The mining industry paid out about $9 billion in aggregate mining taxes and royalties, corporate income taxes and personal income taxes to the provincial and federal governments last year, said the Mining Association of Canada (MAC) in its annual report released Sept. 10.

Royalty/mining tax payments increased by about $700 million over last year, with most of the increase coming from Alberta, Saskatchewan, Newfoundland and Labrador, and Ontario, the report, prepared by ENTRANS Policy Research Group, stated.

Of particular note is the study's findings that show a steady increase in overall mining tax and royalty payments since the 2009/10 figures seen during the international recession where payments to governments declined almost 60 per cent compared to 2008/09.

In 2010/11, royalties and mining taxes began to recover, increasing by 45 per cent from $2.2 billion to $3.2 billion. They increased by a further 20 per cent in 2011/12 to $3.8 billion, which is well above the 10-year average, stated the news release.

Regionally, Alberta and Saskatchewan accounted for the largest portion of royalties and mining taxes at 64 per cent last year stemming from the provinces' respective strength in bitumen and coal, and potash and uranium.

Newfoundland and Labrador saw royalty and mining tax revenues rise by almost 70 per cent on the strength of higher iron ore and nickel prices, and increased volumes from the Voisey's Bay operation.

Ontario's annual revenues more than doubled — from $72 million to $180 million — likely attributed to higher gold and copper prices.

“The increase in payments made to federal and provincial governments last year is directly related to the mining industry's economic strength during this period," said Pierre Gratton, MAC's president and CEO. “Despite fiscal policy changes, notably the reduction in the federal corporate tax rate in 2011, payment levels were buoyed by generally higher metal prices and increased production.”

In fact, according to Natural Resources Canada, the mineral sector experienced a 21-per-cent increase in the value of Canadian mineral production in 2011 to a record $50 billion stemming from a combination of higher prices and expanding output.

“The strength of the study is that it measures one of the significant economic contributions of the Canadian mining industry both nationally and regionally,” said Gratton. “Canadians from coast to coast benefit from a strong, competitive mining industry that supports critical government services such as health care, education and skills training, as well as creates hundreds of thousands of well-paying jobs.”