OTTAWA – Prime Minister Stephen Harper’s Conservative government brought down its first budget since it was elected in January, and the MINING ASSOCIATION OF CANADA (www.Mining.ca) approves.
“Budget 2006 delivers on many of the Canadian mining industry’s priorities,” stated MAC president Gordon Peeling. “Canada’s mining industry is booming, creating new jobs, strengthening our trade balance and feeding federal coffers. Our ability to do this over the long term depends, in part, on the country’s tax competitiveness. This year’s budget takes us in the right direction.”
Measures of particular interest to the Canadian mining industry include:
– the elimination of the federal capital tax as of January 1, 2006, two years ahead of schedule. For a capital-intensive industry like mining, the end of this onerous tax on productivity is welcome.
– the elimination of the corporate surtax by Jan. 1, 2008, and the reduction in the corporate income tax rate to 19% by 2010.
– an effective two-year extension of the 15% mineral exploration tax credit for flow-through share investors.
– the elimination of the excise tax on jewellery.
– the elimination of the double taxation of large corporation dividends.
Peeling expressed disappointment, however, that the budget failed to expand its investment in geoscience, particularly in northern Canada, by supporting the Co-operative Geological Mapping Strategy (CGMS).
“Renewed investment in geoscience is critical to address the looming crisis in declining base metal reserves, which is placing Canadian smelters and refineries at risk,” he noted. “We will continue to press the federal government to re-invest in minerals science research and mapping that is so important to northern Canadian opportunities and to maintaining Canada’s global leadership position in mining.”