OTTAWA – The Mining Association of Canada has released the results of its annual look at mining industry payments to Canadian governments. The report found mining payments to federal and provincial governments total an estimated $71 billion from 2003 to 2012, the decade that MAC has been publishing these numbers. The report was prepared by Entrans Policy Research Group.
“The royalties, taxes and other payments made to governments by the industry ultimately go towards supporting critical government services like health care, education and the building of infrastructure,” said MAC president and CEO Pierre Gratton. “This impressive amount of more than $70 billion over the past decade also underscores the importance of mining in Canada as both a major employer across the country and significant contributor to the Canadian economy.”
The data collected over 10 years shows that while payments can fluctuate from year to year due to the cyclical nature of the business – at times significantly – the overall contribution to governments is huge and the trend over the past decade is positive. The most recent data for 2012 showed an overall year-over-year decline in mining payments to an estimated $6.6 billion in 2012 from approximately $8.3 billion in 2011. This decline can be largely attributed to the challenging economic environment miners faced last year and the price declines experienced for the majority of major minerals.
Despite this decline, the $6.6 billion figure is still well above the $4.1 billion paid by industry in 2003. Payments peaked at a staggering $10.5 billion in 2008 before dropping to $4.9 billion in 2009 as a result of the global recession. As the mining industry recovered, payments moved upwards in tandem, reaching $8.3 billion in 2011.
In 2012, there was a decrease of approximately $820 million in royalties and mining taxes paid compared to 2011, as well as an estimated decrease of corporate income taxes (CIT) from $2.4 billion in 2011 to $1.2 billion in 2012 (based on current, incomplete CIT data for 2012). Interestingly, however, 2012 saw a significant increase in the sector’s personal income taxes in 2012 – $290 million or 15%. This increase is a result of the mining industry’s role as a major, high paying employer in Canada. The average weekly pay for a mining worker in 2012 was $1,599, which surpassed the earnings of workers in forestry, manufacturing, finance and construction.
To view the report, please visit Mining.ca.