N.W.T. MLA says report on mining taxes and royalties is flawed

A N.W.T. MLA says a recent review of the fiscal regime of mining in the territory is flawed and should not serve as the foundation for an overallreview of mining regulations.

Kevin O'Reilly, MLA for Frame Lake, says in a statement released Wednesday that the $300,000 review conducted by PricewaterhouseCoopers is theoretical and fails to take into account too many factors.

The review, which was released by the government Tuesday, examined the tax and royalty competitiveness of the N.W.T. mining sector by looking at how an imaginary base metal mine and an imaginary diamond mine would be taxed in different jurisdictions.

The review concluded the territory is competitive but that the best thing the government could do to attract more investment and exploration is to help mining companies lower their costs by developing more infrastructure projects rather than lowering taxes, which it said are already low compared to other jurisdictions.

O'Reilly said the study didn't provide an analysis of "real and actual revenues from mining to our government," and that without that information, it's not possible to determine whether the fiscal regime achieves "a fair balance between competitiveness and fair return."

He said the study didn't consider "a new fiscal relationship with the federal government where [the government of the N.W.T.] gets to keep more of its resource revenues."

O'Reilly added that MLAs were not consulted on the design of the study "or the overall process of reviewing public revenues from mining."

He added the study did not consider many other issues related to competitiveness including political stability and regulatory certainty.

O'Reilly also noted the study did not take into account that the N.W.T. keeps only half of the royalties mining generates.

The study is part of the government's development of new mining regulations.