Letters to the Editor Thanks for almost nothing

Re your editorial Thank Wilson, for small mercies, and related articles June 29: The proposals contained in the White Paper on Tax Reform provide a great challenge to the survival of a stable and healthy mineral exploration industry. The proposed elimination of earned depletion allowances, combined with the maintenance of flow- through shares with reduced benefits, is hardly anything for which to be thankful.

Most of the incentives for true grass-roots and high risk exploration will be sacrificed, as you say, “to create a level economic playing field,” (whatever that is). The fact that there are “virtually no other tax shelters” is largely irrelevant. Investment is profit-driven and high risk activities without compensative incentives will be lost by grass-roots exploration to lower-risk advanced exploration and development. Without new prospects the industry will ultimately stagnate.

The Northern Miner’s focus of coverage on flow-through shares does a disservice to prospectors, independent geologists and partnerships. Much exploration is generated by these entrepreneurs who benefit primarily from earned depletions and only indirectly from flow-through. The Northern Miner’s campaign to save flow-through was at least partly successful, but generally ignored earned depletions which may now be eliminated. The exploration industry must lobby hard for the maintenance of earned depletion allowances or an equivalent tax incentive, particularly for those entrepreneurs who take the greatest risks. J. R. Clark Ixion Research Group Montreal Que.