OTTAWA,
ON, Aug. 13, 2024 /CNW/ - The Mining
Association of Canada (MAC)
welcomes the Department of Finance's consultation on advancing key
Budget 2024 priorities. For the mining sector, this consultation
focuses on addressing the eligibility threshold challenges posed by
the Clean Technology Manufacturing – Investment Tax Credit's
(CTM-ITC) treatment of critical minerals found in polymetallic
deposits and measures to address the negative impact of Budget
2024's change to the inclusion rate for capital gains combined with
Budget 2023's change to the Alternative Minimum Tax (AMT), which
significantly reduce the incentive to invest in flow-through
shares.
Due to Canada's geological
formations, valuable metals such as copper, zinc, lead, molybdenum,
gold, and silver often occur in the same deposit. These complex
deposits not only present economic opportunities but also play a
crucial role in supporting the clean energy transition. The
proposed amendment to the CTM-ITC's eligibility threshold will help
stimulate Canadian copper projects found in polymetallic deposits
and support Canada's mining
industry, a key contributor to the economy in the natural resources
sector.
"Copper is essential for the clean energy transition, powering
everything from electric vehicles to renewable energy systems,"
stated Pierre Gratton, President and
CEO of the Mining Association of Canada. "We appreciate that Finance Canada has
listened to our concerns and recognized the critical role of
copper, often found in polymetallic deposits, in advancing
Canada's clean energy goals, by
amending the eligibility threshold for critical mineral
deposits."
However, while these measures are a step in the right direction,
MAC believes there is still more that can be done to stimulate
investment in Canada's mining
industry. Since 2020, over $46
billion has been invested in electric vehicle production and
battery supply chains, due to its proximity to critical minerals.
The rising demand from battery manufacturing factories underscores
an urgent need for increased raw material production and
significant midstream processing investments. If we want to capture
that value domestically, Canada
must accelerate mine development at an unprecedented pace.
MAC urges the government to enhance support for the critical
minerals value chain by expanding the CTM-ITC eligibility to cover
intangible mine development costs, including shafts, ventilation,
and underground development. This expansion is crucial for boosting
critical minerals production and extending the life of existing
mines.
MAC also welcomes the proposed change to the AMT, which will
help restore the purchasing power for individuals investing in
Mineral Exploration Tax Credit (METC) and Critical Minerals
Exploration Tax Credit (CMETC) flow-through shares to 2023 levels.
Mineral exploration is largely conducted by small, specialist
companies that rely on the sale of "flow-through shares," which
offer tax advantages to mitigate the high risks associated with
exploration. However, MAC remains concerned about the ongoing
reduction in corporate purchasers, which poses a significant
drawback to the growth of the exploration industry.
"The proposed adjustment to the AMT helps to restore the ability
of mineral exploration companies to raise funds for exploration
using flow through shares," explained Gratton. "We appreciate
Finance Canada's acknowledgement of Budget 2024's unintended impact
on the METC and today's proposed amendment to the AMT will help to
ensure that the METC remains an important financing tool for
mineral exploration. Given the importance of finding new mines to
address geopolitical risks and support the energy transition, we
caution that more action may be needed to ensure the exploration
sector continues to produce the mines of tomorrow and contribute to
Canada's sustainable future."
"MAC is committed to collaborating with Finance Canada and other
partners to maximize the mining industry's potential," continued
Gratton. "We look forward to seeing the proposed amendments
reflected in upcoming legislation, with additional adjustments, as
they are crucial for driving long-term investment and growth in the
sector."
The mining industry is a major sector of Canada's economy, contributing $161 billion to the national GDP and is
responsible for 21 percent of Canada's total domestic exports. Canada's mining sector employs 694,000 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.
About MAC
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.
SOURCE The Mining Association of Canada