Budget 2013 a mixed bag for Canada's miners
OTTAWA, March 22, 2013 /CNW/ - The Mining Association of Canada (MAC) concludes federal budget 2013 is a mixed bag when it comes to its impacts to the Canadian mining industry.
MAC is encouraged by the significant new measures announced in Budget 2013 to address skills shortages, including the establishment of a Canada Job Grant, support for more paid internships, reduction of barriers in apprenticeship accreditation, the reallocation of funds to promote education in high demand fields, and funding for Yukon College's Centre for Northern Innovation in Mining. Moreover, enhanced Aboriginal training-to-employment programs and a boost in scholarships and bursaries is also appreciated by the Canadian mining sector, which is proportionally the largest private sector employer of Aboriginal peoples in Canada. MAC also welcomes the government's proposal to provide $37 million over the next two years to support research partnerships with industry through the granting councils.
"As an industry that will require an estimated 145,000 new workers over the next ten years, we are pleased that skills and labour training emerged as a key theme of the federal budget," said Pierre Gratton, MAC's President and CEO. "This attention underscores the incredible opportunities before Canadians for well-paying jobs, but also the current skills gap that acts as a barrier for workers in finding employment, especially for positions that are highly-skilled or technical in nature."
"This budget supports the priorities championed by our stakeholders as necessary to mitigate the skills shortage - skills development, Aboriginal training and robust labour market information. This is essential to keep our industry sustainable as we move forward in addressing the mismatch of skilled workers with available jobs and the huge exodus of retiring workers in the next ten years," said Ryan Montpellier, Executive Director of the Mining Industry Human Resources Council.
Budget 2013 extends the 15 per cent Mineral Exploration Tax Credit (METC) for an additional year, an important tax incentive for the junior exploration sector. Its renewal is critical at this time, given market jitters and the challenges faced by junior companies in raising high-risk capital.
Unfortunately, Budget 2013 also announced the elimination of the Accelerated Cost of Capital Allowance (ACCA) for new mines and major mine expansions. The budget also reduces the deduction rate for pre-production mine development expenses. Historically, certain pre-production mine development expenses, such as those related to removing overburden or sinking a mine shaft, were eligible for the Canadian Exploration Expense (CEE) for 100 per cent deduction. As of 2018, this will be moved to the Canadian Development Expense where relevant expenses will only be eligible for a 30 per cent deduction.
"For the second federal budget in a row, the Government of Canada has removed mining-specific tax measures, which will negatively affect mining project economics," stated Gratton. "While the government has stated it is removing these measures to bring more 'tax neutrality' to Canada's corporate tax system, Budget 2013 in the same breath extends or creates identical measures for other sectors of the economy."
While not specifically referenced in the budget, MAC is also eager to continue dialogue with the federal government on the Geo-mapping for Energy and Minerals (GEM) program, which is set to expire in the current fiscal year. GEM provides critical geoscience knowledge necessary for exploration to guide investment decision, as well as for government to inform land-use decisions such as the creation of parks and other protected areas.
The Mining Association of Canada is the national organization for the Canadian mining industry. Its members account for most of Canada's production of base and precious metals, uranium, diamonds, metallurgical coal, mined oil sands and industrial minerals and are actively engaged in mineral exploration, mining, smelting, refining and semi-fabrication. Please visit www.mining.ca.
SOURCE Mining Association of Canada (MAC)