The Québec Government Announces A New Mining Tax Regime “Fair For All”

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The new Québec mining tax regime was announced on May 6th 2013, by the Minister of Finance, Nicolas Marceau, accompanied by the Minister of Natural Resources, Martine Ouellet.

The Québec Government has presented a new regime under which all mine operators in Québec will have to pay a minimum mining tax.

The mining corporation will be required to pay the greater of two amounts, either a minimum mining tax on ore extracted or a mining tax on annual profit for a fiscal year starting after December 31, 2013.

  • The minimum royalty rate is set at 1% for the first $80 million of ore extracted and at 4% of the value of ore extracted in excess of $80 million, these rates being applied to the output value of the ore at the mine shaft head.
  • The mining tax on profit will be calculated according to a progressive rate structure. The new tax rates to be applied will be 16%, 22% or 28% depending on profit margin, the Government having provided for three segments of profit margin (from 0% to 35%, from 35% to 50% and from 50% to 100%).

Minister Marceau also stressed the importance of jobs in Québec for processing activities, and therefore has added incentives in the new tax regime in an effort to increase processing in Québec.

Minister Ouellet spoke briefly about the future Mining Act and indicated that this new mining tax regime has been developed in order to be more transparent and in the context of more responsible development of mining resources.

The details relating to the newly announced mining tax regime may be found in the following documents which have been made available by the Government:

  • In English

- Press Release: http://www.finances.gouv.qc.ca/documents/Communiques/en/COMEN_20130506.pdf

- Full document: http://www.finances.gouv.qc.ca/documents/autres/en/AUTEN_NewMiningTaxRegime.pdf

- Charts: http://www.finances.gouv.qc.ca/documents/autres/en/AUTENCharts_MiningTaxRegime.pdf

- Information bulletin: http://www.finances.gouv.qc.ca/documents/bulletins/en/BULEN_2013-4-a-b.pdf

  • In French

- Communiqué de presse: http://www.finances.gouv.qc.ca/documents/Communiques/fr/COMFR_20130506.pdf

- Document complet: http://www.finances.gouv.qc.ca/documents/Autres/fr/AUTFR_NouveauRegimeImpotMinier.pdf

- Graphiques: http://www.finances.gouv.qc.ca/documents/Autres/fr/AUTFRGraph_RImpotMinier.pdf

- Bulletin d’information: http://www.finances.gouv.qc.ca/documents/bulletins/fr/BULFR_2013-4-f-b.pdf

This article was written by Ann Bigué and Dominique Quirk.

Topics:  Canada, Mining, Tax Legislation

Published In: Energy & Utilities Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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