Significant boost to Canada’s mining sector competitiveness
The Mining Association of Canada (MAC) welcomes the measures included in the 2018 Fall Economic Statement as an important boost to Canadian mining competitiveness.
The 2018 Fall Economic Statement proposes several measures that will enhance the investment competitiveness of Canada's mining and metal manufacturing sectors, including:
- The Accelerated Investment Incentive, which will enable miners to write off three times the eligible cost of newly acquired assets in the year the investment is made.
- Extending the Mineral Exploration Tax Credit (METC) for a five-year term, bringing greater investment certainty for early stage mineral exploration.
- Allowing businesses to immediately write-off the full cost of clean energy equipment.
"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," said Pierre Gratton, President and CEO for MAC. "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. We are hopeful that this will also include the transition currently underway to move towards the use of electric haul trucks, and other heavy equipment. 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."
Canada's tax regime has fallen behind international competitors in recent years. Budgets 2012 and 2013 reduced or eliminated several direct and indirect mining related tax credits. Most recently, the US Tax Cuts and Jobs Act reforms significantly reduced Canada's mining tax competitiveness vis-à-vis the US.
"Canada's tax regime is a major determinant of its attractiveness for domestic and international mining investment," said Gratton. "MAC appreciates the government's recognition of the need to improve Canada's investment competitiveness in mining."
Other measures contained in the Fall Economic Statement that MAC welcomes include:
- An additional $800 million over five years for the Strategic-Innovation Fund.
- A commitment to increase overseas exports by 50 percent by 2025.
- A proposed increase of $13.6 million to the Multimodal Integrated Passenger-Freight Information System.
- Bolstering the Canadian Trade Commissioners Service, including a tripling of its CanExport program to help Canadian businesses move into new markets. The mining and mining supply sector significantly values the work of Trade Commissioners around the world that support our access to global markets.
- A suite of proposals to improve regulatory competitiveness, including the establishment of a dedicated External Advisory Committee on Regulatory Competitiveness.
- Accelerated investment of $773.9 million over the next five years of national, trade-corridors funding.
The mining industry is a major sector of Canada's economy, contributing $97 billion to national GDP and responsible for 19 percent of Canada's total domestic exports. Canada's mining sector employs 634,000 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.
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.