Canadian budget proposal is mining friendly
In its proposed federal budget the Canadian government plans to streamline the permitting process for major mining projects while extending a 15 percent mineral exploration tax credit for junior explorers. These moves are expected to accelerate job growth and keep the Canadian mining sector competitive.
Finance Minister Jim Flaherty presented the federal budget plan while saying Canada’s oil and gas, mining and forestry sectors directly employ more than 750,000 Canadians. “Canada's resource industries offer huge potential to create even more jobs and growth, now and over the next generation. This potential exists in every region of the country-natural gas in British Columbia, oil and minerals on the Prairies, the Ring of Fire in Ontario, Plan Nord in Quebec, hydro power in Atlantic Canada, and mining in Canada's North.
“We will implement responsible resource development and smart regulation for major economic projects, respecting provincial jurisdiction and maintaining the highest standards of environmental protection,” he stressed. “We will streamline the review process for such projects, according to the following principle: one project, one review, completed in a clearly defined period. We will ensure that Canada has the infrastructure we need to move our exports to new markets.”
The budget includes the decision to cap the environmental review process for major projects at 24 months.
Pierre Gratton, CEO of the Mining Association of Canada, said, “Today's budget will help expedite over Cdn$140 billion in new investment in Canada's mining sector. Canada is in global competition for mining investment and an effective and efficient regulatory regime can provide a competitive advantage over other jurisdictions.
“Legislature reforms announced in today’s budget promise to modernize Canada’s environmental review and permitting processes,” he said. “This will accelerate investment, job growth and enhance Canada’s international competitiveness and position as a mining superpower.”
The Canadian government aims to establish clear timelines for investors, reduce regulatory duplication, and redeploy resources on projects where environmental impacts are greatest. Panel reviews of large mining projects would be capped at two years while a one-year timeline has been set for environmental assessments.
The budget also includes the the government's commitment to renew funding for the Major Projects Management Office (MPMO), which MAC called “an important instrument in the responsible and efficient development of Canada's natural resources.”
The MPMO is a Government of Canada organization which provides overarching project management and accountability for major resource projects in the federal regulatory review process, and to facilitate improvements to the regulatory system for major resource projects.
The budget also dedicates $14 million over two years to integrate consultations with aboriginal peoples into project reviews.
Both MAC and the Association for Mineral Exploration British Columbia (AME BC) praised the federal government for extending the Mineral Exploration Tax Credit until March 31, 2013. However, the budget also details a phased-elimination of the tax credit.
The Budget 2012 Economic Action Plan also proposes to eliminate the penny from Canada's coinage system. It costs the government 1.6 cents to produce each new penny. The estimated cost to the government of supplying pennies to the economy is about C$11 million a year.
While the Royal Canadian Mint will no longer distribute pennies as of this Fall, consumers can continue to use the pennies for transactions indefinitely.