VANCOUVER (miningweekly.com) – The Canadian mining industry has welcomed the federal 2018 Budget that was announced this week, highlighting in particular support for the extension of the Mineral Exploration Tax Credit and several additional funds made available for critical skills training.
Canada's Budget 2018, tabled by Canada's Finance Minister Bill Morneau on Wednesday in Ottawa, outlines key policy measures that include enhanced funding for Indigenous skills training through the establishment of the Indigenous Skills and Employment Training Programme. This is designed to replace the Aboriginal Skills and Employment Training Programme, which has made important contributions to Indigenous participation in Canada's mining sector.
Budget 2018 also earmarks funding to pilot an Apprentice Incentive Grant for Women to encourage more women to pursue careers in trades.
It confirmed the one-year renewal of the Mineral Exploration Tax Credit (METC), and also provides new funding to support the implementation of the Impact Assessment Act and the Species at Risk Act.
Further, Budget 2018 establishes a stronger Canadian diplomatic and trade support presence in China and Asia, which are seen as critical growth points for Canadian exports.
The Mining Association of Canada (MAC) welcomed the budget, saying the long-term prospects for global mining growth remain strong, driven by emerging market demand for minerals and metals. Further, it believes that the global transition to a low carbon future will serve to increase demand for mining products as they are the building blocks of low carbon technologies.
"Canada's ability to seize growth opportunities and harness the potential of a low carbon future rests on its policy and fiscal environment," it said in a statement.
However, the MAC lamented the fact that it believes Budget 2018 contains too few measures to enhance Canada's business competitiveness globally.
"Global competition for new mining investment has never been more intense. With optimism returning to the global mining sector, Canada stands to gain by attracting new investments in mineral exploration and investment, creating high-paying, middle class jobs for Indigenous and non-Indigenous Canadians," stated MAC president and CEO Pierre Gratton.
He noted that the budget does little to enhance Canada's competitiveness at a time when the country's relative share of exploration spending and new mine investment has been in decline. This plays into increased tension surrounding the country's largest trading partner, the US, increasingly adopting protectionist policies that could hurt the long-standing trade relationship, while the US has significantly reduced corporate and personal income taxes.
The Association for Mineral Exploration (AME) also hailed the federal budget, arguing that it provides the fiscal platform necessary for Canada to maintain its position as the top global destination for mineral exploration, according to president and CEO Edie Thome.
The 15% METC, which is now extended through to March 31, 2019, complements the British Columbia Mining Flow-Through Share Tax Credit, which results in a combined investment tax credit for an individual resident of British Columbia of about 32%.
Finance Canada has estimated that the flow-through share system stimulates C$3 in exploration spending for every C$1 in foregone tax revenue. "Such incentives are critical in the globally competitive mineral exploration industry. A recent note by S&P Global Market Intelligence notes that Canada attracted 13.8%, or $1.1-billion, in non-ferrous mineral exploration in 2017, slightly ahead of Australia, which attracted 13.6%, or $1.08-billion.
Budget 2018 also provides continued support for innovation, and the federal government previously announced five supercluster recipients on February 15 including the Digital Technology Supercluster. One function of the British Columbia-based supercluster is the Earth Data Store. This initiative will facilitate and improve data collection, sharing and visualisation in the resource sector - enhancing how information about resource projects is shared between project proponents, Indigenous Peoples, governments and communities.
The mining industry is a significant sector of Canada's economy, contributing C$57.6-billion to national gross domestic product and responsible for 19% of the value of Canadian goods exports in 2016. Canada's mining sector employs 596 000 people directly and indirectly across the country.
Nongovernmental organisation Clean Energy Canada welcomed the budget, citing broad benefits expected from the budget's focus on research and innovation, equality and skills training, and procurement from small and medium-sized businesses.
"While the federal government has made real progress on carbon pricing and phasing out coal-fired power to clean up our power grid, today's budget is also a reminder of the impact that slipping timelines can have. A Zero-Emissions Vehicle Strategy to boost electric car adoption was to be introduced in 2017, but it still hasn't been completed - and consequently support for its implementation isn't in today's budget.
"Making progress on climate change and clean growth is hard and at times slow work, and we can't ignore the fact that Canada is still digging out from a deficit of previous federal inaction. Today's budget is a welcome marker of progress and resolve," said policy director Dan Woynillowicz in a statement on Wednesday.