Monday 10th December 2018

Resource Clips



Miners welcome Ottawa’s fall fiscal update

by Greg Klein | November 22, 2018

A five-year extension to the Mineral Exploration Tax Credit was just one reason why industry praised this week’s federal government Fall Economic Statement. Still, the credit won most of the praise.

Ottawa’s fall fiscal update welcomed by miners

As an important enhancement to the flow-through benefit, the first multi-year extension in the tax credit’s 18-year history had long been advocated by the Prospectors and Developers Association of Canada, the group stated. The renewal will “provide greater certainty and boost confidence for investors, and signals government’s appreciation of the importance of our junior exploration sector,” said PDAC COO Lisa McDonald.

The credit will encourage longer-term planning, giving companies greater assurance “to finance not only the current year of their exploration programs, but also any subsequent exploration necessary to fully scope the mineral potential of a particular property,” the group added.

Echoing those sentiments, the Mining Association of Canada also praised other benefits announced by the Liberal government:

  • The Accelerated Investment Incentive, allowing miners to write off three times the eligible cost of newly acquired assets in the year of purchase

  • The immediately write-off of the full cost of specified clean energy equipment

  • An $800-million/five-year boost to the Strategic Innovation Fund to support businesses

  • A new Export Diversification Strategy aiming for a 50% increase in overseas exports by 2025

  • A proposed $13.6-million funding increase to the Multimodal Integrated Passenger-Freight Information System

  • Enhancements to the Canadian Trade Commissioners Service, including a three-fold expansion to the CanExport program that would help Canadian businesses enter new markets

  • Proposals to streamline regulations, including the establishment of a dedicated External Advisory Committee on Regulatory Competitiveness

  • $773.9 million over five years to improve national trade corridors

Canada’s tax regime is a major determinant of its attractiveness for domestic and international mining investment. MAC appreciates the government’s recognition of the need to improve Canada’s investment competitiveness in mining.—Pierre Gratton,
Mining Association of Canada

MAC stated that Canada’s tax regime lost ground to international competitors when previous budgets reduced or eliminated several direct and indirect mining-related tax credits, while recent American reforms further hindered Canada’s mining tax competitiveness.

“Canada’s tax regime is a major determinant of its attractiveness for domestic and international mining investment,” commented MAC president/CEO Pierre Gratton. “MAC appreciates the government’s recognition of the need to improve Canada’s investment competitiveness in mining.”

While announcing its fiscal update, Ottawa said Canada’s 3% economic growth excelled other G7 nations last year and the country “expects to remain among the fastest-growing economies this year and next.”

The Liberals also project a federal deficit decline from $19.6 billion to $11.4 billion by 2024. The government also forecast a continuous drop in federal debt to GDP, falling to 28.5% by 2024.

Canada’s mining industry employs 634,000 people and contributes $96.5 billion annually to the federal GDP.

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