Raise the Hammer

It's not just me: the WTO counts tax breaks as subsidies.

Not all business expenses are deductible: tax policy is full of all sorts of fine grained decisions about what is allowed and what isn't.

According to Natural Resources Canada, here is a list of "mining-specific" tax breaks:

Corporate Income Tax Provisions:

Deduction of Provincial/Territorial Mining Taxes and Royalties

Capital Cost Allowances (CCA)

Accelerated Capital Cost Allowance (ACCA)

Investment Tax Credit for Qualified Property Acquired for Use in the Atlantic Provinces and the Gaspé Peninsula (AITC)

Canadian Exploration Expenses (CEE)

Investment Tax Credit (ITC) for Pre-Production Mining Expenditures

Foreign Resource Expense (FRE) and Foreign Exploration and Development Expense (FEDE)

Canadian Development Expenses (CDE)

Canadian Oil and Gas Property Expense (COGPE)

Mine Reclamation Funds

Resource Allowance

Mining Depletion

http://www.nrcan.gc.ca/mining-materials/...

Why is there all these special tax breaks just for the mining industry? Why don't they simply use the usual deductions available to all businesses? These industry specific tax breaks are designed to encourage and promote the mining industry. Why should we be subsidizing the fossil fuel industry through specific tax breaks?

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/s...

The subsidies are clear when we are considering tax breaks specifically for the mining industry.

The government could decide to disallow certain tax breaks for the fossil fuel industry, or claw them back by adding additional carbon taxes (which would work out to the same thing). The tax regulations are constantly fine tuned to encourage or discourage certain behaviours. The argument is that the tax code should not be encouraging production of something we are trying to discourage and that is harmful. Does the tobacco industry still have special tax breaks?

Comment edited by kevlahan on 2016-02-16 10:03:27