This is the second edition of this book. The first edition was published in 2011. In the two 
intervening years, the global mining industry has faced a number of new challenges. In 
particular, metal prices have retreated from their previous peak while mining costs have 
continued to increase, M&A activity and financing activities have slowed measurably, and 
many governments have taken steps to claim a larger share of production revenues through 
new or increased taxes and varying forms of nationalization.

The prices of most metals have increased dramatically since the beginning of this century. 
This trend has led to a heightened interest in mining activities around the world and in 
particular in Canada. Despite the recent decline in prices, it is expected that the demand for 
metals will continue to be strong over the long term in response to further industrialization 
in developing countries. This increased demand will result in even greater interest in mining 
activities in Canada.

As the trend of rising production and development costs has continued over the last two years, 
there has been a noticeable shift in the focus of many mining corporations from production 
growth to cost containment and return on investment. We anticipate that mining corporations 
will be successful in controlling further escalation of their development and production costs. 
As a result, we continue to see a very bright future for the mining industry in Canada.

When cyclical industries experience a boom such as occurred in the mining industry in the 
first decade of this century, there is a tendency for governments to increase their share of 
production revenues. This has occurred on a worldwide basis in the mining industry, and 
Canada has been no exception. Although governments in Canada at both the federal and 
provincial levels have increased their taxation of the revenues of mining corporations, 
through increased rates and the phase-out of certain mining-specific tax incentives, as we 
explain in this book, the tax regime in Canada is still very favourable for the mining industry.

This book is intended for business professionals and others with an interest in the mining 
industry. It outlines the provisions of Canada’s federal and provincial income tax legislation 
applicable to domestic and foreign mining activities. It also summarizes the provincial 
statutes that impose mining taxes and royalties on those engaged in domestic mining 
activities. Finally, it describes other legislation that is relevant to mining activities in Canada.

We trust that this book will be a helpful summary of the main features of our current mining 
tax regime, both to readers who intend to undertake mining activities in Canada and to 
readers who wish to invest in Canadian mining entities. We also hope that it will be a useful 
guide in everyday dealings with taxation matters affecting the mining industry.

Readers who require further information or assistance are invited to contact any of KPMG’s 
mining professionals listed on the following page.

Statements of law in this book are current to June 30, 2013.

Brian Carr 

 

Partner & General Editor

Scott Jeffery 

 

Partner & Deputy General Editor

Preface