Mining omitted by Ottawa in program for Ontario

Mining observers here say a $55-million economic development program announced July 13 doesn’t do much for the industry.

Michel Cote, minister of regional industrial expansion, and James Kelleher, federal solicitor general and MP for Sault Ste. Marie, travelled to Timmins to announce that small and medium sized businesses in northern Ontario would benefit over the next five years from $40 million in direct loans and grants.

In addition, the government will put up $15 million to cover the costs of arranging up to $60 million in loan guarantees in the 12 ridings that make up northern Ontario. That translates into $100 million to be made available to businessmen and entrepreneurs in northern Ontario over a 5-year period.

But members of the mining community see little in the announcement to get enthusiastic about.

“I didn’t see anything in the announcement for mining,” said John Larche, president of the Prospectors and Developers Association of Canada, “but it could help some of the communities in the north that are dependent upon mining for their survival. It could help to diversify their economies.”

Mr Larche said that while the mining industry is receiving no direct benefit from the announcement, he feels the government is showing it is sensitive to the needs of northern Ontario.

But other mining officials around Timmins say incentives for the mining industry were omitted in Mr Cote’s and Mr Kelleher’s announcement.

“There was nothing in the announcement that would in any way benefit the mining industry,” said Robert Perry, general manager of the Dome mine in South Porcupine. “Timmins appears to be especially left out which is a disappointment because the city is so mining oriented.

“One thing that could have been addressed was a centralized custom gold mill which could have encouraged the development of new mines,” he said.

Jim Reid, manager of the Timmins Economic Development Corp., said he didn’t see how the program was going to do much for the mining industry in the north. “What they should have done is left the flow-through share method of junior resource financing alone,” he said. “That would have been a bigger incentive to development in the north than any of the new programs.”

In June Finance Minister Michael Wilson proposed phasing out the earned depletion allowance on mineral investments. That would reduce the tax benefit to individual investors from investing in mineral exploration to 100% of their investment from 133%.

While the government chose Timmins and three other locations to make its announcement, it was Sault Ste. Marie that was awarded the new office and the secretariat to administer the new program. A director general will be appointed within a month who will be able to approve assistance of up to $250,000 on his own.

On larger grant and loan applications the 8-man advisory board and the director geneneral of the program will have to get approval from Mr Cote’s office in Ottawa.