Quebec Government Unveils Its Proposed Mining Tax Regime

Background

During the last provincial elections in Quebec, the Parti Québécois, which now forms the provincial government, promised to change the mining royalties regime to ensure that all mining companies pay financial compensation on the mineral resources they extract. To fulfil this electoral promise and following lengthy private and public consultations, the Quebec government unveiled its proposal yesterday.

Current regime

Under the current regime, a mine operator must pay mining royalties amounting to 16% of its annual profit. The regime applies to each mine individually, so that a loss on one mine cannot be used to reduce the profit on another mine. The profit from a mine is determined based on the gross value of the mine's annual production and corresponds to the income received by the company from the sale of the ore extracted from the mine or any other product resulting from the processing of the ore, reduced by expenses and allowances attributable to