Ottawa topped up incentives in today’s federal budget for investment in resources and films.

The resource sector now joins the rest of the corporate world in enjoying a reduced income tax rate of 21% from 28%. Resources had been excluded from the reduction in the statutory corporate income tax rate introduced in October 2000 as part of the Chrétien government’s five-year tax reduction plan.

The resource sector also gets a deduction for actual provincial and other Crown royalty and mining taxes, to take the place of an existing 25% resource allowance.

Ottawa is also introducing a new tax credit for qualifying mineral exploration expenditures. Transitional arrangements will be announced later, in connection with the Alberta Royalty Tax Credit.

The budget is also extending the existing temporary mineral exploration tax credit given those who purchase flow-through shares, until Dec. 31, 2004. It is providing an additional year — to the end of 2005 — for issuing corporations to use flow-through shares to finance their activities.

The 2003 budget is also topping up the Film or Video Production Services Tax Credit to provide a refundable tax credit of 16% of the cost of Canadian labour engaged in foreign films and videos produced in Canada, from 11%. The government hinted that more incentives for investment in Canadian film and videos are on the way.

Ottawa promised $150 million over two years for the Canadian Television Fund.