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. 30.
The amendments, 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.