The federal government is aiming to provide a boost to junior miners by again extending the tax credit for mining company flow-through shares and expanding the list of immediately deductible expenses.
In a speech to the Prospectors & Developers Association of Canada’s conference yesterday, federal finance minister Joe Oliver and natural resources minister Greg Rickford, announced that the government will extend the Mineral Exploration Tax Credit for investors in flow-through shares until March 31, 2016. The credit, which has been around since 2006, was scheduled to expire on March 31 of this year.
At the same time, the government announced that it will make the costs associated with undertaking environmental studies and community consultations that are required for a mining exploration permit tax deductible. These expenses will now be eligible for treatment as Canadian Exploration Expenses, which are immediately deductible for tax purposes and are also eligible for flow-through share treatment.
Making these expenses immediately tax deductible, the government says, will make the exploration stage more financially manageable for mining firms and will enhance the competitiveness of the Canadian resources industry.Additionally, by enabling companies to “flow through” their unused deductions to investors, this tax treatment will provide an additional incentive to investors to purchase a corporation’s shares.
“Mining is key for Canada’s prosperity,” Oliver said. “When we strengthen this industry, we create jobs, growth, and long-term prosperity from coast to coast to coast. We are doing exactly that by cutting red tape, lowering taxes, and expanding free trade across the globe. Today, we are doing even more, by renewing the Mineral Exploration Tax Credit and expanding Canadian Exploration Expenses.”