Miners call B.C. budget `step in right direction’

The British Columbia government has unveiled a $100-million, 5-year program to stimulate mineral exploration and enhance the mining industry’s ability to compete internationally.

Gary Livingstone, president of the Mining Association of British Columbia (MABC), described the programs and tax changes outlined in the provincial budget as “welcome news” and “a step in the right direction.” Provincial Mines Minister Anne Edwards said members of the industry were consulted in order that practical solutions to key concerns, such as taxation, could be found. “We think our program reflects a joint approach to those issues,” she added.

Highlights include a 5-year capital expenditure incentive for Mineral Tax Act payments, offering 133% deductibility of capital costs for new mines or major expansions. There was also good news for the province’s beleaguered coal industry, which employs more than 3,600 people at various mines. “The mineral tax paid by coal mines will be cut by 50%,” Edwards said. “The tax reduction puts coal mines on the same rates as metal mines. It brings British Columbia rates in line with world competitors and gives some needed relief to our industry.”

All mining companies will be allowed to deduct payments for the provincial Mineral Tax Act against income, in calculating provincial corporation income tax.

Edwards also said the government wants to place increased emphasis on industrial minerals in order to identify export opportunities and market British Columbia products more effectively.

“Overall, the budget sends a positive signal and shows the government is listening to our concerns,” said Susan Campbell, MABC’s director of policy research and finance.

Three programs or initiatives are intended to stimulate exploration: * “Explore B.C.” is a 3-year, $13.5-million incentive to exploration, development and mining companies, providing up to a third of the exploration costs incurred, to a maximum of $150,000 per property.

* Prospectors are given support through a 3-year assistance program, which can provide up to $10,000 for qualified prospectors. This program is aimed at promoting grassroots exploration for new deposits in the province. * Companies will be allowed to “pool” exploration expenditures, thus allowing new flexibility for mining companies to use exploration deductions. “We welcome these programs to stimulate exploration,” Campbell said. “But the current low levels of exploration reflect the need for a greater level of certainty with respect to access to land and security of tenure. This is the number one issue and it still has to be dealt with.”

Edwards said the government is continuing efforts to resolve land use uncertainties so that companies will know where resource development will and will not be allowed.

“The process has not gone as well as we had hoped,” she conceded. “But we are continuing this effort and I think the CORE (Commission on Resources and Environment) process will give us the ability for those lines to be drawn on the map.”