Budget draws mostly praise from Mining Associations.

Three of Canada's top mining associations have praised the one-year extension of a mineral exploration tax credit in Canada's proposed federal budget, but expressed concern about the budget's failure to support geosciences mapping.

Canadian Prime Minister Stephen Harper proposed a Canadian $233.4 billion (US$198 billion) budget this week. The Canadian economy has benefited from soaring commodity prices and record corporate profits.

Budget 2007 calls for extending the 15% mineral exploration tax credit by one year until March 31, 2008. Dan Jepsen, President and CEO of the Association for Mineral Exploration in British Columbia, said the tax credit complements the provincial government's extension of the provincial super-flow through program."

The budget also proposes investing more than $10 million over two years to create or expand protected areas in the Northwest Territories. In total, Budget 2007 invests $4.5 billion for environmental initiatives. The budget also allocates $60 million over the next two years to create a Major Projects Management Office aimed at streamlining the review of large natural resource projects. The government hopes to cut the average regulatory review period from four years to about two years.

Jepsen said he was "particularly encouraged by the federal government's commitment" for the Major Projects Management Office. "Out of 52 mining projects involved in or about to enter environmental assessment process nationwide, 25 are in B.C.," he explained. "This initiative will reduce delays in the federal government assessments and regulatory approval process while ensuring that mining projects benefit local communities and First Nations."

The Mining Association of Canada said Tuesday that it "enthusiastically supports the government's attention to improving the project review process." MAC President and CEO Gordon Peeling explained that although resource sectors drive economic growth in Canada, "federal project review has become the most significant disincentive to future investment."

Prospectors and Developers Association President Patricia Dillon Tuesday said, "This tax credit, which can be applied only to exploration in Canada, gives Canada a competitive edge and encourages resource industries."

In his presentation Monday of the budget, Canadian Minister of Finance James M. Flaherty called for an accelerated capital cost allowance to promote promising new technologies for oil sands and other industries. However, Flaherty called for the phase out of the Accelerated Capital Cost Allowance (ACCA) for general investment in oil sands by 2015.

MAC expressed its disappointment that the allowance for oil sands mining will be phased out. "While MAC acknowledges that grandfathering of ACCA for existing projects lessens the impact of this proposed measure, it still puts a chill on oil sands investment and development-a major economic engine of the economy," the organization said Tuesday in a news release.

While Budget 2007 allocates $1.3 billion in new funds for science and technology research, according to Flaherty, the budget does not support the Cooperative Geological Mapping Strategy. MAC's Peeling said, "Renewed investment in geoscience is long overdue and critical in addressing the looming crisis in declining base metals reserves, which is placing Canadian smelters and refineries at risk."

"Successive governments have failed to address the need for reinvestment in minerals science research and mapping, which is integral to creating opportunities in northern Canada as well as in maintaining Canada's global position in mining," Peeling added.

AME's Jepsen said "A high quality geoscience database is a key competitive advantage internationally, especially as jurisdictions improve the quality of their databases." He also noted that Canada's metal reserves are at a 25-year low.

PDAC's Dillon said, "Canada has a large land mass and requires continuous renewal and improvement to our geoscience knowledge base. This is critical in the effort to replenish our declining reserves and contributes in important ways in the areas of environmental decision-making, sovereignty and public safety."

In a news release, MAC termed proposed tax incentives for the manufacturing and processing sector for investment in machinery and equipment "of particular interest to the Canadian mining industry.

All three mining associations praised budgetary proposals for labor market training and funding for the Aboriginal Skills and Employment Partnership.

The budget also proposes that $16 billion to be spent over seven years for infrastructure, including base infrastructure funding of $25 million per year for each province and territory.

source:www.mineweb.net