On Tuesday afternoon federal Finance Minister Jim Flaherty delivered the latest budget from the ruling Conservative party, a budget that has earned the sobriquet “boring”. There were no big new programs, no new tax relief measures for the young or middle class, nothing except the predictable rise in taxes for tobacco products.
If there was any good news in the budget, it is Flaherty’s promise to balance it and even generate a surplus in 2015.
So what’s in the budget for mining?
The Mining Association of Canada, Prospectors & Developers Association and the Association for Mineral Exploration British Columbia all congratulated the government for extending the mineral exploration tax credit. This credit helps raise money for exploration by giving individuals who invest in junior companies exploring in Canada a 15% tax credit on eligible expenditures. The credit has been extended to March 31, 2015.
At a time when raising money for mineral exploration has become so difficult, a credit that rewards investors is particularly welcome. The next step said David McLelland, chair of AME BC, would be to make the credit a permanent feature of Canada’s tax regime.
MAC added praise for the efforts made to balance the budget, moves it said keep interest rates and unemployment low. It further noted the government’s commitment to improving the education of aboriginal youth. Federal money of more than $1.9 billion over three years starting in 2016 will support a new act giving First Nations control of First Nations education.
MAC president and CEO Pierre Gratton said, “The Canadian mining industry is one of the largest employers of aboriginal people across the country … Getting the education system right for aboriginal Canadians is critical as it provides the necessary foundation for them to become full participants in Canada’s workforce.”
As well as the exploration tax credit, the PDAC noted that the budget provides $40 million over two years to renew the Strategic Investment in Northern Economic Development program. The federal government pledges to work with territorial government and local municipalities development, and the PDAC threw its support behind the program.
“The METC and northern development remain vital to the exploration industry in Canada as it helps to keep jobs and investment in Canada, and ensures our competitive position globally,” sais PDAC president Glenn Nolan.
The association added that researchers estimate that every dollar invested in basic geological mapping triggers five dollars in exploration spending by the private sector. And every dollar invested in pre-competitive geoscience leads to the discovery of in-ground resources worth between $100 and $150.