Mining companies in Quebec face one of the highest tax burdens in Canada
MONTREAL, Sept. 7, 2011 /CNW/ - An independent study conducted by PwC on provincial taxation of mining companies in Canada reveals that nearly
41% of mining profits in Quebec are paid as taxes and royalties,
including the federal component, while the Canadian weighted average
based on the value of output is 36.8%. Quebec ranked 11th back in 2007, when it was the lowest taxing province; today, it ranks
"Amid the ongoing lively debate over mining company taxation in Quebec,
a number of the study's conclusions are relevant when it comes to
taking a new look at Quebec's tax regime, particularly income tax and
the mining tax", said Nochane Rousseau, Leader‚ Mining Industry
Services and PwC's Plan Nord Initiative.
In Canada, the overall tax burden (combined federal/provincial) in all
jurisdictions fell between 2007 and 2011 (going from weighted average
based on the value of output of 40.7% to 36.8%), with the exception of
Quebec, where it rose from 35.4% to 40.9%.
In Quebec, 41% of mining profits are paid as taxes and royalties,
including the federal component. Quebec has the third-highest overall
tax burden (combined provincial/federal) in Canada.
Among the four main mineral-producing provinces, (Saskatchewan, British
Columbia, Ontario and Quebec), Quebec places the highest tax burden on
As regards the provincial tax burden, Quebec rose from 11th place (16.7%) in 2007 to fourth place (25.9%) in 2011.
Quebec levies the second highest mining duties over a mine's useful
Putting things in perspective, Mr. Rousseau said: "The review of
Quebec's mining duties regime has had a significant impact on
companies' tax burdens. Quebec's mining taxes are now among the highest
in Canada. The mining duties collected by the provincial government
over a mine's useful life are also among the highest. We believe that
the results of this study, which takes an objective and independent
look at the topic, deserve to reach a wider audience."
The study summarizes the main features of tax regimes in Canada as they
pertain to income taxes and mining taxes. Quantitative examples are
provided to illustrate how these regimes are applied. The study also
includes all of the tax policies affecting mining companies:
Federal income tax
Provincial income tax
Provincial capital tax
Provincial mining tax, including the recent changes to Quebec's mining
For further information on the study's conclusions, please consult the
Industries/Mining section of PwC's website (www.pwc.com/ca) or download the study.
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