Budget 2023-2024: the Horne Foundry could obtain up to $125 million in tax credits
The Horne Foundry, owned by the multinational Glencore, is a huge industrial complex.
AERIS, the Horne Foundry's flagship project aimed at reducing its emissions of pollutants into the air in Rouyn-Noranda, could benefit from a tax holiday of up to 25% of the company's investments, in under the new program on industrial projects presented Tuesday during the tabling of the provincial budget 2023-2024.
The government has announced that companies that carry out major industrial projects outside major centers will be able to receive a tax holiday of 15 to 25% of investments. The AERIS project, which is expected to cost nearly $500 million, meets these criteria.
This project includes the complete reengineering of the copper transformation processes (PHÉNIX), the addition a very high capacity air cleaning system, the construction of a new energy efficient casting wheel and the creation of the buffer zone between the residents and the Horne Foundry.
In the budget presented by the Minister of Finance, Eric Girard, we can read there that a company which, after the day of the budget speech, carries out a major investment project in Quebec will be able to benefit, under certain conditions, from an income tax holiday and a holiday from employer contributions to the Health Services Fund (HSF) with respect to the portion of salaries paid to its employees attributable to the time they devote to these activities.
The project must be over $100 million, which is the case with the AERIS project. The new tax holiday is for 10 years and will allow a company to obtain between 15 and 25% in tax credits.
This rate will be determined according to the territory's economic vitality index. It was impossible to know the index granted to the City of Rouyn-Noranda for the moment.
The Horne Foundry could obtain a tax credit varying between 75 and 125 million dollars, depending on this index.
Quebec already announced last week a participation of 88.3 millions of dollars to relocate residents of the Notre-Dame district and in various cohabitation measures.
The superintendent of communications and community relations at the Horne Foundry, Cindy Caouette, was unable to confirm whether the company intended to submit an application for the tax credit.
The provincial budget presented on Tuesday stipulates that a company must not have made significant expenditures in the project before filing its application.
Significant expenditures for the realization of the investment project have been incurred if the total amount of capital expenditures incurred with respect to the investment project exceeds $1 million at the time of the presentation of the application for the initial certificate, specifies says the document from the Department of Finance.
Even if the Horne Smelter has already invested more than a million dollars to reduce its emissions, this money was mainly spent in the VELOX project, a pilot project which is not included in the AERIS project. The company will therefore have to demonstrate that less than a million dollars has been invested in the project for the moment in order to benefit from the tax credit.
Several sectors are excluded from this tax credit, including gold mines, but a copper smelter is eligible, as are mining companies in the region that will extract critical and strategic minerals.
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