Are We Overtaxing Our Resources?

CIM Bulletin, Vol. 70, No. 785, 1977

Peter M. Watt, F.C.A., Partner, Coopers & Lybrand, Toronto, Ontario

The objectives of this paper are: (a) to examine and discuss the burdens we place on our extractive industry; (b) to compare the levels of taxation in Canada with those in other countries; and (c) to suggest certain broad parameters within which our taxation policies may be made more rational and stable. Among the burdens identified are taxation, the ownership and use of our resources, environmental issues and the rather emotional issue of so-called 'super profits'. Finally, the paper will address certain broad but key areas of policy which need attention and agreement if our tax system is to be made more rational. Such areas include: whether and if so why the extractive industry should be given incentives; what circumstances, if any, justify a 'higher than normal' level of taxation, and, if the concept of economic rents is a justifiable one, how might a basis for them be established which recognizes the fluctuating value of much of the industry's output.
Keywords: Taxation, Resources, Extractive industries, Environmental control, Mining taxation.