Fiscal incentives for mining in Canada

"It is easy to throw darts at government - and government often deserves to be a target. This month, Tax Notes examines tax legislation from a different angle, and sees some bright spots.The following article is based on a paper presented by the author at the International Gold Symposium in Rio de Janeiro in August 1989Introduction""No man's life, liberty, or property are safe while the Legislature is in session.”With one federal government, ten provincial governments, and two territorial governments all claiming to have constitutional rights to tax and otherwise regulate Canada's mining industry, and with each of these thirteen governments pursuing their respective rights with some vigor, government involvement in one way or another is an accepted way of life in the industry. While one's initial reaction to government involvement in an industry might be one of scepticism or fear, generally speaking the federal, provincial, and territorial governments in Canada tend to be pro-mining. They recognize the importance of the mining industry to Canada, especially in terms of job creation and exports. It is not surprising, then, to find that an array of valuable fiscal incentives are available to the industry through federal and provincial legislation.This paper summarizes the principal incentives that are inherent in Canada's tax legislation, as well as the Canadian Exploration Incentive Program. Although it is beyond the scope of this paper to deal with all of the incentives that are available, it is noted that various forms of federal or provincial assistance are also available outside of specific legislation, through negotiation with government departments. This latter type of assistance is generally directed toward helping with the cost of infrastructure such as roads or hydro lines, or Jess often toward loan guarantees or similar financing assistance."