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New fiscal measures to promote mining exploration in Québec
Luc Chouinard and Jean Désilets
Direction de la politique et de l'économie minérales In addition to offering extremely attractive tax treatment with regard to mining, the gouvernement du Québec has continued to innovate by creating a new refundable corporate tax credit for mining exploration expenses incurred by companies in Québec after March 30, 2001. This new measure will lend increased financial support to mining companies by significantly decreasing investment costs, i.e. the risk they assume in carrying out exploration activities. The new tax credit will also have the advantage of attracting foreign investment, notably strategic inter-company alliances for exploration projects in Québec. The tax benefit is granted regardless of the funding source. Under Québec's Taxation Act, this fiscal measure corresponds to: - 40% of the eligible exploration expenses incurred by an exploration company in Québec and 45% if the expenses are incurred in Québec's Mid-North or Far North regions;
- 20% of the eligible exploration expenses incurred by a producer and 25% if the expenses are incurred in Québec's Mid-North or Far North regions.
Exploration expenses eligible for the tax credit under Québec's Taxation Act also allow a company to claim the refundable credit for losses available under the Mining Duties Act. | THE NEW REFUNDABLE TAX CREDIT
for mining exploration expenses | | | Taux du crédit | | Eligible expenses | Type of company | General | Enriched for the Mid-North and Far North | | Exploration costs | Non-producing firm | 40% | 45% | | | Producing
firm | 20% | 25% |
Refundable credit for losses… still available The gouvernement du Québec continues to assist operators (companies and individuals) with their exploration and development expenses by refunding a portion of the costs incurred in the form of a refundable credit for losses.
Under the Mining Duties Act, and throughout Québec, this credit represents a refund of 12% of the lesser of: - the amount of the annual operating loss;
- mining exploration, mineral deposit evaluation or mine development expenses.
This refund is increased to 15% if the expenses are incurred in Québec's Mid-North or Far North regions. | REFUNDABLE CREDIT FOR LOSSES | | Tax credit rate | Eligible expenses | | 12% (of the lesser of) | - mining exploration, mineral deposit evaluation or mine development expenses
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