New president installed Rising cost of gov’t programs among major

A number of issues should keep the new president of the Ontario Mining Association (oma) busy during the next two years, not the least of which is what the industry calls “government mandated costs.”

John Gordon, 57, vice-president of Noranda Minerals Ltd., who took over the oma’s presidency at the end of March, told The Northern Miner in an interview that “the level and proliferation of programs” by the government is a growing financial concern to the mining industry.

As an example, he pointed to contributions made to the Worker’s Compensation Board (wcb). “It’s a major cost as far as we’re concerned,” he said, explaining that while costs have been on the rise, the injury rate within the mining industry has been falling.

According to a recent oma government submission, the province’s mining industry will pay a maximum wcb assessment of $2,849 per employee in 1987, up 6% over last year’s rate. The oma says the cost per claim, from 1978 to 1986, jumped by approximately 180%.

Costs are up in other areas, too. In the last five years, during which metal prices have fallen, the oma says the cost of electricity has jumped 50%, natural gas 78%, unemployment insurance 178%, wages 55% and compensation assessments 66%. Over-all, the oma reckons government mandated costs represent almost 20% of a mine’s operating expenses.

Another concern of the industry is flow-through share funding for mineral exploration, a scheme which allows tax breaks to people investing in companies involved in exploration work. The federal government permits a tax writeoff of $1.33 for every dollar invested.

Federal Finance Minister Michael Wilson is to present a tax- reform paper this spring and there is speculation the flow-through scheme will be changed or eliminated. Mr Gordon sees no reason for a change. “The present system is satisfactory. It’s working well,” he said.

Talk by the finance minister of removing many corporate and personal exemptions and closing loopholes in the tax legislation has helped fuel the speculation, but again Mr Gordon sees no need insofar as flow-through funding is concerned. “We don’t consider it to be one (a loophole),” he said.

At the provincial level, Mr Gordon said the recent decision by Queen’s Park to eliminate the graduated tax of up to 30% imposed on mining profits, and replace it with a flat 20% rate (retroactive to 1986), will have “a positive impact on the industry.”

A native of Sydney, N.S., and a graduate of Queen’s University, Mr Gordon started his mining career working for the Dominion Coal Co. in Nova Scotia during the summers while a university student and after graduation. In 1955 he worked with the National Coal Board in England.

Mr Gordon joined Noranda Inc. in 1956, becoming mine supervisor at the Horne Mine in Noranda, Que. In 1959 he was appointed mine superintendent, Hallnor Mines in Pamour, Ont., and mine manager in 1962. Three years later he was made mine manager of Aunor Gold Mines.

In 1967 he was transferred to Noranda’s potash division, becoming mine superintendent. In 1970 he was appointed general superintendent, Central Canada Potash, and in 1971 became mine manager.

In 1976 Mr Gordon was appointed general manager mines for Noranda and became vice- president mines Central Canada for the company in 1981. He was appointed group vice-president of Noranda in 1982.

Among Mr Gordon’s present functions is serving as vice- president and director of Hemlo Gold Mines.

Mr Gordon is a member of the Canadian Institute of Mining and Metallurgy and the Association of Professional Engineers of Ontario. Outside interests include tennis, swimming, skiing and gardening.

The oma represents 37 mining companies, including firms mining salt and industrial minerals in southern Ontario, which directly employ approximately 30,000 people.

Among the various oma projects underway is the establishment of a mining research directorate in Sudbury whose mandate, Mr. Gordon said, is to review, administer and manage mining research in Ontario and, at some point in the future, across Canada. A managing director was recently hired for the non- profit directorate.