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Taxation

Nova Scotia generally has the highest mining tax/royalty regime in the country. This discourages investment and makes it harder for the industry to create jobs for Nova Scotians.
To illustrate, PWC’s 2011 Canadian Mining Taxation report (http://www.pwc.com/ca/canminingtax) shows that Nova Scotia’s mining industry has the highest provincial tax burden in the country (Exhibit 1, page 3). The chart shows that Nova Scotia mining companies pay a combined provincial income, capital and mining tax rate of 28.6%.  This is 2% higher than the next highest jurisdiction, Newfoundland and Labrador, and 15.1% higher than the best rate in the country, Ontario’s 13.5%.
Exhibit 7 (page 17) shows that Nova Scotia’s corporate income tax rate applicable to mining is 16%, tied for highest in the country with PEI.  The same chart shows that the general tax and mining tax combined rate is 34%, which is again the highest in the country, tied only with PEI, which does not have a mining industry of any significance.
Our uncompetitive tax/royalty rates, combined with other government policies, have had a significant harmful effect on the industry. According to Natural Resources Canada data (available at http://www.mining.ca/site/index.php/en/mining-in-canada/facts-figures.html, page 21):
  • From 2001-2011, Nova Scotia's mining industry shrank while the mining industry of every other province and territory grew dramatically. (excluding PEI because, again, PEI basically does not have a mining industry).
  • Nova Scotia's industry shrank over that ten year period from a value of $285 million to $247 million. That is a 14% decrease in output, which resulted in our national ranking dropping to last in the country (again, excluding PEI).

By comparison:

  • Newfoundland's mining industry grew 6 times larger over the ten year period.
  • New Brunswick's mining industry grew 1.6 times larger.
  • Quebec's mining industry grew 2.1 times larger.
In fact, every other jurisdiction grew dramatically while Nova Scotia shrank.
The first step to correct this situation, and to help the industry grow and create jobs, is to extend to mining/quarrying the fuel tax rebate that the provincial government gives other resource industries.
The Government should also consider giving Nova Scotia’s industry the sorts of incentives that other provinces give their mining industries, such as: 
  • Royalty holidays for new mines and allowing companies to recover full capital costs before paying taxes; and
  • A provincial flow-through share tax credit.