New royalty regime would stall province's economic growth and industry's
OTTAWA, March 25, 2013 /CNW/ - As the Quebec government prepares to
table a new mining tax regime this week that would significantly
heighten mining taxes and royalties, the Mining Association of Canada
(MAC) is warning that a new royalty regime would worsen the province's
investment appeal with detrimental economic effects to Quebec and
Canada's economy as a whole.
It is expected that this new proposed tax regime would put in place two
new levies - a five per cent tax on the gross value of annual
production, as well as a 30 per cent royalty on "super-profits". Quebec
is already a high tax jurisdiction in many respects, and as recently as
2010, saw the former government raise the taxes on profits to 16 per
cent from 12 per cent.
"The new regime would tarnish Quebec's reputation as a mining-friendly
jurisdiction for investment," said Pierre Gratton, MAC's President and
CEO. "Moreover, from a global mining company standpoint looking to
build its next project, I am concerned that there will be little
distinction between Quebec and the rest of Canada, thus harming the
country's reputation as a whole."
Competition for mining investment is fierce on a global scale. Canada
competes against other global mining countries that are equally touted
for having rich mineral deposits, such as countries in Europe, Latin
America and Africa. With so many other countries at play, a mining
company will simply overlook Canada for another mining jurisdiction
considered more competitive from an investment standpoint. The
ramifications would be vast, translating into a significant loss of
royalties to the government, well-paying jobs for Canadians and the
significant spin-off business opportunities that a mine gives to an
"This government's approach reveals a limited knowledge of the sector
and the global reality in which it operates today," added Gratton.
"The actions of this government go against decades of sound economic
policies advanced by Quebec governments of all political stripes,
including the Parti Quebecois."
The Association minière du Quebec (AMQ) has been vocal within the
province to sound the alarm of the negatives consequences that would
ensue if the new royalty regime, as proposed, takes hold. According to
the AMQ, the current level of taxation stemming from mining activity
already provides significant economic benefits to the majority of
"The hikes are positioned as just penalizing the mining industry,
whereas in reality, they put into peril the livelihoods of thousands of
families in the province who rely on the industry for employment - both
direct and indirect jobs. The fact is, companies will simply find
somewhere else to mine," stated Josée Méthot, President of the AMQ.
The Mining Association of Canada is the national organization for the
Canadian mining industry. Its members account for most of Canada's
production of base and precious metals, uranium, diamonds,
metallurgical coal, mined oil sands and industrial minerals and are
actively engaged in mineral exploration, mining, smelting, refining and
semi-fabrication. Please visit www.mining.ca.
SOURCE: Mining Association of Canada (MAC)
For further information:
(613)233-9392 x325 or email@example.com
(613) 233-9392 x225 or firstname.lastname@example.org