Time of ‘opportunity’ for northern mining as advocates push for tax relief
Mineral exploration costs in North can be double what’s seen in the south: NWT and Nunavut Chamber of Mines executive director
Northern mining advocates say now is the time to push the federal government for more tax incentives on northern exploration and mining. (File photo by Arty Sarkisian)
Now could be the time to push for higher federal tax deductions for mining and exploration, say northern mining advocates.
“With the new government and the need for critical minerals and a very strong sovereign country, I see this as an opportunity to try and get this through,” said David Akeeagok, the minister responsible for mining, in the legislative assembly Monday.
All three territories are “aligned” in the effort to double the Mineral Exploration Tax Credit to 30 per cent, Akeeagok told MLAs.
The tax credit is one of the federal initiatives, introduced in October 2000, to “moderate the impact of the global downturn in exploration activity,” according to Natural Resources Canada.
It sits right now at 15 per cent on exploration expenses in Canada. The tax applies to federal income tax the company would have paid in the year when it made the investments in mineral exploration.
The credit was renewed by the federal government in March for two more years. The credit would account for $110 million in support for mineral exploration until 2027, Natural Resources Canada estimates.
However, for more than a decade, mining advocacy groups like the NWT and Nunavut Chamber of Mines have pushed for a higher northern tax credit on mining — a North of 60 Mineral Exploration Tax Credit that would go on top of the existing credit, building it up to 40 per cent.
“Even though the North, Nunavut and Northwest Territories have great mineral potential, it needs more than that to attract the exploration investment,” said Karen Costello, executive director of NWT and Nunavut Chamber of Mines.
Operating expenses in the North can be twice as high as in the south because of the cost of living, transportation and travel expenses, she said.
In 2021, mining was responsible for 38 per cent of Nunavut’s gross domestic product, with a total contribution of $3 billion in all three Canadian territories. Statistics Canada defines the GDP as the value of all the goods and services produced in a jurisdiction over a given period
However, only a handful of exploration projects that attempt to find a suitable place for a mine succeed in doing that, Costello said, adding that a larger incentive would attract more investments in the North, including from smaller companies.
“I think there’s an opportunity now,” she said.
“It aligns with some of the initiatives that we’re hearing from the government of Canada. This is an opportunity not only to increase exploration in Nunavut, but potentially find resources that will benefit Canada overall.”
Nunatsiaq News contacted the Department of Natural Resources for comment on this story, but did not receive a response by deadline.
The biggest issue is the permitting process – most exploration companies are denied permits or it takes many months to get approvals because of all the red tape that we have created over 25 years. I imagine a small town in the south operates with a fraction of the bureaucracy that we have to deal with. All the layers of people/processes and approvals needed, the constant opposition from HTO’s, etc. Until we fix us and decide what we want, there’s no fixing it with more tax dollars.
“In 2021, mining was responsible for 38 per cent of Nunavut’s gross domestic product, with a total contribution of $3 billion in all three Canadian territories. Statistics Canada defines the GDP as the value of all the goods and services produced in a jurisdiction over a given period”
This is where this is a total joke. Lets take the Kitikmeot Region for instance. AEM and B2Gold putting significant money into exploration. On B2’s earnings calls they have put in over a billion dollars in the past 2 years.
Now lets see what economic value that has had for the Kitikmeot. Anything new private or public infrastructure in Cambridge Bay ? No. Kugluktuk? No. Taloyoak?No. Gjoa? No. Kugaaruk. No.
Are people doing any better based on Statistics Canada in NU? No. There’s more reliance on food vouchers and food banks then there ever has been, there’s no increase in private home-ownership, there’s virtually been zero increases in quality of life what so over.
Everyone knows why. Because money is not left in the region, that money generated in NU is generated by southern companies operating in NU. Peanuts is what is left in the Territory.
There’s some labour and operator money made, but actual business is all being done by southern companies, sure it could be under the guise of a dev corp owned business, but those are just companies that allow southern companies to get the work and so the mines can say they are using Inuit companies to make sure they hit whatever IIBA targets.
You can make the argument companies in the north don’t exist to service the mines and that would be correct. But can we stop pretending like billions of dollars flood the NU economy when a mine is being built and things will be great, because they are not. There’s been exactly zero meaningful changes in any of our towns since AEM started expansion and B2Gold started building out that mine.
Its the same with GBRP, the vast majority will go south, might add to NU’s GDP because its generated here, but sure does not stay here.
How much has the Regional Inuit Association taken in in royalties and what have they done with the money?
Hold up your are totally correct on the flow of dollars and more important tax dollars flowing south, by joint venture company’s, 1.2 billion dollars in contracts last year to so called Inuit firms from Quebec,corporate raiders and absolutely no infastructure in the kivalliq community’s by AEM, and none of the wealth staying in the North,Quebec company’s getting rich off their INuit company’s, and nothing staying here, congrats NTI and RIAs. Keep the wealth in the south,
The biggest challenge is the ordeal by process of going before the Nunavut Impact Review Board. Look what their unqualified and incompetent people put Baffinland through for years on end. Might as well do mining in some other jurisdiction.