Canadian capital, mining taxation and the return of some states

• In Event: Colloquium on socio-economic aspects of resource extraction industries (part 1 of 3)

Abstract

Canadian mining in Latin America has sometimes been portrayed as a new version of classical imperialism (e.g. Veltmeyer, 2011). The rapid expansion of Canadian capital in the region since the 1990s, in 17 out of 19 countries, with close to 100 mines in operations and hundreds of projects more in exploration, portraits Canadian firms as raping the continent in search for metals, extracted in extremely favourable tax contexts. In sum, Canadian corporate capital, Canadian governments and national Latin American authorities seemingly coalesce in a capitalist-state alliance against popular resistance forces (see Harvey, 2010).

To test such generalized arguments, this paper will look at how favourably or not these tax regimes have been evolving for Canadian mining companies in a series of countries in the period in question (1990-2014). Empirical results demonstrate that tax pressure on Canadian mining investors has greatly increased since 1990s until now. Royalties and corporate income tax rates have steadily climbed either through comprehensive revisions of the mining codes (Ecuador, Bolivia), piecemeal negotiated advances (Peru, Chile) or unilateral tax raises (Mexico, Brazil, Argentina). Furthermore, in the cases of stunted reforms like Guatemala, Canadian mining companies themselves have volunteered higher royalty payments to preclude future regulatory changes against their interests. Nonetheless, no significant Canadian mining investor has cancelled its operations in the region, in spite of their multiple protests to “resource nationalism” and a wide movement from Latin American states to obtain a less unfair distribution of gains from the mineral resource boom in the last few years.

Author

• Anisia Paola Ortiz Loaiza, University of Ottawa