The federal budget re-introduced the Investment Tax Credit for Exploration (ITCE) from May 2, 2006, to March 31, 2007.
This is a subsidy to investors that is ultimately being paid for with the suffering of indigenous peoples.
The program, known familiarly as 'super' flow-through, allows investors a 15% credit on their flow-through share investments in grassroots exploration. As the federal budget points out, the one-year 'look-back' rule will allow funds raised with the benefit of the credit in 2007, for example, to be spent on eligible exploration activity up to the end of 2008.
The cost of this subsidy to government is estimated at $90 million, but there has never been an evaluation of the ecological, social and cultural costs of the program to the public.
It is important to note that most provinces also have Flow Through Shares and tax incentives for mines in remote areas which are in addition to the federal program.
The Investment Tax Credit has enriched speculative investors by reducing the after-tax cost of a $1000 investment in exploration in Canada to as little as $207 in Quebec, and $333 in BC.
Most of the exploration is in Canada's northern and rural regions, where there are growing conflicts with First Nations and Aboriginal peoples, who want consultation with governments and to undertake land-use planning before any of their traditional territories are allocated to mining.
There has never been an evaluation of the ecological, cultural and social costs of this exploration by the federal government.
Last week, Muskrat Dam First Nation discovered that exploration activities by DeBeers, including helicopters and drilling, had ruined their annual community goose hunt. This deprived the community of over 200 geese that they needed to feed their elders.
Fortune Minerals, a junior mining company registered in Ontario has made a number private placements of Super Flow Through Shares to its investors. The company proposes to mine anthracite coal in the "Sacred Headwaters" of the Tahltan people: the headwaters of five major rivers in British Columbia. Elders from the community have been blockading their exploration activities, arguing that the rivers need to be protected and their cultural heritage is at risk. The Tahltans are faced with five major new mining projects on their lands as well as infrastructure to support them all at the same time.
In northern Ontario, seven First Nations have issued a mining moratorium to stop the exploration activities of Superior Diamonds, Platinex and other mining companies on their traditional territories. They say the companies are infringing their rights and damaging their land. Both Platinex and Superior rely on the Flow Through Share Program to sustain investor interest in their activities.
For more information, Joan Kuyek, National Co-ordinator, tel. (613) 569-3439.