Quebec mining companies henceforth will have to pay more royalties

MONTREAL (Scrap Monster) : The Quebec government has disclosed new royalties to be levied on mining companies operating in the region, amid protests from opposition political parties.

The ruling provincial leftist political party- Parti Québécois (PQ) announced the much awaited mining royalty which will fetch millions of dollars to the provincial economy. Hike in mining royalties was one of the main issues raised by PQ during the 2012 election campaigning. PQ had alleged the then ruling Liberals for cheaper mining taxes.

According to the proposed tax system, mining companies will be charged a base tax rate which will be estimated based on the value of the raw ore. This could range between 1 to 4 per cent of the ore value. The second layer of tax will be based on the profits. The mining companies will need to pay profit royalties which is not less than 16% of the profit margin. The rate of profit tax can go higher up to 22.9%.

The provincial government expects that the new royalty system could fetch nearly $1.8 billion as revenue over the next 12 years.

The decision by PQ has invited protests from opposition political parties who allege that it will deter new mining investments in the region and would halt existing mining operations. Quebec Mining Association fears that the new move may tarnish Quebec’s image as a mining friendly province and may paralyze the industry as a whole.