Premier Brad Wall has sent a letter to Potash Corp. of Saskatchewan (TSX:POT) executives blasting them for cutting jobs while preserving the dividend paid to shareholders.
The Saskatoon-based company said Tuesday that it is laying off 1,045 people to reduce its workforce by about 18 per cent, with the biggest hits in its home province of Saskatchewan.
Wall is upset because PotashCorp CEO Bill Doyle said the fertilizer company's dividend is "sacrosanct" and won't be touched.
"This can only mean that the interests of shareholders were protected while the interests of employees here in Saskatchewan and elsewhere were sacrificed," Wall wrote in the letter dated Dec. 4.
About 440 people will lose their jobs in Saskatchewan. Most of those positions are at PotashCorp's Lanigan division, where one of two mills is to suspend production by the end of the year, and at its Cory division where production will be reduced. Cuts will also be made at the Saskatoon headquarters.
About 130 people in New Brunswick also will be out of a job. The rest of the cuts are to occur outside Canada, including more than 435 in the United States.
PotashCorp says the decision stems from soft demand for potash and phosphates, two major types of crop fertilizer.
Wall said tough times shouldn't be shouldered by workers alone.
"For the company to make that announcement that they made and then for Mr. Doyle to indicate that the dividend policy is unchanged and 'sacrosanct,' that causes me great concern," the premier said Thursday.
"All the stakeholders in the company, should share in the down times -- not just workers, not just sub-contractors, but shareholders."
In the letter to PotashCorp chairman Dallas Howe, Wall asks the company to revisit its dividend policy and Tuesday's decision "with a view to considering whether the number of layoffs could be mitigated."
"Mr. Doyle has his shareholders. I have mine and they're the people of the province, who ... own the potash in the first place."
Potash is mined and used primarily as an ingredient in fertilizer. Saskatchewan is the largest producer in the world, accounting for approximately 30 per cent of total production. The province has almost half of the globe's potash reserves.
Wall has been one of PotashCorp's biggest defenders. In 2010, he helped lead opposition to a takeover attempt by BHP Billiton.
Wall vehemently opposed the deal on the grounds that Saskatchewan could lose billions in revenue from taxes and royalties. The premier painted the proposed takeover as anti-Canadian and said the country's strategic interests would be at risk if the province sold most of its potash industry to an international company.
Ottawa ultimately rejected the takeover after concluding it failed to benefit Canada.