PDAC and the Canadian Mineral Industry Federation (CMIF) submission to the 2013 Energy and Mines Minister Conference (EMMC 2013)
PDAC staff called for greater public support for mineral exploration and mining at the annual Energy and Mines Ministers Conference (http://www.emmc2013nwt.ca/), held in August 2013 in Yellowknife, NWT. In addition to putting forward concise, innovative requests for federal support via Budget 2014 (http://www.pdac.ca/public-affairs/budget-2014), PDAC also worked with CMIF to identify specific actions that provinces and territories could take to respond to the crisis in mineral exploration financing.
PDAC is suggesting that all jurisdictions (federal, provincial, territorial) do the following:
- Establish mineral exploration focused venture capital funds (as has been done in Quebec) to support grassroots exploration.
- Mandate a reduction in the fees imposed by securities commissions and exchanges, to reduce the regulatory burden faced by the small businesses that make up the junior exploration industry
For the provinces and territories specifically, we suggest that they:
- Increase the total budgets allocated to mineral exploration grant programs
- Increase the amounts that individual prospectors/companies can ask for from those programs
- Increase the percentage of total exploration expenditures that can be claimed (e.g. from 50% of eligible costs to 66%)
- Put in place, or enhance, METC-type incentives that complement the federal METC
In addition to our Budget 2014 requests, CMIF and the PDAC also suggest that the federal government:
- Extend the Mineral Exploration Tax Credit for three years, as opposed to one year, so that industry will have long-term certainty to plan crucial investments in exploration
- Temporarily enhance the METC from its current level of 15%
- Modify the rules governing the Mineral Exploration Tax Credit to allow a company to claim an "operator allowance" of up to 10% of direct exploration costs as eligible Canadian Exploration Expenses (CEE), in recognition of the costs related to managing the program
- Establish a targeted tax incentive to incent exploration and mining in remote/northern regions, where operational costs are substantially higher than in other parts of Canada
- Allow exploration companies to claim all community consultation costs as Canadian Exploration Expenses, regardless of what point in time they are incurred prior to production in reasonable commercial quantities (not just those that are incurred after a permit has been secured). This would help bring the CEE guidelines in line with recent changes to several provincial mining acts that direct companies to conduct community consultations prior to applying for plans and permits
- For flow-through shares held for at least one year, change the adjusted cost base to 50% instead of zero.
The full report is available here.