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Quebec is regarded as one of the most attractive jurisdictions in the world for mining, if not the very best. But is that about to change? The Parti Québécois victory in Wednesday’s election has raised concerns that changes could be coming, both to Quebec’s mining-friendly tax regime and to Plan Nord, its $80-billion northern development strategy.
While such tweaks are possible, miners in Quebec said they are confident that the highly successful partnership between the province and the industry will continue.
“This is Quebec. In the grand scheme of things, it’s not a place of high political risk for the mining business,” said Matt Manson, chief executive of Stornoway Diamond Corp., which is developing the province’s first diamond mine in north-central Quebec.
On the campaign trail, PQ leader Pauline Marois talked about boosting mining taxes to help pay for increased social spending. She said she would introduce a minimum 5% royalty on the value of metal production, and impose a 30% super-profits tax on mining earnings above an unspecified level. Her party’s stance is that the province’s mineral wealth is being given away for too little.
These changes would follow the tax hikes recently introduced by Jean Charest, who lifted the mining royalty rate to 16% from 12%.
“Discussions about changing mining taxes have been standard in pretty much every election around the world. I don’t think Quebec wins any special prizes on that front,” said Sean Roosen, chief executive of Montreal-based Osisko Mining Corp.
The question is whether Ms. Marois will be able to implement any royalty changes in a minority government. The Liberals will oppose her, and Ms. Marois herself said it will be difficult to get the votes she needs from the opposition.
For the rest of this column, please to the National Post website: http://business.financialpost.com/2012/09/06/pq-victory-casts-doubt-with-miners/