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The mining industry is calling a plan by the B.C. government to impose more fees on the industry “punitive.”

JOHN LEHMANN/The Globe and Mail

The B.C. government is planning to impose new fees on the mining industry, saying the sector should bear the cost for better services.

"It will give the ministry an opportunity to bring a few more resources in to improve our performance," Mines Minister Bill Bennett told the legislature Thursday.

But the industry is calling the move "punitive" and warns it will undermine already-fragile small-scale mining companies.

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Just two years ago, the B.C. Liberal government restored ministry resources for services such as permit approvals, at Mr. Bennett's urging. He had argued that government service cuts had "starved" the "dirt ministries" – those governing mining, forests and oil and gas – to the point that economic growth was being choked.

Now, the province wants mining to pay for those restored services.

But the opposition NDP said Thursday the changes are ill-timed.

"This new tax will be felt more profoundly by the smaller exploration companies, placer miners and prospectors – the backbone of the industry," said mining critic Scott Fraser. "How much are mining companies going to be hammered by this new stealth tax?"

Mr. Bennett would not say how much the new fees are expected to bring in to government coffers, but ministry officials later said it is expected to bring in about $5.5-million a year, if the fees remain at the levels that are currently proposed.

The fees, expected to be in place by the fall, would range from a few thousand dollars to process a notice of work application for small-scale exploration, up to $300,000 for a permit for large new mines or expansions.

The NDP raised the fee proposal on Thursday, just minutes after Mr. Bennett blasted the federal government for rejecting the New Prosperity copper-gold mine proposal. Mr. Bennett told reporters he is no longer sure he can meet his job creation targets for mining because of Ottawa's decision.

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However Jack Denny, president of the Chamber of Mines for eastern B.C., said the proposed fees will hurt job creation by making smaller projects, which are already suffering from a lack of capital, too expensive to explore. "I find it difficult to believe that there are many outside of government who think the proposed fees are anything but a cash grab," Mr. Denny wrote in a statement.

He added that 2013 was a tough year for most of the companies and individuals who would be paying the new fees. "While there are some big development projects ongoing, the exploration boom is over. If the ministry permitting staff cannot keep up now … the solution should be to simplify the process rather than punitive application of fees."

In a discussion paper released to industry last month, the province said the fees are needed to pay for improved permit services. The paper describes the restoration of government funding to the permits office in 2011 as a temporary measure. "It is clear that in order to meet industry demands, this level of service and efficiency must continue. However, current fiscal constraints make fees the only option available to put long-term, stable funding in place."

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