The Association for Mineral Exploration wants engineering, feasibility and technical costs included under Canadian Exploration Expenses, the category of deductions companies can transfer to investors through flow-through shares. The push targets the financing gap between discovering a deposit and establishing whether it can support a mine, which the industry calls the valley of death.
EY’s economic assessment estimates the change could help advance three to five additional mines under favorable market and policy conditions, add C$5.2 billion to C$12.2 billion to GDP from exploration, and a further C$12.9 billion to C$21.4 billion over mine construction plus 15 to 20 years of operations, against C$6.6 billion in forgone tax revenue over a decade. The assessment also projects as many as 34,000 full-time jobs over the next decade. The association says Canada currently has 171 advanced critical-mineral projects that could benefit.
The budget hurdle is real. The Liberal Party’s election platform pledged to expand eligible exploration activities, but Budget 2025 proposed explicitly excluding expenses incurred to determine a mineral resource’s economic viability or engineering feasibility from Canadian Exploration Expenses, following a British Columbia Supreme Court decision that had allowed a broader interpretation. The association is now seeking broader eligibility in Budget 2026, building on an earlier appeal to Finance Minister Francois-Philippe Champagne. Separately, the federal government has committed billions to infrastructure, exploration and mine-to-market initiatives as it courts foreign partners for battery, semiconductor and defense minerals.