VANCOUVER — With thick fog blanketing Vancouver, B.C. Premier Christy Clark kicked off the city’s biggest mining conference of the year — Mineral Exploration Roundup 2014 — with a speech that included a commitment to extend the B.C. flow-through shared tax credit through 2014.
“It has made a heck of a difference in raising revenue in B.C. [for mineral explorers],” Clark said in her remarks. “We estimate that that’s about a $10-million tax credit this year, but a small price to pay for the tremendous amount of investment that it attracts to our province.”
Flow-through shares let corporate tax deductions “flow through” from the company to the investor. The B.C. mining tax credit allows individual investors who buy flow-through shares in exploration companies to claim a non-refundable tax credit equal to 20% of their flow-through expenditures.
For example, a B.C. investor with a taxable annual income of more than $113,800 who invests $1,000 in flow-through shares would receive tax credits and tax savings totalling $618.
That represents a net benefit of 62% of the investment, directly encouraging investors to put venture capital into mining flow-through shares. The result is another potential pool of capital for junior explorers, which is a blessing for many, as they are having trouble accessing conventional capital in today’s tough markets.
At a press conference Clark said her government is considering making the credit a “permanent” one.
The mining sector contributed more than $8.3 billion to the B.C. economy in 2012.
Mineral-exploration spending in B.C. totalled $476 million in 2013, down from 2012’s $680-million record. However, Gavin Dirom, the CEO of the Association for Mineral Exploration British Columbia (AME BC), notes that $476 million is still the second-highest amount spent on mineral exploration in B.C. for a single year, and represents 20% of all exploration activity in Canada. Ten years ago B.C. only attracted 5–6% of Canada’s exploration spending.
Further back, in the 1990s, exploration spending in the province averaged just $26 million a year.
And the B.C. mining sector is expected to continue growing. Over the next 10 years, Clark says the mining sector alone is expected to provide 16,700 job openings. She was also reaffirmed that mining employs more First Nations workers than any other industry in B.C.
Clark became premier in March 2011. Six months later her team introduced a jobs plan that included an ambitious goal of cutting in half the time it takes to process mining-exploration permits. Two and a half years later, Clark says the government has achieved that goal.
That jobs plan included a target of building eight new mines and expanding nine others in B.C. by 2015. That goal is still a ways off, but there has been progress: two new mines are in operation, five others are under construction or permitted, and the provincial government has approved seven mine expansions.
In her remarks Clark announced a review of the Environmental Assessment Office. Clark has charged Environment Minister Mary Polak with making that office “as effective and efficient as we possibly can.”
Clark was flanked by members of her cabinet as she opened Roundup, the annual technical convention put on by AME BC. Minister of Energy and Mines Bill Bennett, Minister of Aboriginal Relations and Reconciliation John Rustad, Minister of Transportation and Infrastructure Todd Stone, and Minister of the Environment Polak were in attendance, as were two local Liberal members of the legislative assembly.
The premier acknowledged the significant role mining plays in the B.C. economy. She noted that her grandfather, great-grandfather and great-great-grandfather had all worked in the resource industry, and that “no matter who we are, no matter where we live in B.C., we somehow stand on the shoulders of those who have worked in resources through sweat blood and tears, through tough times and good times, to build the prosperity that we enjoy today.”
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