9Canadas Tax Rates
FederalCorporate income tax 15%
Provincial/TerritorialCorporate income taxesMining taxes
(generally profit-based)
Rates vary from 10% to 16%Rates vary from 10% to 18%
MunicipalProperty tax Varied
Since 2003, Canadas federal corporate income tax rate has
dropped from 29.12% (includes the 1.12% corporate surtax eliminated
on January 1, 2008) to 15% in 2015.
Canadas internationally competitive tax regime features
incentives such as the Canadian Exploration Expense (100%
deduction), Canadian Development Expense (30% deduction), and a
3-year loss carry-back and 20-year loss carry-forward provision. In
addition to the existence of a number of provincial/territorial tax
and non-tax incentives for mineral exploration, royalties or mining
taxes, for the most part, are profit-based rather than based on
tonnage or revenue.
A unique feature of Canadas tax regimes is flow-through shares
(FTS). Flow-through shares enable a company to transfer eligible
exploration and development expenses to investors. These expenses
or deductions can be used by investors to reduce their taxable
income from Canadian sources. Because the shares carry a tax
deduction, they are sold at a premium compared to regular shares,
enabling a junior company to raise relatively more funds to
continue its exploration activities.
In 2000, the federal government introduced the Mineral
Exploration Tax Credit (METC), a 15% income tax credit related to
surface or above-surface exploration. The METC works in conjunction
with Canadas FTS mechanism and offers investors a 15% tax credit
(reduction of taxes payable) in addition to a 100% write-off of
exploration expenses.
Canada has excellent mineral potential, a stable and favourable
investment climate for
mineral capital, and is open for business.
Source: Natural Resources CanadaAdditional information is
available on the Internet at: www.nrcan.gc.ca/mining-materials
