Ontario’s Not Digging Deep Enough
PricewaterhouseCoopers’ biennial guide to Canadian mining taxation, Digging Deeper, features a comparative summary of royalties, mining taxes and corporate taxes for a hypothetical gold mine.
This approach differs from the table I posted yesterday, which displayed royalty and mining tax revenue as a share of the minerals actually extracted from different provinces and territories in 2010.
However, the conclusion is the same: Ontario collects the lowest return. In PricewaterhouseCoopers’ scenario, the Ontario government would collect only 13.5% of the mine’s profits.
The royalty and tax regimes of ten other provinces and territories would collect between 19.1% and 28.6% of profits from the same mine. (PricewaterhouseCoopers excludes Alberta and PEI, which have no operating metallic mines.)
Given that the gold reserves being mined belong to the people of Ontario, 13.5% of profits is a shabby provincial return. And gold seems like a pretty fair basis for comparison since it is Ontario’s most valuable mineral.
Seems Don Drummond has been reading your posts on mining royalties in Ontario:
Recommendation 11-12: Eliminate the Ontario resource tax credit and review the mining tax system to ensure that the province is supporting the exploration and production of minerals in Ontario while receiving a fair return on its natural resources.