and is refined to a purity level of at least 
99.5% in the case of gold and platinum, 
and 99.9% in the case of silver.

The QST applies to mining products 
shipped to a destination in Québec. 
Mining product shipped to a destination 
outside Québec is zero-rated. As under 
the GST/HST, the sale of precious metals 
is zero-rated for QST purposes regardless 
of where such metals are shipped.

PST

British Columbia 

Effective April 1, 2013, British Columbia’s 
7% PST applied to goods and certain 
services (repair and maintenance, 
telecommunications, and legal services) 
acquired for use in that province. Most 
of the exemptions that existed prior to 
July 1, 2010 under the “old” PST apply 
under the new PST and include:

• machinery and equipment used 

exclusively in the exploration 
for or development of mineral 
resources; and

• machinery and equipment used 

primarily in the processing of minerals.

The sale of mineral products in British 
Columbia is subject to PST unless the 
product is acquired for resale or further 
processing.

Saskatchewan 

Saskatchewan’s 5% PST applies to 
goods and a variety of services acquired 
for use in that province. All equipment 
and materials acquired for use in mine 
exploration, development, and operation 
are subject to PST unless a specific 
exemption applies.

Specific exemptions are provided for:

• equipment designed for and used 

exclusively in mining exploration or 
geophysical exploration; and

• energy used in processing minerals, 

as well as catalysts and direct agents 
used for that purpose. 

The sale of mineral products in 
Saskatchewan is subject to PST unless 
the product is acquired for resale or 
further processing.

Manitoba 

Manitoba’s 7% PST (increased to 8% 
effective July 1, 2013) applies in a similar 
manner to Saskatchewan’s PST. All 
equipment and materials acquired for 
use in mine exploration, development, 
and operation are subject to PST 
unless a specific exemption applies. 
The exemptions include the following 
materials and equipment:

• prescribed equipment used in 

mining exploration or geophysical 
exploration,

• drill bits and explosives used 

in mineral exploration or 
development, and

• prototype equipment purchased 

and used to develop new mining 
technologies. 

Manitoba also provides an 80% reduction 
in the rate of PST on electricity used 
in mining.

The sale of mineral products in Manitoba 
is subject to PST unless the product is 
acquired for resale or further processing.

British Columbia 

Carbon Tax

Cap and Trade Legislation

British Columbia has introduced 
legislation authorizing hard limits 
(caps) on greenhouse gas (GHG) 
emissions through the Greenhouse 
Gas Reduction (Cap and Trade) Act. 
This legislation enables British 
Columbia’s participation in the trading 
system being developed with other 
jurisdictions through the Western 
Climate Initiative. Through the British 
Columbia Reporting Regulation, 
which falls under the Act, reporting 

operations outside the public sector 
that emit more than 10,000 tonnes 
of carbon dioxide-equivalent (CO

2

e) 

are required to report annually. The 
British Columbia Reporting Regulation 
also requires any British Columbia 
business facility that emits 25,000 
tonnes or more of CO

2

e per year to 

complete a third-party audit of its 
annual emissions report. The British 
Columbia Ministry of Environment 
estimates that 160 to 200 British 
Columbia facilities are required to file 
reports, and 80 to 100 of those are 
required to have third-party audits. 
Many of the latter are companies with 
mining operations in British Columbia 
(i.e., the requirement to file is based 
on the location of the actual operations 
and not the location of head office). 
Currently the information is used as 
an inventory of emissions; however, 
if cap and trade is implemented, the 
reported emissions for each sector and 
operation will be used to drive the cap 
and trade process.

Carbon Tax

British Columbia levies a carbon 
tax – a tax based on GHG emissions 
generated from burning fossil fuels. 
Carbon tax applies to the purchase 
or use of fossil fuels within British 
Columbia, including gasoline, diesel 
fuel, natural gas, home heating fuel, 
propane, coal, pentanes, and gas 
liquids. The tax also applies to tires and 
peat used as fuel. Table 14 shows the 
tax rates that apply for the principal 
fuel types as at July 1, 2013.

All consumers and businesses 
purchasing fossil fuels in British 
Columbia are subject to the tax, with 
certain exceptions; for example, fuel 
purchased for air or marine travel out of 
British Columbia and fuel purchased as 
feedstock to produce other products.

For fuels other than natural gas, 
collection and remittance procedures 

© 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