Introduction
Canada’s Mining Industry
For over a decade, mining has been one
of Canada’s fastest-growing sectors. The
mining industry is vital to the country’s
economic well-being.
Canada has traditionally been a world
leader in the mining industry. Currently,
it is a leader in the production of potash,
uranium, nickel, and cobalt. Canadians,
largely through the TSX and TSX-V, have
also been leaders in the financing of
mining projects throughout the world.
A significant portion of the equity funds
raised for worldwide mining activities
has been raised in Canada.
The first decade of this century saw
an explosion of activity in the mining
industry throughout the world. This
explosion was fuelled by a dramatic
increase in the prices of precious and
base metals. In the two years since the
first edition of this work was published,
participants in the mining industry have
had to deal with the retreat of metal
prices from their highs. The prices of
gold, silver, lead, and zinc on December
31, 2000, June 30, 2011, and June 30,
2013 are set out in Table 1.
However, analysts believe it is very likely
that the demand for metals will continue
to grow with further industrialization
in developing countries. This increased
demand will result in even greater
interest in mining activities in Canada.
In addition, more recently, mining
corporations have seen their costs
increase faster than metal prices. This
has had a negative short-term impact
on the share prices of many mining
corporations. We are optimistic that the
mining corporations will be successful in
taking the necessary steps to deal with
the escalation of costs. As a result, we
continue to see a very bright future for
the mining industry in Canada.
Finally, Canada and its provinces have
increased their share of mining tax
revenues in the last two years. However,
the tax regime in Canada is still a very
favourable one for the mining industry.
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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A Guide to Canadian Mining Taxation