Editorial Flow-through gets at least a reprieve

There was good news — and a little bad news — in Finance Ministe r Michael Wilson’s recent budget, at least as far as the mining industry is concerned.

The good news of course is that flow-through financing is still so lidly intact, even though that may be just a temporary blessing. It would have been generally unwise for the minister to fiddle with tax reform, in the broad sense, before issuance of a white paper, and Mr Wilson refrained from doing this, on flow-through and on other tax matters.

We’ll just have to wait and see how he reacts in that white paper to the importuning on behalf of flow-through that he has been receiving in heavy doses from such bodies as the Mining Association of Canada, and the Prospectors and Developers Association of Canada, and from many individual members of the mining community who have been personally bombarding Ottawa on the subject.

The betting generally seems to be that he’ll leave it alone, having got the message that to kill it, or even wound it, would be disastrous for the industry. Nobody on the other hand, knows for sure, and the MAC and the PDA will be keeping up their defensive fire. We don’t want to see the “breathing space” ascribed to the budget as just time to work out a strategy for flow-through attack. Over-all, while there was little in the budget that could be construed as having an adverse effect on mining, there was one item that George Miller, managing director of the MAC, sees as bad news. That was the increase in excise tax on motive fuel, from 3 cents a litre, to 4 cents a litre. Mr Miller computes that that 1 cents increase is worth about $7 million to the industry, particularly of course in open-pit operations, where energy is a huge cost element.

The Association will fight back on this, as well as on the flow-through issue. Meantime, it behooves everyone, individuals included, to keep up the pressure at Ottawa on the latter. Mr Wilson may have got the message, but nobody should count on it.