Editorial Ups and downs at the PDA convention

The mood at this year’s convention of the Prospectors and Developers Association of Canada will likely swing somewhere between exhilaration and apprehension.

Among the 3,000 or so delegates expected to attend there will on the one hand be the euphoria arising from an exploration scene in Canada these days that can only be described as slightly incredible. From coast to coast, exploration operations, most of them for gold, are literally at full throttle. There’s scarcely a drill to be had anywhere in the land.

The magic phrase for all this of course is flow-through financing, a subject which has become a hot potato in more ways than one. It has driven the exploration engine at amazing speeds, accelerating every year since its inception. The PDA for instance estimates that last year some $700 million will have been spent on exploration in Canada, about $550 million of which will have come from flow-through funds. (That latter figure is, incidentally, only a little more than the estimated 1986 flow-through figure which appeared in a recent issue of The Northern Miner, in a letter from Minister of State for Mines, Gerald Merrithew.)

The apprehension along the corridors at Toronto’s Royal York Hotel, on the other hand, will arise from the possibility that Finance Minister Michael Wilson may damage or even eliminate the flow-through mechanism when he gets down to dealing with his tax reform package sometime this spring.

There is genuine concern about it, and not without reason. Mr Wilson has been blanketed by industry associations and individuals presenting the strong rationales for flow-through retention, but while it came through unscathed in the recent budget, the finance minister has not denied that he would be looking at flow-through as part of his over-all tax reform plan.

The pessimists don’t include outgoing PDA President Lionel Kilburn, who himself has done yeoman work in arguing the flow-through case not only at Ottawa, but anywhere else there are ears to listen. Mr Kilburn, who says his argument anywhere he presents it has boiled down to the simple but expressive phrase, “It works. It ain’t broke, don’t fix it,” says it’s his belief that there is a better-than-even chance flow-through will be retained.

Meanwhile, at the 3-day convention the PDA is at pains to try to broaden the country’s exploration base into something more than gold, putting emphasis at convention sessions for instance on the platinum group metals and on industrial minerals. “We want people to be thinking in new directions,” says Mr Kilburn. “Other opportunities are coming, so let’s be attuned to them.”

That may sound vaguely heretical to the gold bugs, although there’s no suggestion that gold will or should be sidetracked in any way. Still, the PDA has a point in trying to open the door this year to look out into new exploration horizons.

And to keep that door open, the PDA will continue its fight at Ottawa and elsewhere to retain the flow-through concept. Right after the convention it will appear before a Parliamentary committee on tax reform. Where it once existed primarily just to run a convention, the association has now developed into a strong, well organized lobbying apparatus to further its members’ legitimate aims. We’re behind it all the way.