Canada Extends Mineral Exploration Tax Credit for Two More Years

On March 3, 2025, the Canadian government announced the extension of the 15% Mineral Exploration Tax Credit for an additional two years, now lasting until March 31, 2027. The tax credit, which was originally set to expire in March 2025, aims to encourage investment in Canada’s mineral exploration sector, which plays a crucial role in unlocking the country’s vast mineral resources. This extension will provide approximately $110 million to support junior exploration companies, fueling job creation and economic growth.

According to the Department of Finance Canada, the tax credit helps raise capital for early-stage exploration by offering investors an additional incentive to finance these projects through flow-through shares. The flow-through shares allow companies to pass on certain tax deductions to investors, making it an attractive investment tool for those looking to support “grassroots” exploration. In 2022, the credit supported around 200 companies and helped over 10,100 investors contribute to raising equity for exploration projects.

Canada’s mineral resources—especially critical minerals—are integral to the global economy, playing a vital role in industries such as clean technology, electric vehicles, and semiconductor manufacturing. In light of the increasing global demand for these minerals, the Canadian government is committed to ensuring responsible and sustainable resource management. The extension of the Mineral Exploration Tax Credit aligns with Canada’s broader efforts to position itself as a leading supplier of these critical materials.

Dominic LeBlanc, Minister of Finance and Intergovernmental Affairs, emphasized that the extension is a recognition of Canada’s enormous mineral potential. “The proposed extension of the Mineral Exploration Tax Credit is a testament to our belief in Canada’s vast mineral potential. By supporting the talent and innovation of our resource sector, we are driving economic growth, creating jobs, supporting communities and positioning Canada as a global leader and reliable supplier of critical minerals to the world,” LeBlanc stated.

Minister Jonathan Wilkinson, who is responsible for Energy and Natural Resources, also highlighted that the extension reinforces Canada’s commitment to sustainable resource management. “Canada has long been a mining nation, with the responsible and sustainable management of our mineral resources driving job creation and economic growth for generations. Today’s announcement extending the Mineral Exploration Tax Credit reaffirms Canada’s commitment to strengthening this vital sector. The Mineral Exploration Tax Credit provides support to junior exploration companies as they develop the mines of the future and lay the groundwork to supply the world with the minerals it is looking for,” Wilkinson said.

In addition to the 15% Mineral Exploration Tax Credit, Canada introduced the 30% Critical Mineral Exploration Tax Credit in 2022, targeting exploration expenses related to minerals used in battery production, clean technology, and semiconductor manufacturing. However, it is important to note that these two tax credits cannot be claimed together.

This strategic move by the Canadian government is part of its ongoing efforts to enhance the country’s mining sector, attract global investments, and foster sustainable development of its natural resources.