Bill C-31 — Mining Credits Extended to 2028, Nunavut Licence Powers, and What Nations Need to Know Now

Canada's second budget implementation bill — C-31 — was tabled in the House of Commons yesterday. The bill is 337 pages of tax and legal changes, most of it technical. But buried in those pages are several provisions that have direct and immediate implications for Indigenous Nations in mineral-rich and northern territories. The consultation clock on some of these may already be running.

What's in Bill C-31 That Matters for Nations

The bill is broad — covering tax credits, carbon capture rules, a new Defence Investment Agency, air travel complaints, and more. Four provisions stand out for Indigenous Nations.

1. Mining Exploration Tax Credits Extended to 2028

The flow-through mining expenditure window — which allows mining companies to pass eligible exploration expense deductions to investors — has been extended from its previous 2026 deadline through to 2028. Eligible expenses incurred from March 2025 through to the end of 2027 now qualify.

This matters for Nations because investor tax incentives drive exploration activity. When exploration financing becomes more attractive, more exploration happens — and more exploration on or near Indigenous territories means more duty-to-consult obligations for the Crown. Nations that have been monitoring junior mining activity near their territories should expect increased pressure over the next two years.

2. "Inherent Natural Qualities" of Mineral Resources Now Deductible

The bill expands the definition of what counts as a deductible Canadian exploration expense. Determining the "inherent natural qualities" of a mineral resource — essentially, early-stage geological assessments of what's actually in the ground — is now explicitly included as a valid exploration expense.

This is a subtle but significant change. It makes the earliest stages of resource assessment more financially attractive for exploration companies. Nations whose territories sit over mineral deposits that have not yet been fully characterized should be aware that this change makes those early-stage assessments more likely to happen — sooner rather than later.

3. Cabinet Power to Cancel Nunavut Mining Licences

This is the provision that deserves the most attention from northern Nations. Bill C-31 gives Cabinet the authority to cancel a mining licence in Nunavut if it deems doing so to be "in the national interest."

This is a double-edged provision. On one hand, it creates a mechanism that could be used to protect Indigenous interests — if a licence is proceeding in a way that overrides Inuit rights or treaty obligations, the "national interest" framing could theoretically support cancellation. On the other hand, the same power could be used to cancel licences that Nations support, or to override community objections to a project Ottawa wants to proceed.

The provision gives Cabinet significant discretion with limited definition of what "national interest" means in this context. That ambiguity is worth watching carefully. Nations with mining licences active in Nunavut — whether as proponents or affected parties — should understand that this power now exists and is available to be exercised.

4. Carbon Capture Expansion — Enhanced Oil Recovery Added

The spring economic update added "enhanced oil recovery" as an eligible end use for captured carbon. Bill C-31 formalizes this and makes several technical updates to dual-use equipment provisions. There is also a clause that deems carbon "stored in dedicated geological storage" that is later released for "bona fide reasons outside the control of the taxpayer" as still qualifying for the tax credit.

The bill does not define what "bona fide reasons" means — a gap that is worth monitoring. For Nations in regions where carbon capture projects are active or proposed, understanding how these definitions evolve will be important for assessing project impacts and consultation rights.

What Else Is in C-31 Worth Noting

The bill also legally establishes the new Defence Investment Agency — relevant for northern Nations in defence corridor territories — and includes changes to the Pest Control Products Act from the spring economic update. A global minimum tax alignment provision closes loopholes that allowed some multinationals to reduce their Canadian tax exposure below 15%. Air travel complaint handling is also reformed.