OTTAWA,
ON, April 16, 2024 /CNW/ - Today, through
its federal budget, the government has announced a mix of measures
that will impact Canada's mining
and mineral exploration sector.
Budget 2024 builds upon earlier commitments in Budget 2023, as
well as in the 2023 Fall Economic Statement and the Canadian
Critical Minerals Strategy. Specifically, the budget includes:
- Extending the Clean Technology Manufacturing Investment Tax
Credit (CTM-ITC) to include the cost of investments in eligible
property used primarily (50 per cent or more of the production
value) to produce qualifying critical minerals, and to make certain
other adjustments to provide greater clarity to businesses involved
in polymetallic extraction and processing. This responds directly
and positively to a MAC concern with an original proposal of 90 per
cent that would have severely limited the applicability, and
therefore value, of the CTM-ITC to spur new mining and mineral
processing investment.
- Setting a target of 5 years or less to complete federal Impact
Assessment and permitting processes, and 2 years or less for
permitting of non-federally designated projects. In addition, the
government is setting a three-year target for nuclear project
reviews and commits to working with the Canadian Nuclear Safety
Commission and Impact Assessment Agency of Canada to consider how the process can be
better streamlined and duplications reduced between the two
agencies.
- $5 billion in loan guarantees to
unlock access to capital for Indigenous communities, creating
economic opportunities and supporting their economic development
priorities.
- Creating more work-integrated learning opportunities for
post-secondary students, by providing $207.6
million to Employment and Social Development Canada for the
Student Work Placement Program.
The government announced in late March that it would extend the
Mineral Exploration Tax Credit (METC) through to March 31, 2025, which this budget confirms. In
addition, the budget allows individual taxpayers to claim 80 per
cent of the Charitable Donations Tax Credit (instead of 50 per cent
as originally proposed in 2023). However, the budget's increase to
the inclusion rate for corporations and trusts to two-thirds and
for individuals to two-thirds will significantly reduce the value
of the METC to many individuals. Unless the government increases
the adjusted cost base of all flow through shares from zero per
cent to higher levels, we believe this budget will be very damaging
to financing of mineral exploration in Canada at a time when new investment in
critical minerals exploration is most needed. MAC hopes to work
with Finance Canada to avoid what we hope are unintended
consequences of these proposed changes.
"Today's budget has pros and cons," explained Pierre Gratton, MAC's President & CEO. "The
proposed new threshold for the CTM-ITC is welcome, but the changes
to capital gains may undermine the METC and harm mineral
exploration financing. We applaud the government's ambitions
with respect to project timelines, but the real success will come
down to implementation; we look forward to working with the
government to make sure that mines in Canada can be approved and brought online in
timelines that are more responsive to the urgent need for Canadian
minerals and metals."
The mining industry is a major sector of
Canada's economy, contributing
$125 billion to the national GDP and
is responsible for 22 percent of Canada's total domestic exports. Canada's mining sector employs 665,000 people
directly and indirectly across the country. The industry is
proportionally the largest private sector employer of Indigenous
peoples in Canada and a major
customer of Indigenous-owned businesses.
About MAC
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.
SOURCE Mining Association of Canada (MAC)