The Mineral Exploration Tax Credit (METC), which incentivises exploration financing by providing individuals investing in companies exploring for minerals in Canada with a 15% tax credit on eligible expenditures, has to be renewed for at least three years to provide greater certainty and boost confidence for investors in Canadian projects.
This is the view of the Prospectors and Developers Association of Canada (PDAC), which on Wednesday published a document containing its recommendations for the 2019 federal Budget.
Finance Minister Bill Morneau renewed the METC for one year in the 2018 federal Budget, but the PDAC feels that companies require a longer time frame as exploration programmes are carried out in stages over an extended period of time.
“Exploration companies and investors need certainty that they can finance not only the current year of their exploration programmes, but also any subsequent exploration necessary to fully scope the mineral potential of a particular property,” stated the PDAC.
The organisation pointed out that the METC catalysed investor interest in flow-through shares and that it could play an important part in arresting the decline in the country’s attractiveness as a destination for mineral investment.