The Tax Environment

The taxes imposed by any particular 
government are crucial to the viability of 
a mining project. Too high a tax burden 
can make a project uneconomic even 
though the project may have excellent 
mining fundamentals.

Canada’s system of government 
consists of a federal government and 
10 provincial governments. Canada 
also has three territories, which are 
governed by the federal government. 

The federal government, the provinces, 
and the territories each levy income 
taxes on corporations and individuals. 
With the exception of Prince Edward 
Island (which has no mining activity), 
each province and territory also levies 
separate mining taxes or royalties on 
mining activities. For tax purposes, there 
is little distinction between a province 
and a territory; consequently, any 
reference in this book to an unspecified 
province includes a territory.

Table 1: Prices of Gold, Silver, Lead, and Zinc, December 31, 2000, June 30, 2011, and June 30, 2013 (in US dollars)

12/31/2000

6/30/2011

6/30/2013

Unit

Gold

$ 272.25

$ 1,511.40

$ 1,234.53

ounce

Silver

$ 4.60

$ 35.08

$ 19.68

ounce

Lead

$ 470.00

$ 2,681.75

$ 2,057.00

tonne

Zinc

$ 1,025.50

$ 2,293.75

$ 1,822.50

tonne

Sources: Forex; Bloomberg; and London Metal Exchange

© 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.

 Introduction 

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