AME BC welcomes federal government measures to encourage mineral exploration

Minister of Finance Joe Oliver extends Mineral Exploration Tax Credit with PDAC announcment. — Photo courtesy Northern Ontario Business

The Association for Mineral Exploration British Columbia (AME BC) welcomes the federal government’s commitment to extend the Mineral Exploration Tax Credit through March 2016 and to extend the eligibility of Canadian exploration expenses (CEE) to include environmental studies and community consultation expenses incurred after February 2015.

Minister of Finance Joe Oliver announced these incentives at the Prospectors & Developers Association of Canada (PDAC) convention on March 1.

“The Mineral Exploration Tax Credit is vital to the success of mineral exploration in Canada, particularly as the industry prepares for the next upswing,” says David McLelland, Chair of AME BC. “And mineral explorers in British Columbia and throughout the country will benefit from the recognition of environmental studies and community consultation costs as eligible Canadian exploration expenses. We particularly appreciate the recognition of community consultation costs, as the industry places a high level of importance on engaging communities about the opportunities, impacts and benefits of mineral exploration and development.”

In British Columbia, the federal 15 per cent Mineral Exploration Tax Credit for investors is harmonized with the 20 per cent mining flow-through share tax credit to encourage private investment in mineral exploration, for a combined 35 per cent credit. An extension of the provincial tax credit through December 2015 was announced at AME BC’s Mineral Exploration Roundup 2015 conference in Vancouver. The extension of CEE eligibility that will make community consultation and environmental studies tax-deductible follows an Ernst & Young study conducted in 2013 for AME BC. This study found that the average consultation costs borne by representative companies as a percentage of their total exploration expenditures in 2012 was estimated at over 21 per cent.

“Our modern society needs metals and minerals and relies on explorers to find new discoveries that will lead to the development of the next generation of mines,” says Gavin C. Dirom, President & CEO of AME BC. “The extension of the Mineral Exploration Tax Credit and the allowance of Canadian exploration expenses to include environmental studies and consultation costs will help encourage more investment in mineral exploration and the potential discovery of new mineral deposits throughout British Columbia and every region of Canada.”