Mining industry representatives defended the controversial harmonized sales tax during a staged event in Prince George Wednesday, arguing that a more globally competitive mining sector is good for all British Columbians.
That's because saving from the provincial sales tax rebates that mining companies are eligible for under the HST will save companies anywhere from $500,000 to $1.5 million per mine, depending on size. The savings will be ten-fold on new mining projects, said B.C. Mining Association president Pierre Gratton.
The event, a news conference for reporters at Ritchie Bros., was held under the umbrella of the Smart Tax Alliance, a coalition of 31 B.C. businesses and industry groups formed to support the HST.
Thompson Creek Metals Co. Inc. and Imperial Metals Corp., both of which operate metal mines in northern B.C., said the HST will benefit their operations. Savings will be plowed back into operations to make them more efficient and productive. The companies said not only will the introduction of the HST protect jobs, but help create new ones, although both firms agreed that the HST savings alone would not make or break new projects.
Thompson Creek Metals operates the Endako molybdenum mine west of Prince George and recently purchased Terrane Metals, which has started preliminary construction on the $900-million Mount Milligan gold and copper mine northwest of Prince George.
HST annual savings at the Endako mine will be $800,000, while another $8 million will be saved as part of a $498-million upgrade and expansion at Endako. The savings on the Mount Milligan projects are estimated at $14 million.
"More investment also means more work for local mining suppliers," said Bill Mracek, Thompson Creek Metals vice-president and general manager of Endako.
The expansion at the Endako mine is creating business for 115 suppliers, half of which are from the local area stretching from Burns Lake to Prince George.
The savings to Imperial Metals on its Huckleberry Mine, south of Houston, is a$400,000 annually.
Imperial Metals is also examining how long to extend the life of the Huckleberry gold and copper mine. Although not the only issue, the HST will be a factor, noted Imperial Metals spokesman Byng Giraud.
He also noted that the company is spending $30 million on exploration, including on the Red Chris project in northeastern B.C. The HST helps the company put more money into exploration, employing people and support services like hotel, grocery stores and pubs. "If that's not good for the consumer, I don't know what it is," said Giraud.
