BC gov’t rolls out exploration incentive

The newly elected British Columbia government has rolled out several incentives to boost mineral exploration and mining in the province, the most significant being a 20% flow-through share tax credit.

Government officials say the province now has the second most attractive exploration tax incentives of the 13 Canadian jurisdictions (next to Quebec). The new program will be harmonized with the federal government’s 15% flow-through tax credit introduced last fall. British Columbia taxpayers investing in qualifying shares will receive tax savings and tax credits totalling 63% of their share investments, well above the level available in the 1980s flow-through regime.

The government’s newly unveiled mini-budget contained other incentives aimed at stimulating the moribund mining industry, including the staged elimination of the general corporation capital tax, elimination of the provincial sales tax on machinery and equipment, and a major reduction in corporate income taxes to 13.5% from 16.5%.

Donald McInnes, president of the British Columbia and Yukon Chamber of Mines, cheered the government’s actions. “This announcement is not only a clear acknowledgement of the current challenges facing B.C.’s mineral sector, but also a demonstration of faith in, and commitment to, British Columbia’s mining future and the need to improve [the] level of overall competitiveness.”

The province’s mining industry was weakened by almost a decade of socialist government policies that reduced access to land for mineral exploration and development. The new government has vowed to streamline permitting procedures and improve access to land in order to boost investment and spending. Only $30 million was spent on mineral exploration last year, well below the $226 million spent in 1990.