Yukon royalty rates must improve

Yukon royalty rates must improve The Yukon Chamber of Mines has come out swinging against increasing mining royalties. It has stated the Yukon mining industry faces the highest combined corporate income tax and royalty rate in Canada, according to an inf

The Yukon Chamber of Mines has come out swinging against increasing mining royalties.

It has stated the Yukon mining industry faces the highest combined corporate income tax and royalty rate in Canada, according to an information bulletin released by Natural Resources Canada in June (http://www.nrcan.gc.ca/mms-smm/busi-indu/infoblt-eng.htm).

If one actually reads the Natural Resources Canada bulletin one finds it is only applicable to base-metal mines, such as those producing copper, nickel, lead, zinc and iron. They are not talking about silver and gold.

In addition, all the calculations were done on tax parameters based on rules and rates that, in January 2010, were known to be effective as of January 1, 2012.

Unfortunately for the accuracy of the calculations the Yukon’s Quartz Mining Royalty Regime was changed as of May, 2010 (http://www.gov.yk.ca/legislation/regs/oic2010_091.pdf). The question that must be asked is which Yukon royalty regime was used for the calculations, the old or the new one?

Placer miners continue to pay only 37.5 cents royalty per ounce of gold which is worth over $1,700 an ounce.

Yukoners are giving away this resource without receiving anything in return. No one knows what the royalty from any hardrock mine will be because the mine operators can deduct so many capital and ongoing costs from any profits prior to calculating the royalties.

The one exception is the Minto copper mine, which has a royalty regime based on net smelter return. This unique arrangement is due to the fact the mine is on First Nation Class A settlement land.

All the other existing and proposed hardrock mines are not, and will use the vague Yukon government system to calculate royalties.

The Yukon is giving away irreplaceable nonrenewable resources and getting virtually nothing in return.

To use outdated and inappropriate information to suggest otherwise does a disservice both to the mining community and to the owners of Yukon minerals, the Yukon people.

Lewis Rifkind, mining coordinator

Yukon Conservation Society

Whitehorse