Committee spreads message about saving flow-through

The Save Flow-Through Committee travelling show continues to spread its message across Canada, with recent meetings in Newfoundland and Manitoba.

The committee, which is chaired by Eveline Kasner of Kirkland Lake, Ont., and has the support of the Prospectors and Developers Association of Canada (PDAC), drew about 70 people in storm-buffeted St. John’s.

Not present at the meeting was John Crosbie, federal minister for international trade and a Newfoundland MP, who, according to two PDAC representatives, has left them with the impression he agrees with the PDAC that a compromise solution must be found to reduce the impact Finance Minister Michael Wilson’s tax reform package will have on the mining industry.

Both PDAC President John Larche and the organization’s representative for Newfoundland and Labrador, Lewis Murphy, expressed similar thoughts on Crosbie’s support. The Northern Miner was unable to reach Crosbie for a comment. Larche said PDAC officials are to meet with Wilson in the near future. (Wilson is also to visit Timmins, Ont., May 15 on party business.)

Members of the committee have been criss-crossing the country in an effort to persuade the federal government to alter its plans to phase out the earned depletion tax break investors in junior-mining companies may currently be earning. Earned depletion

Known as flow-through financing, the tax-incentive scheme allows for a tax writeoff of $1.33 on each $1 invested in Canadian mining exploration. Planned by Ottawa is a cutback of the 33* 3/8% depletion rate to 16@ 3/8% by July 1 of this year, and then reducing it to zero (or 100%, making it a dollar-for-dollar tax deduction) on Dec 31, 1989.

According to Murphy, the St. John’s meeting heard from members of the Geological Association of Canada, the Canadian Institute of Mining and Metallurgy and investment dealers, all in support of retaining flow-through.

Larche told the meeting $25 million was spent in Newfoundland in 1987 on exploration, mainly the result of flow-through financing, and that that total is expected to rise to $33 million this year. The province reported a record number of claims staked and a record number of prospects (some 22 new occurrences) undergoing exploration in 1987.

Murphy said the mayors of two Newfoundland mining towns, Baie Verte and Springdale, both emphasized that their communities know how quickly economic conditions can go from “boom to gloom” and they outlined the benefits flow- through has brought to their towns. Good deal

An investment dealer said flow- through has been successful because it is a good deal. Most investments are in the $3,000-$10,000 range, he said, adding that flow- through is one of the few tax shelters that is fully understood by investors and it is a “good sell.”

Across Canada, it is estimated more than $900 million in flow- through financing was raised in 1987.

The cross-country symposiums have taken the committee from Vancouver to St. John’s, with still more planned. The Winnipeg meeting, a breakfast affair, drew about 39 people, said Kasner, who was unable to attend.

She was in Halifax several weeks ago when the committee symposium drew 170 people, and she recently returned to that city to address the annual convention of the Canadian Diamond Drilling Association.

More symposiums are planned for the Northwest Territories, Saskatchewan and Alberta, as well as rallies in Val d’Or, Que. (April 30), Rouyn-Noranda, Que. (May 1) and Kirkland Lake (May 14).

“There’s no doubt in my mind,” Kasner said when asked about the committee’s mission. “I’m confident * * * I believe the government did not realize the full impact flow- through funding had.”

Kasner said she believes the federal government will come up with an alternate proposal. The committee, she said, has to date raised about $80,000 from donations but will need more money to meet its commitments.