine municipal mill rate.
• Determine the potash tax sharing distribution.
• Conduct audit and prepare the annual report.
• Provide administration of the tax sharing process.

Mill Rates

Each year, the board sets the municipal potash tax sharing mill rate for each potash mine based on the formula specified in the Act. The rural municipalities in which the potash mines are located apply the municipal mill rate established by the board to the potash mine taxable assessments within their municipality and remit the potash property taxes to the board.

The municipal mill rate that applies to potash mines is not the same as the mill rate that applies to all other properties in the municipality where the mine is located. Instead, the mill rate is established by the board in accordance with the Act.

The board first determines the proportion of each area a particular rural municipality has within a 32.2 kilometre radius of the potash mine shaft and head frame. The number of square kilometres for each rural municipality is multiplied by the actual mill rate of that municipality for the immediate preceding year. The sum of the resulting figures for each rural municipality is divided by the area (total square kilometres) of the municipality within the 32.2 kilometre radius. The result is the municipal mine mill rate to be levied by the taxing rural municipality. See below for an example of mill rate calculation for a Potash Mine’s Area of Influence – Mine A.

Every four years, there is a general revaluation of all assessment values in the province to establish a new "base date" (visit the Saskatchewan Assessment Management Agency to learn more). In a revaluation year, the board adjusts the mill rate so the rural municipalities within the area of influence raise the same total tax revenue from the potash mine as in the preceding year.

Potash Tax Sharing Areas of Influence

Currently, there are 10 potash tax sharing areas of influence: Belle Plaine, K+S, Rocanville, K3, Lanigan, Colonsay Mine, Patience Lake, Allan Mine, Vanscoy and Cory.

Table 1: Municipal Composition of the Potash Tax Sharing Areas of Influence

* NOTE: The Village of Yarbo was restructured into the Rural Municipality of Langenburg on January 1, 2026.

Municipal potash tax sharing is a significant source of revenue for most rural and urban municipalities within the 10 potash tax sharing areas of influence (see Table 1). The board collects the potash mine property taxes remitted by the taxing rural municipalities and distributes these funds among eligible rural and urban municipalities within the area of influence in accordance with the Act and section 7 of the Regulations. All rural and urban municipalities within an area of influence of a potash mine are eligible for sharing in the municipal property tax revenues from potash mines. Based on the point calculation, urban municipalities, which include cities, towns, villages and resort villages, with a population of 5,000 are not eligible to participate in potash tax sharing.

Only the municipal portion of property taxes on potash mines collected within the area of influence is shared among eligible rural and urban municipalities. The education portion is paid to the province and treated the same as all education property tax.

Potash Tax Sharing distribution is calculated as follows:

Rural/Urban Distribution

Within each tax sharing area, rural municipalities are allocated 90 per cent of the funds collected and remitted to the board by the taxing rural municipality. The remaining 10 per cent is allocated to the urban municipalities. Within each mine's area of influence, the proceeds are shared among eligible rural and urban municipalities based on two different point systems.

Point Calculation for Rural Municipalities

Each rural municipality within the respective area of influence for any potash mine is given points:

• Four points for each square kilometre of territory of the municipality that lies within a 16.1 kilometre radius of a potash mine shaft and head frame or load out and production facility.
• One point for each square kilometre of territory between a 16.1 and 32.2 kilometre radius.

When new potash mines begin production, the area of each rural municipality in which the mine is located shall be multiplied by six for the first year, five in the second year and then four for each following year. This is done to address the change in tax status for the host municipality and account for the municipality's expenses before the mine became operational.

These points are then adjusted to consider the mill rate in the municipality in the previous year. The adjusted points are summed for all rural municipalities within the area of influence, and each municipality receives a share of the potash tax sharing payments proportional to its share of the adjusted points.

Point Calculation for Urban Municipalities

Each urban municipality within the 32.2 kilometre area of influence for any potash mine is assigned points based on the population of the municipality and its location within the area of influence. If the municipality is within a 16.1 kilometre radius of the potash mine shaft and head frame or load out and production facility, it receives four times as many points as a municipality of the same population that is between a 16.1 and 32.2 kilometre radius. If only part of an urban municipality lies within the 16.1 kilometre radius, the entire urban municipality is considered to be within the 16.1 kilometre radius.

The points are determined for each individual municipality and are totaled for all eligible municipalities within the area of influence. Based on the distribution, each municipality receives a share of the available potash tax sharing payments in proportion to its share of the total points.

The points formula is as follows:

Northern municipalities are not recipients of potash tax sharing, as there are no potash mines within 32.2 kilometres of any northern community. Resort villages became eligible to receive payment in 2019.

In accordance with the Act (section 3.2), the board appoints a secretary-treasurer to conduct its business. The board sets a percentage of potash property taxes required for its general administration and expenses each year. Typically, the board's remuneration and expenses are paid from the potash mine property taxes remitted to the board. The Regulations allow the board to withhold up to 0.5 per cent to a maximum of $25,000 of the potash property taxes remitted for its expenses.

In accordance with provisions of the Act, the board prepares an annual report for the prior fiscal year showing names of rural municipalities submitting payments to the board and eligible municipalities participating in the tax sharing program. The board also prepares and submits to the Minister of Government Relations a financial statement for the preceding fiscal year. The books and records of the board are audited annually and are subject to Treasury Board approval.

Annual financial statements of the board including its financial position, municipal property taxes collected from potash mine assessments and schedule of tax sharing payments to each municipality are available using the links below.