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Canadian governments collected $9 billion from mining industry
September 11, 2012

The Mining Association of Canada (MAC) reported that the mining industry in Canada paid about $9 billion to Canadian governments in 2011. The report “Revenues to Governments from the Canadian Mineral Sector 2002-2011” found that the 2011 total was nearly as high as the total during peal production of 2007-2008.

The report focused on mining industry payments to Canadian provincial and federal governments, that the total aggregate mining taxes and royalties, corporate income taxes and personal income taxes had increased substantially from the prior year.

“The increase in payments made to federal and provincial governments last year is directly related to the mining industry’s economic strength during this period. Despite fiscal policy changes, notably the reduction in the federal corporate tax rate in 2011, payment levels were buoyed by generally higher metal prices and increased production,” MAC president and CEO Pierre Gratton said.

According to Natural Resources Canada, the mineral sector experienced a 21 percent increase in the value of Canadian mineral production in 2011, to a record $50-billion, the result of a combination of higher prices and expanding output.

The report found that royalty and mining tax payments increased by about $700-million over last year, with most of the increase coming from Alberta, Saskatchewan, Newfoundland and Labrador and Ontario.

Further, over the past decade, the mineral sector had contributed $69-billion to government treasuries, comprising $30-billion to federal and $39-billion to provincial coffers.

The MAC said of particular note was the study’s findings pointing to a steady increase in overall mining tax and royalty payments since those seen during the international recession in the 2009-2010 figures, where payments to governments declined by almost 60 percent compared with 2008-2009.

In 2010-2011, royalties and mining taxes began to recover, increasing by 45 percent from $2.2-billion to $3.2-billion. They increased by a further 20 percent in 2011/12 to $3.8-billion, which was well above the 10-year average, the report found.

Regionally, Alberta and Saskatchewan accounted for the largest portion of royalties and mining taxes at 64 percent last year, stemming from the provinces’ respective strength in bitumen and coal, and potash and uranium.

Newfoundland and Labrador saw royalty and mining tax revenues rise by almost 70 percent on the strength of higher iron-ore and nickel prices, and increased volumes from Vale’s Voisey's Bay nickel operation.

Ontario’s yearly revenues more than doubled – from $72-million to $180-million – likely attributable to higher gold and copper prices.

“The strength of the study is that it measures one of the significant economic contributions of the Canadian mining industry both nationally and regionally. Canadians from coast to coast benefit from a strong, competitive mining industry that supports critical government services such as health care, education and skills training, as well as creates hundreds of thousands of well-paying jobs,” Gratton said.
 

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