EDITORIAL PAGE Ontario won’t benefit from NDP win

As one pundit put it the day after Ontario elected an NDP majority government: “It can’t mean any good for mining.” That seems to sum it up. We would be delighted if proved wrong, but the election of a socialist government in the country’s most important mineral producing province can only increase the pressure on an industry already seeing its profits decline.

And while the NDP says it understands the importance of a mixed economy, some things from the NDP’s past still send shudders down one’s back. The NDP membership has, for example, stated that its policy is to nationalize Inco’s nickel mining operations.

That must surely be a policy the NDP has outgrown, something only by the most extreme elements in the party still adhere to. Provincial governments do control natural resources in this country, but taking over nickel mining in Sudbury hardly seems realistic for a provincial government in the 1990s, even for the NDP. It is something Premier-elect Bob Rae would do well to resist.

Exploration companies, the hardest suffering in the mining sector today, must be mightily disheartened at the NDP win, too. Juniors need some form of incentive to renew private investment in mineral exploration. They are not likely to find support in an NDP government. The NDP is unlikely to go to bat for juniors seeking reforms to the federal capital gains tax.

There are also broad indications that this government will bring higher corporate taxes, further regulations to increase wages and benefits, tougher environmental requirements — in short, more government involvement and less incentive to succeed.

We know the experience of British Columbia under the NDP in the mid-1970s. It was disastrous, particularly for the resource industries. Excessive royalties almost ruined mining in British Columbia and onerous securities legislation brought equity markets for junior exploration companies to a grinding halt.

Bob Rae and his caucus, having the benefit of learning from provincial governments in British Columbia, Saskatchewan and Manitoba, are likely to prove more sophisticated than the government of Dave Barrett. But the British Columbia experience is still the most applicable model by which to judge this situation. And that is not a comforting thought.

Meanwhile, a newly elected Conservative government in Manitoba and a Quebec government that has demonstrated solid support for mining for years are likely to draw activity that might otherwise have been invested in Ontario. Perhaps Ontario’s loss will prove to be something of a gain for those two mineral producing provinces.

Overall, however, an NDP government in Ontario cannot be good for mining. There is simply no upside. The only question is, how deep will the downside be?