Editorial Governments rally to the mining cause

Two events last week, one coinciding in time with the other, brought a considerable degree of encouragement to Canada’s beleaguered mining industry.

One was the unveiling, in Ottawa, of a new federal minerals policy by Minister of State for Mines Gerald Merrithew. In Toronto, at almost the same time, Ontario Treasurer Robert Nixon, in the new provincial budget, declared in something of a surprise move that taxable mining profits from the first 36 months of production from a new mine in Ontario would be exempted from provincial mining tax.

Mr Merrithew’s policy statement, (embodied in a 50-page document) drew generally positive response from the mining industry. Mining Association of Canada Chairman Walter Curlook said the six objectives of the new policy (reported in a front page story in last week’s issue of The Northern Miner), “were very supportive of the mining industry in Canada, because they recognize the importance and contribution of the minerals and metals industry as a vital segment of the Canadian economy, and aim at making our industry more competitive among world producers.”

An element of the new policy that helped reinforce the industry’s satisfaction, was that it did receive the attention and approval of Cabinet, adding force to what successive ministers of mines have been saying for some years now about the necessity of a policy framework structured out of Ottawa.

Some aspects of the policy statement merit particular applause, among them the relaxation of foreign investment restrictions on mining. Although in the report the government’s stated intention to set aside the practice of seeking 50% to 60% Canadian equity in new non-fuel mineral resource projects is not particularly new, it is the first time it has been widely publicized. Others include the statement’s emphasis on technology, and its stated intention to promote export sales for the industry and help in obtaining market access abroad.

In at least one area, though, the policy disappoints. While it calls for the Canadian International Development Agency in its assistance to less developed countries to take fully into account the impact on international mineral markets and its effects on the Canadian industry, it does not do so in the case of the Export Development Corporation and the impact of its initiatives abroad on mineral markets and the industry.

There seems little to complain about in Mr Nixon’s mining tax holiday in Ontario, and it’s described by Ontario Mining Association Executive Director Patrick Reid as in general terms a “pretty good thing.”

It will help such current projects in the province, for instance, as Minnova Inc.’s zinc project in northwestern Ontario, which is slated to go into production in the second quarter of next year.

Though it’s a speculative proposition, some of the impetus for the unexpected tax break probably came from Premier David Peterson himself, who has continued to personally carry the Northern Development and Mines portfolio, since the resignation of former Minister Rene Fontaine.

In general, it has got to be both a practical and psychological lift for the industry to have two levels of government showing such initiatives at a time of considerable need.