Federal budget 2015 offers up a few tidbits for miners

VANCOUVER — On April 21, Canadian Minister of Finance Joe Oliver tabled the country’s annual federal budget, wherein the Conservative government achieved a $1.4-billion surplus that fulfills the promise of balanced books made during the 2011 election. The announcement features a few incentives for the mining industry, including the extension of tax credits, geoscience funding and a capital commitment to help develop chromite resources in Ontario’s Ring of Fire mineral belt.

The government expects a small surplus over the next three years, largely due to cuts to contingency funds and a variety of asset sales. The numbers are below estimates made a year ago, when the Harper government said it expected a surplus of more than $6 billion.

Oliver said that the recent plunge in oil prices had hit Canada’s bottom line, but added that he does not expect similar declines in energy markets moving forward.

In a bid to fuel mineral exploration, Ottawa will invest $23 million over five years to renew the Targeted Geoscience Initiative, a government-industry partnership aimed at identifying areas of base metal potential. In addition, Oliver re-announced the extension of the 15% federal mineral exploration tax credit for flow-through share investors for another year.

A study by the Prospectors & Developers Association of Canada found that 72% of exploration-stage financing from 2012 through 2014 was by flow-through shares.

The president & CEO of the Association for Mineral Exploration British Columbia (AME BC), Gavin Dirom, said that “the tax incentives confirmed in [the] federal budget will help maintain Canada’s globally competitive edge in attracting investment for mineral exploration and development,” 

Oliver also revealed that the tax credit would confirm environmental studies and community consultation expenses incurred after Feb. 2015. A 2013 Ernst & Young study for AME BC found that the average consultation costs borne by mining companies as a percentage of their total exploration expenditures in 2012 exceeded 21%.

The budget also proposes $34 million over five years to the Canadian Environmental Assessment Agency to aid consultation. 

“Mining projects account for a large majority of federal environmental assessments,” president and CEO of the Mining Association of B.C. Karina Brino said. “Effective and timely environmental assessment review decisions are key to the competitiveness of Canada.”

Concerning Ontario, the Tories pledged $23 million over five years to advance new technology for processing rare earth metals and for “green processing technologies” in support of clean chomite mining. According to reports the government estimates that 100 million tonnes of chromite in the province could help Canada emerge as a “significant” producer.

The budget also allots $215 million for the Skills and Partnership Fund, which equips Aboriginal Peoples with skills for jobs in “high-demand” sectors.

“Given the current financial situation and the need for fiscal discipline, I am pleased to see the federal government renew investment in critical areas,” Mining Association of Canada president and CEO Pierre Gratton stated. “The government has also made some strategic investments in innovation, marine safety and infrastructure that should pay dividends over time.”