Quebec Mines Minister Raymond Savoie says the federal government would be “shooting itself in the foot” if it were to eliminate flow-through share financing for mineral exploration.
“I would also be ghastly surprised if flow-through were not maintained at the current level of deductions,” he said, adding that Ottawa may make “slight alterations” to the popular tax incentive. (The federal government allows a tax writeoff of $1.33 for every dollar spent on exploration in Canada.)
When asked to comment on the rumor that the Finance Dept. may reduce the deduction to 100% from 133%, Mr Savoie said: That would be disastrous for junior mining and grassroots exploration in Quebec
“The Golden Triangle area of Quebec (comprising Rouyn, Val d’Or and Chibougamau) has benefitted tremendously from flow-through. There are about eight mines in Abitibi that will be in production relatively shortly — and it’s all due principally to flow-through.”
He said he has asked Ottawa to maintain flow-through in Quebec for 3-year periods in order to give some stability to the tax structure. (The federal government collects personal income taxes from all provinces except Quebec, which has operated its own income tax since 1954.)
“Once we’ve got it for three years in Quebec, the leaders of the industry can organize themselves on a long-term basis.”
He added that Ottawa is unlikely to agree to the proposal until after federal Finance Minister Michael Wilson unveils his long-awaited white paper on tax reform, June 18.
Mr Savoie was in Chibougamau to attend the official opening of the Joe Mann gold mine. The mine is owned by Meston Lake Resources which, in turn, is 65% owned by Campbell Resources.
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