Canada extends mineral exploration tax credit to support early-stage development

Canada’s minister for Natural Resources has confirmed that the government is extending its 15% mineral exploration tax credit by two years.

Speaking at the annual Prospectors & Developers Association of Canada (PDAC) convention in Toronto, Minister Jonathan Wilkinson said the tax credit tax credit is expected to create approximately $780 million in flow-through share investment to support mineral exploration.

The mineral exploration tax credit, a capital market tool that offers investors a 15% tax credit to invest in flow-through shares of small project holders, was due to expire on 31 March.

‘Crucial piece’ for mining

“I am very pleased to announce that the mining exploration tax credit will be extended for another two years,” Mr Wilkinson told the PDAC audience.

“This is a crucial piece to ensure capital is directed into early-stage mine development.”

The minister also revealed that the second round of the government’s critical minerals infrastructure fund is open for project applications.

The fund holds approximately $550m, with a critical minerals development fund to also be topped up by approximately $55m, aimed at freeing up $122m to help develop mining sites, primarily in the north of the nation.

Driving rapid development

The minister said that, while other countries isolate themselves from foreign investment, Canada is “open for business.”

Mr Wilkinson added that the new measures announced at PDAC were meant to drive “rapid development” of the nation’s critical minerals sector.

“In the exploration stage of the mining space, there is a need to incentivise risk capital and there is presently not enough capital flowing into this space,” he said.

“Federal instruments have been important tools in creating the incentives that are necessary for this critical part of the value chain to advance and the mining exploration tax credit has been critical in this regard.”