Tax Incentives for Extraction and Recycling of Basic Materials in Canada

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Tax Incentives for Extraction and Recycling of Basic Materials in Canada. / Scharf, Kimberley.

In: Fiscal Studies, Vol. 20, No. 4, 12.1999, p. 451-477.

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@article{121ac2a34d204244bf798870f9b16970,
title = "Tax Incentives for Extraction and Recycling of Basic Materials in Canada",
abstract = "This paper provides an empirical assessment of the overall incentives generated by taxes with respect to the choice between extraction and recycling of basic materials in Canada. We calculate measures of the overall impact of the Canadian tax system on the incremental cost of (i) producing virgin material or recycled material that is to be used as an intermediate input in the production of a final product and (ii) producing finished products. The sectors that we examine include producers of primary virgin material (forestry, mining, oil and gas), producers of recycled material (scrap dealers) and producers of finished products (metal, paper, plastic and glass). Our results indicate that the Canadian tax system significantly favours the use of virgin materials rather than recycled materials in the case of metal and glass products, but the reverse is true for plastic products. Features in the Canadian tax system contributing to these findings are not limited to corporate income and mining tax incentives at the exploration and extraction stages of the production of virgin materials, but also include provincial sales taxes on capital, which are borne more heavily by scrap firms than by resource and manufacturing firms, and provincial sales taxes that apply to business inputs, which also fall more heavily upon the recycling sector.",
author = "Kimberley Scharf",
note = "Copyright: Copyright 2020 Elsevier B.V., All rights reserved.",
year = "1999",
month = dec,
doi = "10.1111/j.1475-5890.1999.tb00021.x",
language = "English",
volume = "20",
pages = "451--477",
journal = "Fiscal Studies",
issn = "0143-5671",
publisher = "Wiley",
number = "4",

}

RIS

TY - JOUR

T1 - Tax Incentives for Extraction and Recycling of Basic Materials in Canada

AU - Scharf, Kimberley

N1 - Copyright: Copyright 2020 Elsevier B.V., All rights reserved.

PY - 1999/12

Y1 - 1999/12

N2 - This paper provides an empirical assessment of the overall incentives generated by taxes with respect to the choice between extraction and recycling of basic materials in Canada. We calculate measures of the overall impact of the Canadian tax system on the incremental cost of (i) producing virgin material or recycled material that is to be used as an intermediate input in the production of a final product and (ii) producing finished products. The sectors that we examine include producers of primary virgin material (forestry, mining, oil and gas), producers of recycled material (scrap dealers) and producers of finished products (metal, paper, plastic and glass). Our results indicate that the Canadian tax system significantly favours the use of virgin materials rather than recycled materials in the case of metal and glass products, but the reverse is true for plastic products. Features in the Canadian tax system contributing to these findings are not limited to corporate income and mining tax incentives at the exploration and extraction stages of the production of virgin materials, but also include provincial sales taxes on capital, which are borne more heavily by scrap firms than by resource and manufacturing firms, and provincial sales taxes that apply to business inputs, which also fall more heavily upon the recycling sector.

AB - This paper provides an empirical assessment of the overall incentives generated by taxes with respect to the choice between extraction and recycling of basic materials in Canada. We calculate measures of the overall impact of the Canadian tax system on the incremental cost of (i) producing virgin material or recycled material that is to be used as an intermediate input in the production of a final product and (ii) producing finished products. The sectors that we examine include producers of primary virgin material (forestry, mining, oil and gas), producers of recycled material (scrap dealers) and producers of finished products (metal, paper, plastic and glass). Our results indicate that the Canadian tax system significantly favours the use of virgin materials rather than recycled materials in the case of metal and glass products, but the reverse is true for plastic products. Features in the Canadian tax system contributing to these findings are not limited to corporate income and mining tax incentives at the exploration and extraction stages of the production of virgin materials, but also include provincial sales taxes on capital, which are borne more heavily by scrap firms than by resource and manufacturing firms, and provincial sales taxes that apply to business inputs, which also fall more heavily upon the recycling sector.

UR - http://www.scopus.com/inward/record.url?scp=0346392032&partnerID=8YFLogxK

U2 - 10.1111/j.1475-5890.1999.tb00021.x

DO - 10.1111/j.1475-5890.1999.tb00021.x

M3 - Article

AN - SCOPUS:0346392032

VL - 20

SP - 451

EP - 477

JO - Fiscal Studies

JF - Fiscal Studies

SN - 0143-5671

IS - 4

ER -