Skip to main content

Quebec's Minister of Finance Nicolas Marceau smiles as he shows a mock copy of his budget during a photo-op at his office in Quebec City.

MATHIEU BELANGER/REUTERS

The sword of Damocles still hangs over the head of Quebec's mining sector. But the industry's leaders are taking comfort in the fact that Nicolas Marceau, the province's new Finance Minister, is at least willing to talk about changes to the royalty regime.

Mr. Marceau's first budget, prepared in haste and unveiled Tuesday, maintains the current royalty of 16 per cent on each mine's individual profits. During the election, the Parti Québécois had vowed to replace it with new structure that would impose a 5-per-cent royalty on the value of production, coupled with a 30-per-cent "supertax" on any profits above prescribed rate of return.

While some expected the budget to spell out those changes, Mr. Marceau announced that he will consult the industry first.

Story continues below advertisement

"To open dialogue is a positive first step," said Jean-Marc Lulin, president and chief executive officer of Azimut Exploration Inc. and outgoing president of the Quebec Mineral Exploration Association.

"While mining companies are not jumping up and down, they are relieved. They feel they will at least get a shot at making their case," said Nochane Rousseau, partner and leader for the mining sector at PricewaterhouseCoopers.

But Mr. Marceau remains determined to reform Quebec's regime to collect an estimated $388-million in extra revenue. "We started working on a new framework and this regime will come into force in a matter of months," he said.

Changing Quebec's mining rules so soon after the former Liberal government raised the royalty on profits to 16 per cent, from the previous 12 per cent, upsets investors who are looking for stability before committing to long-term investments, Mr. Rousseau said.

For Mr. Lulin, this is especially true now that the mining boom is loosing steam. "Our competitive advantage in the world lies in our legal, political and fiscal regime," he said. "You can't toy with that without putting investments at risk."

The minority PQ government is forecasting that its royalty revenues will decrease by 21 per cent in the next five years because of falling commodity prices. Quebec now expects to collect more than $1.5-billion between 2012 and 2017 instead of close to $2-billion.

While Yves-Thomas Dorval, president of the business lobby group Conseil du patronat du Québec, said he is pleased that Mr. Marceau heard his organization's plea for consultations. He remains cautious, however. "There is no guarantee that the industry's opinion will be taken into account," he said.

Story continues below advertisement

"We will be heard in a forum that has yet to be determined," said Josée Méthot, president and CEO of the Mining Association of Quebec. "But I won't presume that they will listen to us."

Report an error Editorial code of conduct
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter