QUEBEC — A widely-anticipated hike in mining royalties didn’t make it into the Parti Québécois government’s first budget because of time constraints, Finance Minister Nicolas Marceau said on Tuesday.
But he and other cabinet ministers are hammering out that royalty framework for natural resources development, Marceau told the National Assembly.
“We want to bring in these changes in an orderly and responsible manner to ensure the stability of the mining sector. We will consult the industry and the stakeholders concerned about this issue so that everyone benefits from the changes that will be made,” he said.
Earlier, Marceau told reporters that the new regime will be unveiled “sooner rather than later.” “In the time I had at my disposal (since the election), it wasn’t possible to arrive here today with a royalties regime,” he said.
During the election campaign, the PQ said it would introduce a five-per-cent royalty on all mining operations, increasing it to 30 per cent if the mine’s profits reached a certain level. Marceau said he remains convinced that an “obligatory royalty based on the net value and a tax based on excess profits are still viable approaches.”
Opposition parties jumped on the budgetary no-show.
“For years they have been yelling about mining royalties,” former Liberal finance minister Raymond Bachand told reporters.
That the PQ didn’t include its own regime for natural resource development in its inaugural budget points to its deceptive duplicity, he said.
Uncertainty will continue to plague Quebec’s mining sector for months to come, said Bachand, citing reports that mining projects have been put on hold pending the new royalties regime.
Conseil du patronat du Québec economist Norma Kozhaya said it is reassuring that the government is seeking input from the mining sector in preparation of its royalties regime.
Marceau said that his government will favour the transformation of raw materials in Quebec.
The tax holiday for major investment projects could apply to mineral processing, he noted. That measure applies to businesses with new projects of $300 million or more that are approved within the next three years. The investment has to be spent within 48 months.
The PQ government will maintain the option of negotiating an equity stake in a mining project, an initiative introduced in the last Liberal budget.
Projects that fall under the huge Plan Nord venture launched as a 25-year legacy venture by the Charest administration will be subject to the infrastructure review, Marceau said. Spending on projects that are already under way will be kept to a minimum, he said.
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