Quebec lays out plans to raise mining taxes
(Reuters) - The Quebec government has laid out plans to extract up to C$1.8 billion (US$1.8 billion) more in taxes from the mining sector over the next 12 years, with measures that include a minimum royalty, arguing that Quebecers need to see greater benefits from mining ventures in the province.
The new taxation plan, less punishing than a scheme the separatist Parti Quebecois had promised in its 2012 election campaign, came as sagging demand and falling metal prices cut into already tight margins in the mining sector.
The plan, posted on the provincial government website late on Monday, would see miners pay the greater of two options: either a royalty on the value of ore, set at 1 percent for the first C$80 million and 4 percent for anything over that, or a graduated tax on profits, ranging from 16 to 28 percent.
The Parti Quebecois had previously proposed a 5 percent royalty on the gross value of all mining output, and a "super-tax" on profits above a certain point.
Dale Coffin, a spokesman for Agnico-Eagle Mines which operates three gold mines in Quebec, said the overall impact on Agnico's operations appeared to be minor, although he noted the company was still reviewing the proposed changes.
"Hopefully this will signal an end to this period of uncertainty, as it is important that stability and investor confidence is restored for the long-term viability of the industry," he said.
Metal prices hit record highs after the global financial crisis, prompting governments around the world to demand a bigger slice of profits from mining companies.
Quebec said the plan would increase government revenues by a total of between C$770 million and C$1.8 billion over the next 12 years. In 2015 revenues should be C$50 million higher than under the existing regime, introduced by the previous, Liberal, government.
"Quebecers were justifiably dissatisfied with the Liberal regime because some mining corporations could continue developing natural resources over a long period without paying a penny in royalties," Quebec Finance Minister Nicolas Marceau said in the statement. Continued...