A study by Deloitte and E&B Data foresees much higher tax revenues,
strong job growth and a larger contribution to GDP
MONTREAL, Sept. 20, 2012 /CNW Telbec/ - The contribution of Québec's
mining industry to government revenues and economic activity in general
is expected to increase sharply in the coming years. This is one of the
conclusions of a study by Deloitte and E&B Data, titled Impacts économiques et fiscaux des sociétés minières au Québec [Economic and tax impacts of mining companies in Québec], which was
"Québec should benefit from mine exploration and operation activities
through the companies' tax remittances to government, direct and
indirect job creation and retention, and a significant contribution to
the province's gross domestic product. All these factors contribute to
wealth creation for Québec society," commented Martin Granger,
Associate Leader, Québec Energy and Resources sector at Deloitte.
"This study was performed at a time when the mining industry is being
called on to play a growing economic role, which raises legitimate
questions about its contribution to collective wealth creation. As far
as we know, this is the first study that measures the combined
contribution of exploration, operation and investment activities for
the mining projects that have been announced," said Jean Matuszewski,
President of E&B Data.
Picture for the year 2010
The main findings of the analysis conducted for the year 2010 are as
In terms of expenditures for exploration, operation and investment, the
activity of mining firms within Québec generated more than $1.3 billion
in revenue for the federal and provincial governments in the year 2010
Mining royalties and corporate income taxes (excluding tax credits)
resulting from mine extraction and production activities totalled
Operating mining companies paid mining royalties and income tax
amounting to 39.9% of their adjusted pre-tax net book profit, compared
with the 29.9% income tax rate applicable to the great majority of
Other federal and provincial tax revenues (employees' personal income
taxes, sales and incidental taxes) amounted to close to $993 million.
The mining industry generated $5.3 billion in expenditures in Québec
The expenditures supported approximately 19,500 jobs in mines, work
sites and exploration sites. Close to 20,000 indirect jobs were created
or maintained within networks of suppliers based in Québec. That is,
for each direct job, one indirect job was supported.
The expenditures generated a gross domestic product (GDP) of
$3.6 billion, or around $450 per Québec resident.
Projected picture for 2011 to 2015
For the coming years, the mining industry has announced more than
$30 billion in investments in Québec alone. This far exceeds the amount
of investments announced in other industries. The study by Deloitte and
E&B Data particularly sought to measure the impact of this business
surge on overall economic activity and tax revenues. Following are
highlights from their projection analysis:
On average, planned mining activity will involve yearly expenditures of
$9.6 billion (compared with $5.3 billion in 2010).
The expenditures will generate yearly federal and provincial tax
revenues averaging close to $1.5 billion from employees' personal
income taxes, and sales and incidental taxes (up 50% from 2010). In
addition to this amount are mining royalties and corporate income tax,
which were not estimated for the projection analysis.
Expenditures by the mining industry contributed $3.6 billion to GDP in
2010. This will rise to a yearly average of $5.6 billion for the years
2011 to 2015.
The total number of jobs supported by the mining industry will increase
from 39,500 in 2010 to a yearly average of 63,000 for the years 2011 to
2015, a rise of close to 60%.
The study by Deloitte and E&B Data was commissioned by Minalliance. It
was conducted in accordance with standard procedures and best
practices. The complete study report is available online in the
Publications section of the Minalliance website (http://www.minalliance.ca/pdfs/deloitte_ebdata_2012.pdf)
"Through this study, we now have a better picture of the actual
contribution of the mining industry to government tax revenues and the
Québec economy in general," concluded Normand Champigny, Chair of the
Board of Directors of Minalliance. "This contribution will increase
significantly, with an impact notably on tax revenues and job creation.
All this is the result of the many investment projects planned to be
put in place by 2015, on the assumption that investment rules remain
stable particularly for royalty payments."
Deloitte, one of Canada's leading professional services firms, provides
audit, tax, consulting and financial advisory services through more
than 8,000 people in 56 offices. Deloitte operates in Québec as Samson
Bélair/Deloitte & Touche s.e.n.c.r.l. Deloitte & Touche LLP, an Ontario
Limited Liability Partnership, is the Canadian member firm of Deloitte
Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte
Touche Tohmatsu Limited, a UK private company limited by guarantee, and
its network of member firms, each of which is a legally separate and
independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche
Tohmatsu Limited and its member firms.
About E&B Data
E&B Data is an independent economic analysis company specializing in the
industrial sector and more particularly in heavy industry. It operates
both in Canada and abroad. Among its clients are private investors,
industrial associations, financial institutions, governments and trade
unions. Through CAPEX-online, for more than 10 years E&B Data has done
real-time tracking of industrial investment activities in Canada. It
regularly prepares studies on the economic and tax impact of
large-scale industrial investments. For more information, visit us at http://www.ebdata.com/.
Minalliance is an organization that brings together the Quebec Mineral
Exploration Association (AEMQ) and the Quebec Mining Association (AMQ),
as well as companies involved in mining exploration, operation and
services, equipment suppliers and financial institutions. Minalliance's
mandate is to raise public awareness of the mineral industry and
highlight its contribution to the growth of Quebec and its regions,
integrating economic, social and environmental aspects.
For further information: