Quebec Sees Spring Decision on New Mining RoyaltiesFrederic Tomesco
Quebec Natural Resources Minister Martine Ouellet, who is looking for ways to raise more revenue from the mining industry, said her government will probably decide whether to increase royalties in the next few months.
“We want to take a decision relatively soon, I would say in the spring of 2013,” Ouellet told reporters today at a conference on royalties in Montreal. ‘Mines are continuing to operate and there are investors who wish to invest in Quebec and who want to know the fiscal environment.’’
Quebec accounts for about 1 percent of global gold output. Its 23 active mines make it the fourth-biggest mineral producer in Canada, after Ontario, Saskatchewan and British Columbia. Mining executives have told Ouellet’s government that an increase in royalties would mean higher unemployment.
Ouellet says the province is considering a “mixed” regime that would comprise two types of levies: a 5 percent royalty on gross output and an as yet undefined tax on gross mining profits that exceed a certain level.
Mining companies operating in Canada’s second most populous province already pay a 16 percent provincial tax on profits. Mining royalties brought in C$351 million ($344 million) in 2011 on gross output of about C$7.3 billion, according to Quebec government figures.
Mining investment in Quebec will probably drop 16 percent to C$4.1 billion in 2013, government data also show. Last year’s C$4.8 billion total was the highest since at least 2000.
“We are convinced that it is possible to increase royalties in Quebec while preserving a stable and competitive climate for investors,” Ouellet said.
“We want to increase royalties, we want a guaranteed minimum revenue and we create a better distribution of wealth,” she said. “We are very open-minded on the different means of achieving this.”