Quebec Introduces Minimum Mining Taxes


On May 6, 2013, the Government of Quebec unveiled its new mining tax regime. Starting in 2013, all mining operations will be required to pay a royalty or a tax on profits, whichever is greater under Quebec’s new mining tax regime.

From now on, all mine operators active in Québec will have to pay a minimum royalty to the Government applied to the value of the ore extracted at the mine shaft head. To take the situation of smaller operations into account and make it easier to start a mining project, the royalty rate will be set at 1% for the first $80 million of ore extracted. For the excess, the rate will be 4% of the value of ore extracted. This royalty does not consider whether the operation is profitable. Also, this royalty tax does not permit deductions for other royalties that may also be payable on the same ore extracted.

The mining tax on profit will be calculated according to a progressive rate structure. The new tax rates to be applied will be 16%, 22% or 28% depending on profit margin. Quebec has provided for three segments of profit margin (from 0% to 35%, from 35% to 50% and from 50% to 100%).

Mining operators in Quebec will be required to pay in every fiscal year starting after December 31, 2013, mining taxes corresponding to the greater of its mining tax royalty or its mining tax on its annual profit for the fiscal year.

If you have questions about Quebec’s new mining tax, contact any one of Clark Wilson LLP’s Corporate Finance & Securities Group.