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Quebec Proposes Tax Hike for Mining Corporations - by Hugues Lachance 

Canadian Tax Adviser


October 02, 2012


Hugues Lachance
Montreal, Canadian Corporate Tax


The newly elected minority Parti Québécois (PQ) Quebec government's campaign platform proposes a revised mining royalty regime that is based on both production and profits that could significantly increase Quebec's mining taxes. The current mining tax regime is based on net profits. The PQ forecasts that it will collect an additional $388 million annually from the new regime.

Mining royalties to increase
Currently, Quebec charges mining royalties based on 16% of net profits, as of January 2012. Net profits are generally calculated as profits generated from the wellhead less a processing allowance.


Under its proposed changes, the Quebec PQ government intends to create a hybrid mining royalty regime based on both production values and profits. Under the proposed hybrid structure, a minimum 5% royalty would be charged on production values, and a 30% tax would be charged on profits in excess of a "normal" threshold of 8%. Details of how this 8% threshold will be calculated are not yet known.


The Quebec PQ government has not specified when this hybrid regime will take effect.


For more information, contact your KPMG adviser.




Information is current to October 2, 2012. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG’s National Tax Centre at 416.777.8500.


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