PDAC responds to Budget 2024
April 17 2024 - 3:16PM
PDAC recognizes Budget 2024 takes focus on the significant
challenges Canadians are currently facing with respect to cost
inflation, housing, and affordability of everyday life.
We did not anticipate the mineral industry would take center
stage in this budget. However, we have no doubt the importance of
the mineral exploration and development sector, mineral supply
chains – and their links to Canada’s overarching environmental and
economic goals – remain top of mind for the Federal Government.
We thanked Minister Freeland for the one-year renewal of the
Mineral Exploration Tax Credit (METC) just a few weeks ago, and we
know a multi-year renewal of the METC, as the government did in
2018, could further boost confidence and investment in Canada’s
mineral exploration industry.
Potentially working against the METC renewal, Budget 2024
proposes a substantial increase to the capital gains inclusion
rate. Such an increase will reduce the amount of available capital
for junior exploration and development companies and create major
headwinds for investment into Canadian industry more broadly.
Without careful consideration, the proposed tax increase could put
us on track to fall short on the critical mineral and other federal
strategies, and we cannot risk losing momentum in building our
capacity to discover and connect new mineral deposits to domestic
supply chains.
PDAC has recommended that the government adjusts the cost base
for capital gains tax treatment of flow-through shares, which will
broaden the potential pool of investors. This would be one approach
to counterbalance Budget 2024’s proposed tax increase.
The challenge of eliminating emissions from our energy and
transportation grids will require more public and private
investments, support from Canadians across our country, and a
sustained effort by governments and private industry to build the
missing infrastructure needed to connect our minerals to
markets.
Given the central role of Indigenous communities in Canada’s
mineral industry, PDAC is pleased by the announcement of up to $5
billion dollars dedicated to the Indigenous Loan Guarantee Program.
This program and its related $3.5 million in capacity funding and
application support will better position communities to participate
in the wealth of economic opportunities generated by the natural
resources industry.
PDAC will be unwavering in voicing how uniquely Canadian
investment incentives like flow-through shares and exploration tax
credits must remain well-oiled and ingrained in our financial
landscape. And we will remain steadfast in our call that Canada
must expand its public geoscience knowledge-base and incorporate
this information into our national strategies and land management
processes.
Media Contact:Scott BarberSenior Manager,
CommunicationsProspectors and Developers Association of
Canada416.362.1969 X244sbarber@pdac.ca