Federal Budget 2017

PDAC is pleased to provide recommendations for Federal Budget 2017 that will contribute to economic growth and enhance the prosperity of Canadians. As an industry that operates across the country—in urban, rural and remote areas, and is the largest private sector employer of Aboriginal people—the minerals sector is uniquely positioned to offer economic opportunities to all Canadians.

PDAC recommendations

Pages from PDAC's recommendations for Budget 2017

Sustain Flow-Through Share Financing

Flow-through share (FTS) financing, a Canadian fiscal policy innovation, makes it possible for thousands of small, entrepreneurial companies to raise capital to undertake mineral exploration—the riskiest stage of the mineral development cycle. Data shows that juniors made approximately 70% of all discoveries in Canada between 2005 and 2014, and found almost 30% more value per dollar expended than major mining companies. FTS financing is particularly important during downturns when other sources of capital dry up. Since 2007, FTS funds provided an average of 70% of all funds raised (on Canadian stock exchanges) for the purpose of Canadian mineral exploration; in 2014, that figure reached a high of 90%. PDAC recommends the federal government sustain the innovative FTS financing mechanism to support the prosperity and growth of junior mineral explorers. 

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Renewal of METC For One Year

The Mineral Exploration Tax Credit (METC), and the flow-through share system that underpins it, helps attract risk-tolerant capital to a critical stage of the mining cycle. Finance Canada has estimated that every dollar of flow-through financing generates $2.60 of exploration related expenditures in Canada, with much of those funds supporting exploration near remote and Aboriginal communities. Created in 2000, the METC has been renewed by successive governments because it is a proven, effective incentive that has stimulated investment in grass-roots exploration. In light of the worsening fiscal conditions for the junior exploration sector, PDAC recommends the METC be renewed for one year.

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Support Mineral Exploration in Remote and Northern Canada

Remote exploration projects have average costs of 227% more than non-remote projects. In the most remote regions, costs are 280% higher than non-remote projects. A PDAC study revealed the disproportionate impact the infrastructure deficit has on the ability of companies to move a mineral deposit discovery into production in the territories, with 85%, 69% and 77% of existing discoveries in Nunavut, Northwest Territories and Yukon remaining undeveloped, respectively. The result is that resource potential remains stranded, and remote communities are unable to benefit from the economic opportunities. If fiscal policy can facilitate infrastructure investments that reduce costs by 10%, this could result in half a dozen additional precious or base metal mines in remote areas, with significant impacts on northern employment, business development and government revenue generation. To support mining in remote and northern areas, the Government of Canada should expedite the creation of the promised Canada Infrastructure Bank and ensure funds are dedicated for resource-development-related infrastructure projects in remote and northern Canada.  

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Investments in Aboriginal Communities to Support Participation

PDAC recommends that the Government of Canada support efforts to enhance the participation of Aboriginal people in the minerals industry through:

  • Foundational social investments (housing, water, education, infrastructure) that contribute to improved health and educational outcomes for Aboriginal communities.
  • Targeted funds for skills training and entrepreneurship to assist Aboriginal people in securing employment and seizing business development opportunities generated by the industry.

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