Phased-Elimination of Mineral Exploration and Development Tax Credit Disappointing
OTTAWA, March 29, 2012 /CNW/ - The Mining Association of Canada (MAC) commends Ottawa's commitment to modernize federal environmental review processes, highlighted in today's federal budget announcement, while expressing disappointment regarding the announced phased elimination of the Mineral Exploration and Development Tax Credit.
"Today's budget will help expedite over $140 billion in new investment in Canada's mining sector. Canada is in global competition for mining investment and an effective and efficient regulatory regime can provide a competitive advantage over other jurisdictions," stated Pierre Gratton, MAC's President and CEO. "Legislative reforms announced in today's budget promise to modernize Canada's environmental review and permitting processes. This will accelerate investment, job growth and enhance Canada's international competitiveness and position as a mining superpower."
MAC has estimated that mining investment in Canada could total upwards of $140 billion over the next five years. Strong commodity prices driven by growing demand in countries such as China are creating opportunities for new mine development and major mine expansions not seen in many years. Canada's mining sector, long recognized as a global leader, has the capacity to take advantage of this opportunity.
Today's budget committed, in particular, to further improvements to the Canadian Environmental Assessment Act, building on initial reforms made in 2010. Of special note is a commitment to introduce the concept of "equivalency" in federal environmental assessments, whereby the federal government can accept a comparable provincial environmental assessment as its own. This will eliminate the need for two, duplicative reviews for a single project, saving taxpayers, citizens and proponents time and resources.
Another important measure outlined in the budget is government's commitment to set fixed timelines for project reviews and assessments. This will add clarity and certainty to processes which, in the past, have been protracted and highly varied from one project to another. MAC also applauds the government's commitment to renew funding for the Major Projects Management Office (MPMO) - an important instrument in the responsible and efficient development of Canada's natural resources.
The 2012 budget document also commits to a consistent and coordinated approach to Aboriginal consultation as a component of project reviews. Many Aboriginal communities in Canada are key partners with mining companies. A more systematic approach to consultation can help contribute to more mutually-beneficial relationships between Aboriginal communities and mining companies, and reduce uncertainty and the length of time on project reviews.
Budget 2012 also announces a phased-elimination of the Mineral Exploration and Development Tax Credit. This tax credit was introduced in 2003 when the Resource Allowance was eliminated. "While we appreciate the grandfathering provisions and the phased-in approach to eliminating this tax credit, we are disappointed to see its elimination," stated Gratton.
MAC also commended the federal government's decision to include the Mineral Exploration Tax Credit (METC) in the 2012 budget. This measure is an important financial instrument for Canada's junior exploration sector. For almost a decade, Canada has captured the world's largest percentage of global exploration investment, and the METC is one of the reasons for this.
"Overall, today's budget is good news for Canadian mining and for many communities across Canada that rely on our sector to deliver jobs, business opportunities and other benefits," added Gratton.
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.
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