$3.8 billion for Canada’s critical minerals

Determined to hold its own in the global race to electrify transport and to stand out in sectors such as aerospace and information technology, the Canadian federal government is injecting $3.8 billion over eight years into its new budget to implement Canada’s first Critical Minerals Strategy.

“Canada has an abundance of valuable critical minerals, but significant investments are needed to make the most of these resources,” the budget document says.

Among other things, the budget envelope for this new strategy includes $1.5 billion in funding for infrastructure investments “that will support the development of critical mineral supply chains.”

Help for mining exploration

Ottawa is also creating a new “critical mineral exploration” tax credit of 30% for mineral exploration expenditures in Canada. This would apply to exploration spending targeting nickel, lithium, cobalt or graphite – minerals essential for the production of batteries for electric vehicles. This measure is expected to cost the Government of Canada $400 million over the next five years.

Currently, the Government of Canada already offers a non-refundable tax credit of 15% on specified mineral exploration expenses incurred in Canada – for all minerals and not just critical ones – which will end on March 31, 2024, unless it is renewed. This new tax credit cannot be added to the existing one.

More details will follow.

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