Editorial A cheap shot aimed at Ottawa

In fact, that seems to be the whole purpose behind this niggardly handout. It’s not to help prospectors, it’s to point the finger at Ottawa as the bad boy for taking away a tax incentive that had the industry working at record levels in 1986 and 1987. Exploration activity has slowed dramatically since then, partly because of Ottawa’s changes but more importantly from a declining gold price and a risk-averse stock market that is still gunshy after the October, 1987, market crash.

In other words, it’s going to take a lot more than $5 million to cure what’s ailing the mineral exploration industry. That $5 million probably won’t even offset other measures in the same Ontario budget: increased taxes on gasoline, diesel fuel and aviation fuel; monthly instalment payments on the mining profits tax; a 1.95% payroll tax to pay for Ontario’s health insurance plan. If Ontario Treasurer Robert Nixon wants to buy support from the mineral exploration industry, he’s going to have to pay more than $5 million.

The current Ontario government has put considerable emphasis on mining. Unfortunately, it has not always been a favorable emphasis given the contribution the industry makes to the provincial economy. Even the government’s stated intention to revise the outdated Mining Act, a laudable objective on the whole, will probably add up to greater costs for mining should the proposed revisions ever make it into law.

Compared to the $34 million provided over two years to the province’s film industry in this latest budget, the contribution to mining hardly seems worth the effort. Robert Ginn, president of the Prospectors and Developers Association of Canada, says he was pleased with the $5 million being provided for mineral exploration but asks whether that ratio of assistance reflects the two industries’ comparative contribution to the province’s economy. No other industry has a tax comparable to the mining profits tax, a tax expected to provide $150 million for the provincial treasury beyond all the other taxes the mining industry pays.

If the Ontario government feels that programs put in place to assist mineral exploration deserve greater funding, it should say so. With dwindling ore reserves in several key minerals, it could make a very good case for such funding. But to hand the industry $5 million merely for the sake of a cheap shot at the federal government is a waste of everyone’s money.

But then why should Nixon care? It’s not his money he’s spending, it’s ours.

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