Harper Announces Support For Resource Development Through An Extended And Enhanced Mining Tax Credit
The development of Canada’s natural resources creates jobs, fuels growth and promotes prosperity across the country. The mining sector is particularly critical to Canada’s economy. Canada is one of the world’s leading mining nations and has had the largest global share of spending on exploration for non-ferrous minerals every year since 2002. About 380,000 Canadian jobs are in the mining and mineral producing industries.
But the mining sector’s economic impact is felt far beyond direct employment. The mining sector has significant indirect employment and investment effects.
Canada has one of the largest mining supply sectors globally with more than 3,400 companies supplying engineering, geotechnical, environmental, financial and other services to mining operations.
One survey found that 913 companies in Ontario alone serve as mining suppliers. These companies provide 68,000 additional jobs across the province, and generate 1 percent of GDP. Mining supplier jobs can be found in communities across Canada, including in North Bay. A study by the City of North Bay identified more than 65 local businesses in the mining supply and services industry. This sector employs nearly 3,000 people in North Bay.
This also does not account for the importance of the mining sector for Canada’s financial services sector. Toronto Stock Exchange (TSX) and TSX Venture Exchange were home to 57 percent of the world’s publicly-listed mining companies and traded more than $200 billion of mining stock in 2013, and accounted for 46 percent of global mining equity capital that year.
The mining industry has tremendous potential in Canada’s Northern and remote communities. Many of these projects – such as the Ring of Fire in Northern Ontario or Plan Nord in Quebec – could represent economic game-changers for their communities and regions and the people who live within them.
Unfortunately, many potential mining projects in Northern communities face high costs due to their remote location and distance from transportation routes and supply centres.
As one industry report notes: “The higher cost of exploration and mining in remote and Northern Canada is reducing the competitiveness of those regions as a destination for mining investment. Without creative action to address these challenges, the industry may not be able to sustain the same level of economic benefits for future generations of Canadians.” (Leveling the Playing Field, page 6.)
The mining sector estimates that the average costs of remote and very remote projects (those located more than 50 km from a supply route) are 2.27 times more expensive than the average costs of non-remote projects.
A re-elected Harper Government will implement new measures to promote mineral exploration and create jobs, including in Northern and remote communities.
First, a re-elected Harper Government will extend the Mineral Exploration Tax Credit for three years, beginning in 2016-17, to continue to support mining exploration and investment. The Harper Government has supported the 15 percent Mineral Exploration Tax Credit since 2006 to help companies raise capital by providing an incentive to investors in flow-through shares issued to finance mineral exploration. The credit is in addition to the deduction provided to the investor for the exploration expenses “flowed through” by the company that issues the shares.
Since 2006, the Mineral Exploration Tax Credit has helped mining companies raise over $5.5 billion for exploration. In 2013, more than 250 companies issued flow-through shares benefitting more than 19,000 individual investors.
Second, a re-elected Harper Government will introduce an enhanced 25 percent Mineral Exploration Tax Credit for Northern and remote projects to help support potential mines that face high costs because of their remote location and distance from transportation routes. The new Northern and remote enhancement would apply to projects that are located in Canada’s territories and/or are more than 50 kilometres away from an all-weather road or service centre, including areas like the Ring of Fire in Northern Ontario and Plan Nord in Quebec.
The total cost of the extended Mineral Exploration Tax Credit and the enhanced credit would be $60 million per year beginning in 2016-17.
The Liberals and NDP have irresponsibly attacked the Canadian resource sector and have opposed job-creating projects and tax credits that promote mineral exploration.
Justin isn’t capable of managing Canada’s $1.9 trillion economy. He has voted against the Mineral Exploration Tax Credit and openly opposes a number of critical projects that would develop our resources responsibly while creating jobs for Canadian workers. He simply doesn’t recognize the importance of responsible natural resource development to Canada’s economy.
Thomas Mulcair and the NDP are ideologically opposed to resource development and the jobs that result from it. Mulcair and the NDP have voted against the Mineral Exploration Tax Credit. When it comes to resource development, Mulcair stands with anti-development activists who want to halt all development no matter what the consequences. The NDP’s economic policies would kill jobs and hurt Canada’s rural and Northern communities.
 Companies involved in the early development of the “Ring of Fire” mining camp have already raised capital using full-through shares financing for their exploration work. See: https://www.nrcan.gc.ca/mining-materials/publications/8802#c2a.