TORONTO – The Honourable Lisa Raitt, Minister of Natural Resources, today outlined measures that the Government of Canada is taking to support the Canadian mining industry. In particular, she noted that Budget 2009 included the extension of the Mineral Exploration Tax Credit (METC) for flow-through share investors by another year. This measure will help junior mining companies access the venture capital they need to finance their exploration activities.
Like many Canadian sectors, the mining industry has been hit hard by falling commodity prices, decreased demand and tightened access to capital caused by the global economic downturn.
"Our Government undertook unprecedented consultations in putting together Canada's Economic Action Plan to address the challenges currently facing this sector," said Minister Raitt. "Extending the METC is an important part of our Government's commitment to the mineral exploration, mining and metals manufacturing sector, which is vital to some 150 communities and employs over 363,000 Canadians."
Market volatility and weaker base-metal prices have made it difficult for junior exploration companies to raise new equity. This 15 percent tax credit will help maintain investor confidence and interest in Canada's mining sector, which is a mainstay of the national economy. In 2007, mining and related industries contributed $42 billion to Canada's Gross Domestic Product (GDP).
The METC is only one in a series of measures in the Government's Economic Action Plan designed to help improve the investment climate for industry.
The Government is also investing $1 billion in the Community Adjustment Fund to help mitigate the community effects of the economic downturn.
Additionally, the Government is:
- Allocating $200 billion to improve access to credit to allow businesses to obtain financing for general business activities such as growing and creating new jobs;
- Making available almost $12 billion in new infrastructure stimulus funding;
- Providing $8.3 billion for the Canadian Skills and Transition Strategy to enhance Employment Insurance and other support for people who have lost their jobs;
- Extending the temporary 50 percent straight-line accelerated capital cost allowance rate to investment in manufacturing or processing machinery and equipment in 2010 and 2011.
The Government is also committed to moving ahead with reductions in the general corporate income tax rate to 15 percent in 2012, which includes a reduction to 19 percent in 2009. The Government also eliminated the federal capital tax in 2006.
Despite the downturn in demand and prices, minerals and metals remain one of the strengths of the Canadian economy. In 2008, Canada had over 1200 junior exploration and mining companies and over 2400 internationally competitive suppliers of equipment, technology and knowledge-based services. The cumulative worldwide mining assets of Canadian mining companies at the end of 2007 was $80 billion in over 100 countries.
Minister Raitt highlighted the tax credit extension at the annual Prospectors and Developers Association of Canada Conference.
The Honourable Lisa Raitt, Minister of Natural Resources, today outlined measures that the Government of Canada is taking to support the Canadian mining industry. One key measure is the extension of the Mineral Exploration Tax Credit (METC) for another year to help junior mining companies access the venture capital to finance their exploration activities.
Media may contact:
Jasmine MacDonnell
Press Secretary
Office of the Minister
Natural Resources Canada
Ottawa
613-996-2007
Or
Media Relations
Natural Resources Canada
Ottawa
613-992-4447
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