NEW YORK The
Mining Association of Canada (MAC) is supporting proposed
amendments to legislation that targets tax avoidance by
foreign-controlled Canadian companies, the group said Aug.
released Aug. 16 by Canadas Department of Finance, affect
2012 Foreign Affiliate Dumping (FAD) rules designed to prevent
tax avoidance by foreign-based corporations, restricting their
ability to transfer foreign affiliates into their Canadian
subsidiaries for tax purposes.
MAC was concerned that
the rules were negatively affecting Canadian mining companies,
particularly those in the junior mining sector. The amendments
seek to alleviate such concerns by "reducing impediments to
corporate acquisitions and project funding" for Canadian
corporations and easing compliance requirements.
"We fully accept that
it is important to ensure that cross-border investment is not
used as a tool to erode the corporate tax base," MAC president
and chief executive officer Pierre Gratton said. "However, it
is important that Canadas income tax laws continue to be
structured to support cross-border investment, the efficient
operation of global mining equity capital markets centered in
Canada and, in particular, the global junior mining sector that
has made Canada its home."
The Prospectors and
Developers Association of Canada also has supported the
amendments. Executive director Ross Gallinger said that the
organization would "continue to monitor the effects of the FAD
rules" on mining companies.
The MAC cited the mining industrys importance to the
Canadian economy, noting that 39 percent of global mining
equity capital and more than 70 percent of all global mining
equity financing transactions were handled by the Toronto Stock
Exchange between 2008 and 2012.