June 9, 2020 / 2:40 PM / a month ago

Mexican president urges Canadian mining firms to pay taxes

MEXICO CITY (Reuters) - Mexican President Andres Manuel Lopez Obrador said on Tuesday some of Canada’s mining firms were behind on their tax payments and urged the Canadian government to lean on them to avoid the dispute reaching international tribunals.

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador holds a news conference at the National Palace in Mexico City, Mexico, March 17, 2020. REUTERS/Henry Romero

“There are a few Canadian mining companies that are not up-to-date, they want to go to international tribunals,” Lopez Obrador told a regular government news conference.

The president then urged Canada’s ambassador to prevail on the companies that there was no need to seek legal redress because “it’s very clear that they have these debts with the tax authority, and that (Canada) help us to convince them.”

He did not name any specific companies.

A spokeswoman for Canada’s embassy in Mexico said the embassy does not comment on or confirm private interactions between governments.

Last month Canada’s First Majestic Silver Corp said it had served notice to Mexico’s government under its North American trade treaty obligations to begin talks to resolve taxation disputes.

First Majestic did not return a call seeking comment.

Nearly 70% of foreign-owned mining companies operating in Mexico are based in Canada, according to Global Affairs Canada. The value of Canadian mining assets in Mexico totaled C$18.4 billion in 2017, according to the Mining Association of Canada.

Lopez Obrador has made cracking down on tax breaks a priority. A number of major companies, including the Mexican unit of U.S. retailer Walmart Inc and Mexican conglomerate Femsa have recently agreed to make tax payments to Mexico.

Lopez Obrador also said Japanese automaker Toyota Motor Corp is in the process of doing the same thing. Representatives for Toyota in Mexico had no immediate comment.

The president’s comments come as Mexico and the private sector have also been having a major dispute on energy policy.

Lopez Obrador has allowed officials to call into question contracts worth billions of dollars signed by companies from Canada, the United States and Europe under the previous administration, setting up a potentially messy legal scrap.

Reporting by Mexico City Newsroom; Additional reporting by Sharay Angulo in Mexico City and Jeff Lewis in Toronto; Editing by Dave Graham, Dan Grebler and David Gregorio

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