The new federal budget presented this past week has some welcome nuggets for the mining exploration industry.
The Mining Association of Canada (MAC) said it was pleased with the "unprecedented support and extensive measures" which includes $80 million for a public geoscience and exploration program, along with an improved tax deal for critical minerals related to the creation of electric vehicle batteries.
The association said it also welcomed the doubling of the Mineral Exploration Tax Credit to 30 per cent for targeted critical minerals, including nickel, copper, cobalt, rare earths and uranium.
Budget 2022 reinforces the government's commitment to climate action and supply chain security goals by providing strategic funding and programmatic supports to Canada's minerals and metals sector, underscoring a recognition that the world is better off on climate change when Canada wins on critical minerals, said the MAC news release.
The federal plan has also allocated $1.5 billion for new infrastructure investments to unlock new mineral projects in critical regions, such as Northern Ontario's Ring of Fire. The federal announcement ties in with the recent announcement by the Ontario government for a critical minerals strategy to support the exploration and mining of those minerals that will be used in the manufacture of new battery technology to support electric vehicles.
"The tax credit would apply to certain exploration expenditures targeted at nickel, lithium, cobalt, graphite, copper, rare earths elements, vanadium, tellurium, gallium, scandium, titanium, magnesium, zinc, platinum group metals, or uranium, and renounced as part of a flow-through share agreement entered into after Budget Day and on or before March 31, 2027," said the Finance Canada release.
"Budget 2022 proposes significant funding to make Canada a more attractive destination for critical minerals investment and to secure valuable agreements that would increase production of goods like electric vehicles and batteries," the federal statement continued.
Pierre Gratton, MAC's president and CEO, said the budget has put the Canadian mining industry in a more competitive position.
Gratton said the improved tax deal "has positioned Canada in a leading competitive position for new investments up and down the minerals and metals sector and beyond. Doubtless, these measures will give Canada a lock on the top spot for global exploration investment."
Gratton said the budget will also "send a strong signal to our allies in the US and Europe that Canada is and will remain a trusted source for responsibly mined and processed materials essential for the world's low carbon future and security."