In its first budget, Canada’s Conservative government announced that it will re-introduce the Investment Tax Credit for Exploration (ITCE) — more commonly known as the “super” flow-through share program — starting May 2 and continuing through March 31, 2007.
The ITCE program allows investors a 15% credit on their flow-through share investments in grassroots exploration. The budget says the 1-year “look-back” rule will allow funds raised with the benefit of the credit in 2007, for example, to be spent on eligible exploration activity until the end of 2008.
The news is a welcome development for Canada’s mineral exploration sector.
“The ITCE program is a boon to this country’s exploration industry,” says Patricia Dillon, president of the Prospectors and Developers Association of Canada (PDAC). “There is a general consensus that the ITCE has helped Canada capture and maintain its position as the number one country in the world for mineral exploration spending.”
High and sustained levels of exploration are required to discover new deposits, which help replenish mineral inventories, feed smelters, and meet the growing demand for mineral commodities in countries such as China and India.
“We estimate that the exploration tax incentive to date has generated $1.4 billion in exploration spending,” Dillon says. “Most of this money is spent in Canada’s northern and rural regions. We congratulate the federal government for its wise decision.”
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