The Mining Association of British Columbia

The Mining Association of British Columbia

February 19, 2008 18:17 ET

The Mining Association of British Columbia: Mining Industry Supports BC Budget

Expresses Concern on Some Issues

VICTORIA, BRITISH COLUMBIA--(Marketwire - Feb. 19, 2008) - The Mining Association of British Columbia (MABC) supported many measures in BC Budget 2008 but expressed caution on some issues that could impact the mining sector.

"The 2008 Budget and its climate action provisions offer the mining industry some clear opportunities to work with government to reduce greenhouse gases (GHGs) and ensure the long-term success of the industry," said Byng Giraud, Vice President of Policy and Communications.

"While any new tax is challenging, we welcome the government's clear commitment to revenue neutrality in the implementation of the carbon tax. We also applaud the government's gradual approach to implementation," added Giraud.

Further positives in the 2008 budget included:

- An immediate reduction in general corporate tax and the commitment to reducing that tax to 10% by 2011.

- The announcement of an additional $7 million to assist with environmental assessment and permitting in British Columbia.

- The provision of $10 million to assist First Nations with natural resource decisions.

- School tax rate reductions for major industrial property.

- $12 million for Geoscience BC.

- Government's willingness to delay consideration of applying the carbon tax to industrial processes and fugitive emissions until more consultation occurs.

On the other hand, the MABC expressed a number of concerns with Budget 2008. "Corporate income tax reductions will make up approximately 23 percent of the overall climate plan tax reductions, yet industry will pay approximately 60-70 percent of the new carbon taxes. From the point of view of industry, more work needs to be done to ensure true revenue neutrality for all sectors," commented Giraud.

The MABC estimates that the industry (including smelters and operating mines) in BC produces 3.3 million tonnes of GHG emissions. Therefore, the mining sector will pay approximately $33 million in carbon taxes in 2008/09 increasing to $99 million by 2012. These costs combined with expected higher electricity costs and possible additional costs imposed by a cap-and-trade system add considerable uncertainty to the sector.

"Any cap-and-trade system must allow for the creation of new mines and smelters," added Gavin Dirom, MABC Vice President of Environment, Health & Safety. "Poorly designed hard caps could effectively prevent industry growth, so we welcome the government's willingness to work with industry in the design of the cap-and-trade system. The commitment to integrating measures to avoid double taxation reflects this government's ongoing support of the sector."

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