Mining Cars and Beyond: Extending the Mineral Exploration Tax Credit is Good for Canada’s Mining Industry

When Prime Minister Stephen Harper made a stop in the battleground riding of Nipissing-Timiskaming in Northern Ontario, he mentioned to a group of supporters in North Bay the Conservative Party’s plan to extend the 15 percent Mineral Exploration Tax Credit for, at least, another three years if the government is re-elected. Meanwhile, projects in remote locations will qualify for a 25 percent tax credit.

The promised extension is exactly what was recommended by a May mining report co-signed by the Yukon Chamber of Mines, the N.W.T. and Nunavut Chamber of Mines, and other industry groups. Yukon Chamber’s executive director Samson Hartland says he’s glad to see the recommendation included in the party’s platform. “We’re pleased that there’s a recognition by one of the parties so far in this election, and certainly a welcome announcement,” he says. “Every little bit helps given the increased cost and the propensity for projects to cost more in Canada’s North.”

Opposition from Certain Sectors

The planned move, however, is not without opposition. Justin Trudeau, Liberal Party leader, along with Tom Mulcair, head of the New Democratic Party (NDP), have publicly voiced their stand against the tax credit. Lindsay Tedds, an economist with the University of Victoria, says that it may not actually help northern mining. “It does not increase investment to the point where you’re going to have increased exploration,” she reiterates.

The 15 percent Mineral Exploration Tax Credit Explained

Introduced in 2006, the 15 percent Mineral Exploration Tax Credit was meant to help companies raise capital by providing investors with an incentive to finance mineral exploration. The credit is an appendage to the deduction provided to the investor for the exploration expenses “flowed through” by the company that issues the shares. According to the Conservative Party website, the tax credit has helped mining companies raise over $5.5 billion for exploration since its inception.

Exploration is Key to Mining Industry Success

Whether the 15 percent tax credit is an effective policy or not, the idea to encourage more mining exploration is a sound one. When mineral deposits that exhibit great potential are discovered, mine development soon follows. In turn, new mines require underground equipment such as, skips, cages, loading systems, rail haulage cars, mine car wheels, etc. which is good for the mining supply and services sector.

Quality Mining Equipment in Canada

Top mining equipment manufacturers, like Wabi Iron & Steel Corp., can supply superior conveyance systems for your mining operation. Companies such as Wabi have the engineering capabilities and fabrication facilities that enable them to produce quality equipment, from wheels for mining cars to loading and dumping systems, skips and cages.

Sources
Mining makes its debut in Canadian election, Mining.com, Sep. 6, 2015
Do tax credits help Northern mining? Economists and industry disagree, CBC News, Sep. 4, 2015