In its pre-budget submission to the Government of Canada, the Prospectors & Developers Association of Canada (PDAC) outlines its priorities for Federal Budget 2016 to support Canada's mineral exploration and development sector. The PDAC recommends the Government take action to improve the flow of capital to the junior exploration sector, and address the infrastructure deficit in northern and remote Canada.
"A healthy junior mineral exploration sector is vital to the continued prosperity of Canada's minerals and metals industry-an industry that contributes 4% of GDP and employs over 375,000 workers across the country," says PDAC President Rod Thomas. "Canada's junior mineral exploration sector is world-class, and has made 70% of all discoveries in Canada over the last 10 years."
While the minerals sector is a key driver of the Canadian economy, it currently faces challenges that threaten its ability to continue to be a source of economic growth. The industry is in the midst of a prolonged downturn in exploration financing that has had a significant impact on financing available for the junior exploration sector.
"With financing for exploration falling over 90% since 2007, policy tools that encourage investment in exploration and ensure that the money raised is spent in Canada are extremely important," adds Thomas. "To address this financing downturn, PDAC is calling for the increase of the Mineral Exploration Tax Credit (METC) to 30% for a period of three years. This will provide much-needed predictability to investors and foster confidence that will help capital flow back to exploration companies."
The PDAC is also calling for infrastructure investments in northern and remote regions to support resource development. Remote exploration projects cost up to 2.27 times more than non-remote projects, while very remote projects face costs up to 6 times more, hindering exploration and economic development in these regions. The PDAC supports the Government decision to establish an Infrastructure Bank and is calling for dedicated funds for resource-development-related infrastructure projects in remote and northern Canada. The PDAC looks forward to working with the Government of Canada as they fulfill this important commitment.
To view PDAC's full recommendations for Budget 2016, please visit www.pdac.ca.