Nova Scotia mining industry shafted in Liberal budget

Nova Scotia Premier Stephen McNeil says his government cannot afford to deliver a fuel tax break to the mining and quarry industry, even though the Liberals promised to phase in the rebate starting in 2015.

Industry claims promise of $2.6M fuel tax break was broken

Sean Kirby, the executive director of the Mining Association of Nova Scotia, says the industry should qualify for the rebate on the fuel used off public highways. (CBC)

Nova Scotia Premier Stephen McNeil says his government cannot afford to deliver a fuel tax break to the mining and quarry industry, even though the Liberals promised to phase in the rebate starting in 2015.

"It was our expectation and understanding that we would start getting the fuel tax rebate in the recent budget. Unfortunately the budget did not deliver on that," said Sean Kirby, the executive director of the Mining Association of Nova Scotia.

The mining industry has argued that like farming, fishing and forestry, it should qualify for the rebate on the fuel used off public highways.

"That amounts to about $2.6 million a year in fuel taxes which we just shouldn't be paying for the simple reason that we don't use that fuel on highways," said Kirby.

"We use it on huge mining quarry vehicles that operate off-road."

McNeil agrees, but said his government cannot afford to lose the revenue right now.

"We don't have the money to be able to do that," the premier said Monday.

'Why did the minister renege'

In 2014, the Liberals twice committed to bringing in the rebate during their mandate starting this year. In November, Natural Resources Minister Zach Churchill issued a news release with the promise.

"Mr. Churchill said the government will start phasing in a fuel-tax rebate program for mining and quarrying vehicles, and introduce a revised Mineral Resources Act in 2015," the release said.

"Why did the minister renege on a promise?" Pat Dunn, a Progressive Conservative MLA, asked last week in the legislature.

Churchill replied: "The indication that we've given to the mining association was that this credit will be looked at and distributed in the course of our mandate and our mandate is not yet over."

McNeil also claimed the Liberals have promised only to deliver the 15 cent per litre rebate during their mandate.

Progressive Conservative Leader Jamie Baillie used the issue to attack the Liberals on Monday.

'Make good on it next year'

"It's another broken Liberal promise on jobs," he said.

"Last week, they broke a promise to the film industry that may costs 2600 jobs. This week, they've broken a promise to the mining industry where hundreds of other jobs are now also at risk."

The Mining Association of Nova Scotia was less strident, calling on the Liberals to "make good on it next year."

A spokesperson for the National Gypsum Company — which operates a large gypsum mine in Milford — also urged the government to act.

"A fuel tax rebate would help us lower our overall cost per ton to produce gypsum rock. That's important because the gypsum market is very competitive,'' Nancy Spurlock, a spokesperson for the company, said in an emailed statement to CBC News.

"Two of the four gypsum mines in the province shut down in 2011, and cost was a factor in their closings. We need to ensure our costs remain competitive," she said.

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