Canada Expands Mineral Exploration Incentives Amid Calls for More Support

Canada’s Budget 2026 proposes extending key mineral exploration tax credits to help companies raise early-stage funding. However, industry groups say more support is needed to move discoveries toward mine development.

The budget proposes extending the 15 percent Mineral Exploration Tax Credit (METC) and the 30 percent Critical Mineral Exploration Tax Credit (CMETC) to eligible flow-through share agreements signed on or before March 31, 2032. The federal government estimates the extensions to provide C$956 million in support over five years.

The proposal adds antimony to the list of minerals eligible for the 30 percent CMETC, applying to eligible agreements signed after budget day.

The Prospectors and Developers Association of Canada (PDAC) reported that flow-through shares accounted for more than two-thirds of early-stage exploration financing in the country over the last 10 years.

Under the program, eligible companies can pass certain tax deductions on to investors, allowing them to lower their taxable income. While PDAC supported the decision to extend the measure, it had advocated for a longer-term commitment of either 10 years or indefinitely.

Meanwhile, the Association for Mineral Exploration criticized the budget for leaving the Canadian Exploration Expense (CEE) unchanged, arguing that it should also cover engineering, economic and feasibility studies required to confirm mineral reserves and inform mine development plans.

“We worked diligently to build support across the provinces and territories for expanding the Canadian Exploration Expense. It is the single biggest tax policy measure the government has to move early-stage exploration projects through the valley of death to a promising operating future,” said Todd Stone, president and CEO of Association for Mineral Exploration.

“This budget does not address that gap. Canada’s global and domestic opportunity to unlock mineral sovereignty will have to wait for another day.”

Beyond tax credits, the budget proposes additional funding and tax measures to support Canada’s critical minerals sector and encourage investment in mining projects.

The government plans to provide C$424.4 million over four years, starting in 2027-28, to renew the Canadian Critical Minerals Strategy. This funding would support mining and processing technologies, geoscience, research and priority projects.

An additional C$34 million over four years would go toward renewing the GeoNorth program, which provides geoscience data to support mineral exploration, land-use planning and infrastructure development in northern Canada.

The budget proposes extending key clean energy tax credits to encourage lower-carbon mining operations. Both the Clean Technology and Clean Electricity investment tax credits would be extended to 2040.

The Clean Technology credit would remain available until 2040, with its rate reduced to 15 percent that year rather than ending in 2034. Eligibility for the Clean Electricity credit would also…