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Government: Mining & Exploration Tax Incentives

Tax Incentives: Recent Manufacturing R & D Film & Video Education Mining Federal

To ensure that Manitoba’s mining sector remains attractive to developers, direct mining taxation has been effectively lowered through a number of initiatives, including the Tax Holiday for New Mines, Off-site Exploration Allowance and the Processing Allowance.

Budget 2009 announced changes to the Mining Tax. Effective for fiscal years ending after June 30, 2009, the Mining Tax rate will be reduced from 18% to the following graduated rates:

• 10% when total operator’s profit is less than $50 million
• 15% when total operator’s profit is between $55 and $100 million
• 17% when total operator’s profit is over $105 million

Notch rates will apply for operators with total profit between the tax thresholds.

Indirect taxation initiatives include sales tax exemptions on geophysical and exploration equipment, on electricity used in mining, and on certain prototype equipment, as well as a motive fuel tax exemption on diesel fuel for off-road mineral exploration and for certain mining activities. Additionally, unclaimed federal exploration and development expenses are deductible for Corporation Capital Tax purposes, for all mining companies.

For details on the various tax incentive programs related to mining, please visit: www.gov.mb.ca/stem/mrd/busdev/incentives/tax.html

In addition to incentives directed at the mining industry, Manitoba offers incentives to the petroleum industry, through the Manitoba Drilling Incentive Program, which provides a holiday from Crown royalties and freehold production taxes with respect to production from new wells and from qualifying wells where a major workover has been completed.

For details on the Manitoba Drilling Incentive Program, please visit: www.gov.mb.ca/stem/petroleum/regime/index.html