The Canadian Government has announced plans to extend the mineral exploration tax credit for two additional years to support the country’s mining sector, reported Reuters.
The capital market mechanism provides investors with a 15% tax credit for investing in flow-through shares of smaller mining companies.
It was due to expire on 31 March but will now provide continued support for capital-raising in exploration projects.
Natural Resources Minister Jonathan Wilkinson confirmed the extension as a strategic measure to ensure the mining sector has the necessary tools to raise capital.
The extension is also seen as a way to offer companies an alternative to Chinese capital amidst Canada’s stringent stance on investments from Chinese state-owned enterprises.
Wilkinson said in an interview: “There was some degree of anxiety on the part of the sector, especially the juniors, whether it was going to be renewed.”
The extension is expected to inject C$110m into the sector, supporting mineral exploration investment.
The announcement is set to be made at the annual Prospectors and Developers Association of Canada conference in Toronto, a key mining industry event.
It comes amid concerns over potential trade tensions in North America, with US President Donald Trump threatening to impose a 25% tariff on most Canadian goods.
Canada is also preparing for potential export controls on critical minerals from China, with Wilkinson highlighting Canada’s offer of a secure supply of minerals such as germanium and gallium to the US.
In anticipation of possible tariffs from the US, Canada has prepared retaliatory measures and is considering future tariffs on commodities such as zinc, copper and nickel.
Amidst these developments, industry leaders are calling for more government support.
BHP CEO Mike Henry expressed concerns over Canada’s declining competitiveness in mining, citing the need for faster permitting processes.
Henry emphasised the importance of continual improvement, despite BHP’s positive experiences in Canada, including the development of a significant potash mine in Saskatchewan.
