Conservatives offer tax break to northern mining companies

These samples of rock were excavated at the site of Agnico Eagle Mine’s Meliadine gold project outside of Rankin Inlet. (FILE PHOTO)

The Conservatives are mining for northern votes this week with plans to extend and expand a tax credit for companies that invest in remote exploration projects.

Prime Minister Stephen Harper said Sept. 2 that a re-elected Conservative government would extend its 15 per cent mineral exploration tax credit — first introduced in 2006 — for another three years.

Harper also offered a 25 per cent tax credit for any projects in the territories or those located more than 50 kilometres from an all-weather road or service centre, including Nunavik.

“Resource development is critical to expanding our economy,” Harper said in a Sept. 2 release. “When we strengthen our resource sector, we create jobs, fuel growth and promote prosperity across the country.”

Together, the two credits would cost the government $60 million a year, beginning in 2016-17.

Since 2006, the mineral exploration tax credit has allowed mining companies to raise more than $5.5 billion for exploration, the Conservatives said Sept. 2.

In 2013 along, more than 250 companies sold “flow-through” shares benefitting more than 19,000 individual investors.

The Conservatives have touted the potential of the mining industry as an “economic game-changer” for northern and remote communities.

But too many projects in the North face major barriers moving into production due to their distance from transportation and supply centres, Harper said Sept. 2.

The mining sector estimates that the average costs of remote projects can be more than double the average costs of non-remote projects.

The Nunavut Liberal and NDP campaign organizations did not immediately respond to requests for comment made Sept. 2.

The NWT and Nunavut Chamber of Mines said Sept. 2 that it was “pleased to see the announcement” by Harper.

“We encourage all political parties to commit to appropriate actions to support Canada’s minerals industry and specifically to enhance mineral development in remote northern Canada,” the mining association said.