The Mining Association of Canada (MAC) has said the new federal Budget for 2013 is a mixed bag when it came to its impacts on the Canadian mining industry.

MAC said it was encouraged by the significant new measures announced to address skills shortages, including the establishment of a Canada Job Grant, support for more paid internships, the reduction of barriers in apprenticeship accreditation, the reallocation of funds to promote education in high-demand fields and funding for the Yukon College Centre for Northern Innovation in Mining.

The association added the Canadian mining sector appreciated government’s enhanced Aboriginal training-to-employment programmes and a boost in scholarships and bursaries, which is proportionally the largest private sector employer of Aboriginal peoples in Canada.

The MAC also welcomed government’s proposal to provide $37-million over the next two years to support research partnerships with industry through the granting councils.

“As an industry that will require an estimated 145 000 new workers over the next ten years, we are pleased that skills and labour training emerged as a key theme of the federal Budget. This attention underscores [not only] the incredible opportunities before Canadians for well-paying jobs, but also the current skills gap that acts as a barrier for workers in finding employment, especially for positions that are highly skilled or technical in nature,” MAC president and CEO Pierre Gratton said.

Mining Industry Human Resources Council executive director Ryan Montpellier added that the Budget supported the priorities championed by the council’s stakeholders as necessary to mitigate the skills shortage – skills development, Aboriginal training and robust labour-market information.

“This is essential to keep our industry sustainable as we move forward in addressing the mismatch of skilled workers with available jobs and the huge exodus of retiring workers in the next ten years,” he said.

The Budget extended the 15% Mineral Exploration Tax Credit (METC) for an additional year, an important tax incentive for the junior exploration sector. Its renewal is critical at this time, given market jitters and the challenges faced by junior companies in raising high-risk capital.

Unfortunately, the 2013 Budget also announced the elimination of the Accelerated Cost of Capital Allowance for new mines and significant mine expansions. The Budget also reduced the deduction rate for preproduction mine development expenses.

Historically, certain preproduction mine development expenses, such as those related to removing overburden or sinking a mine shaft, were eligible for a 100% deduction under the Canadian Exploration Expense. As of 2018, this would be moved to the Canadian Develop-ment Expense, where relevant expenses will only be eligible for a 30% deduction.

“For the second federal Budget in a row, the government of Canada has removed mining-specific tax measures, which will negatively affect mining project economics. While the government has stated it is removing these measures to bring more ‘tax neutrality’ to Canada’s corporate tax system, Budget 2013 in the same breath extends or creates identical measures for other sectors of the economy,” Gratton said.

While not specifically referenced in the budget, MAC was eager to continue dialogue with the federal government on the Geomap- ping for Energy and Minerals (GEM) pro-gramme, which was set to expire in the current fiscal year. GEM provided critical geoscience knowledge necessary for exploration to guide investment decisions, as well as to inform government before it made land-use decisions, such as the creation of parks and other protected areas.

PDAC Applauds Budget

Meanwhile, the Prospectors and Developers Association of Canada (PDAC) said it sup- ported the [Stephen] Harper government’s Budget announcement of its renewed commitment to the METC, as well as critical investments in skills training and Aboriginal communities.

“The mineral exploration industry is a key driver for our economic recovery and provides critical economic stimulus to some of Canada’s most remote communities. The government of Canada’s support for industry is recognised and appreciated,” PDAC executive director Ross Gallinger said.

The PDAC said exploration and mining remained a strategically important sector to the Canadian economy. The industry generated revenue and stimulated growth across the length and breadth of the country and had a substantial economic impact on the nation’s North and on Aboriginal communities.

“We are pleased that the federal government has demonstrated its support for our sector by renewing the METC. This programme has a proven track record of keeping jobs and investment in Canada and will continue to encourage investment in Canadian exploration projects,” Gallinger said.

He added this was a positive step on behalf of the government to ensure that Canadian companies had access to the financial instruments necessary to remain competitive, particularly given the capital-raising challenges many exploration companies were currently facing.

The PDAC reaffirmed its support for the ‘Economic Action Plan 2013’ commitments that provided support for skilled trades and post-secondary education.

“The PDAC is very supportive of the investments in education and training, which we believe will help provide all Canadians with greater choice and opportunity, specifically, the diverse range of career options within the exploration and mining sector,” Gallinger noted.

The PDAC said it was also eager to continue dialogues with the federal government on the GEM programme.