Canadian budget update full of goodies for miners

In a move long sought by mineral explorers active in Canada, Canada’s federal government has extended its mineral exploration tax credit (METC) for five years, in contrast to the prior tradition of renewing it annually.

The news came in November as part of the government’s fall economic statement, which included a $17.6-billion suite of business-friendly tax measures and investments that should benefit firms in the mineral sector.

The METC allows qualifying explorers (that don’t generate revenue from which to deduct expenses) to pass deductions on to investors by selling them flow-through shares. Investors also get an extra 15% tax credit when investing in what are now known as “super flow-through shares.”

The latest iteration of the METC was set to expire on March 31, 2019.

The government estimates the METC extension will lower revenues by $365 million over the five years.

Between 2010 and 2016, companies raised an average $505 million each year under the METC, according to the government.

The Prospectors and Developers Association of Canada (PDAC) says this marks the first multi-year extension of the METC since its iteration was introduced in 2000. It was later renewed annually by successive governments.

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