Marginal Effective Tax Rates for Capital in the Canadian Mining Industry

Robin Boadway, Neil Bruce, Kenneth McKenzie and Jack Mintz

Canadian Journal of Economics, 1987, vol. 20, issue 1, 1-16

Abstract: The authors model a firm that explores, develops, and extracts a depletable asset, taking into account various features of Canadian corporate and Ontario and Quebec mining tax law. They derive the user cost of capital and effective tax rate for investments undertaken by a mining firm. Calculations based on 1985 tax law show that there is considerable dispersion in effective tax rates, most being negative, especially for processing assets. The authors conclude that these taxes have been very poor collectors of mining rents compared to a neutral cash flow tax. Coauthors are Neil Bruce, Ken McKenzie, and Jack Mintz.

Date: 1987
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