AME Urges Ottawa to Expand Exploration Tax Breaks to Close Financing Gap
Key Takeaways
- •AME is calling on Ottawa to extend exploration tax breaks beyond the discovery stage to cover work needed to advance projects toward becoming mines.
- •Flow-through shares and the Mineral Exploration Tax Credit are existing measures designed to help revenue-lacking junior exploration companies raise capital from investors.
- •The industry group identifies a financing gap between a mineral discovery and the feasibility and permitting work required before mine construction.
- •Canada's federal government has designated critical minerals such as lithium, nickel and rare earths as strategic priorities for the energy transition and supply-chain security.
- •Junior exploration companies, which conduct most of Canada's mineral discovery work, have faced increasingly difficult equity financing conditions in recent years.
Canada is pushing to develop more critical mineral projects, but the Association for Mineral Exploration (AME) says current tax rules leave a financing gap as discoveries move towards becoming mines.
In a sponsored Q&A with The Northern Miner, staff writer Devan Murugan spoke with AME president about the industry body's call for Ottawa to expand exploration tax breaks. AME argues that existing tax measures do not adequately support junior mineral exploration companies as they advance discoveries through the lengthy and capital-intensive process of becoming operating mines.
The debate touches on long-standing features of Canada's tax system for the sector. Flow-through shares allow exploration companies to pass certain exploration expenses to investors, while the Mineral Exploration Tax Credit provides an additional benefit for investors in flow-through shares — measures designed to help juniors, which typically lack revenue, raise capital. Extending such incentives beyond the discovery stage, as AME advocates, would address what the industry describes as the gap between a discovery and the feasibility and permitting work needed before a mine can be built.
The policy discussion comes as the federal government has identified critical minerals — such as lithium, nickel and rare earths — as a strategic priority for both the energy transition and supply-chain security, while junior explorers, which conduct much of Canada's mineral discovery work, have faced harder equity financing conditions in recent years.
The full interview was published by The Northern Miner and is available at the original article: https://www.northernminer.com/regulatory-issues/sponsored-qa-ame-urges-ottawa-to-expand-exploration-tax-breaks/1003894644645/ (access restricted to subscribers).
