Regulatory Submissions

As part of its strategy to pursue the low carbon economy and achieve national net-zero goals for Canada, in Budget 2023 the Federal Government announced various tax incentives related to a range of emission reduction technologies.

One incentive that is relevant to the mineral sector is the Clean Technology Manufacturing Investment Tax Credit (CTM-ITC), which will provide a refundable 30% tax credit for capital investment in various eligible activities to extract and process six critical minerals that are essential for these clean technologies – copper, nickel, lithium, cobalt, graphite and rare earth elements.

On December 20, 2023, Finance Canada published the draft legislation for the CTM-ITC, on which PDAC responded with a commentary letter to convey some concerns regarding the proposed legislation and to improve the effectiveness of this incentive.

On June 13, 2023, Bill S-5, Strengthening Environmental Protection for a Healthier Canada Act, received royal assent. The Bill outlined amendments to the Canadian Environmental Protection Act which was enacted in 1999. The goal is to contribute to sustainable development through pollution prevention and to protect the environment, human life and health from the risks associated with toxic substances.

The Government is developing an implementation framework “the Framework” to set out how the right to a healthy environment will be considered in administering the Canadian Environmental Protection Act. These elements include the scope and limits of the right, related principles as well as procedural duties.

PDAC addressed a written submission to the Minister of Environment and Climate Change and the Minister of Health to provide perspective on the definition of healthy environments in Canada with a particular focus on the context of early-stage mineral exploration and development projects.

As part of NRCan’s commitment to triennial updates to Canada’s Critical Minerals List, a consultation was initiated regarding the criteria used to develop and update the List. The proposed changes to the criteria, intended to clarify the original assessment of minerals for criticality, would require that a mineral be:

• Essential to Canada’s economic or national security; or
• Required for our national transition to a sustainable low-carbon and digital economy; or
• A sustainable and strategic source of critical minerals for our international allies.

While meeting both of the following mandatory criteria:

• Mineral supply is threatened; and
• Has a reasonable likelihood of being produced in Canada.

In addition to the presented submission, PDAC participated in virtual consultation engagements with NRCan. It should be noted that the consultation’s scope was limited to the Critical Minerals List criteria; commentary on the inclusion of specific minerals on the List or as part of funding programs or tax incentives has therefore not been provided.

In December 2022, the Ministry of Transportation introduced amendments to the Canadian Aviation Regulations (CARs) aimed at restricting commercial pilot flight time. While well intentioned, the amendments lack clarity and may significantly affect mineral exploration by reclassifying much of the industry’s aerial work as “air taxi” operations. This change has major financial and logistical consequences for explorers, as an operation may now need two pilots where one was previously sufficient. More importantly, they pose a notable safety risk, as the reduction in flight hours could limit pilot capacity to participate in evacuations or other emergencies. 

Canadian Aviation Regulations Advisory Council (CARAC) Notice of Amendment NPA-2023-006 indicates that the amendments pose safety risks in the face of an unprecedented wildfire season. As a result, the Ministry of Transportation issued further amendments to the aerial work regulations to clarify the impacts of the changes on forest firefighting operations and launched a one-month consultation period in May 2023.

As the risks to pilots and firefighters arising from the amendments are similar to those foreseen to arise in exploration operations, PDAC’s submission aims to elucidate this relationship and provide key recommendations.