Ottawa’s five-year renewal of the Mineral Exploration Tax Credit (METC) received a thumbs-up from the Mining Association of Canada (MAC).
As announced in the government’s Fall Economic Statement, METC is a 15 per cent non-renewable tax credit used by junior mining companies to raise exploration funds through flow-through shares.
Because of its effectiveness, industry people have lobbied for a multi-year commitment by the government since exploration programs tend to stretch out for years. Many exploration programs have been funded through the program since its inception in 2000, including some of today’s operating mines.
“Extending the METC for five years, a request of the exploration sector for many years, is a major boost for mineral explorers and will help Canada recapture the top global position for mineral exploration investment,” said MAC president Pierre Gratton in a Nov. 21 news release.
The Prospectors and Developers Association of Canada (PDAC) said the tax credit has been essential to attracting exploration investment for the past 18 years. The commitment to extend it to 2024 brings greater stability to the junior mining sector.
“The METC is a critical component of our industry that helps to catalyze investment in mineral exploration projects that lead to the discoveries that could become the mines of the future,” said PDAC president Glenn Mullan.
Among the other measures in the Fall Economic Statement include the Accelerated Investment Incentive, enabling mining companies to write off three times the eligible cost of newly acquired assets in the year the investment is made.
"The enhanced treatment of capital expenditures in the first year for mining and metal manufacturing provides an important incentive to invest in Canada at a time when the mining industry is enjoying generally stronger commodity prices and is looking at growth prospects around the world," Gratton commented.
And businesses can now write-off the full cost of clean energy equipment.
"The write-off of the full cost of clean energy equipment will serve to incentivize investments in northern Canada where access to grid power does not exist, supporting a transition to low carbon energy alternatives,” Gratton added.
“We are hopeful that this will also include the transition currently underway to move toward the use of electric haul trucks, and other heavy equipment.”
