LETTERS TO THE EDITOR Governments sap industry’s vitality

I wish to address the plight of the Canadian mining industry in these troubled times. It is abundantly clear that the vitality of our industry has been sapped by severe, adverse and counter-productive government policies. The policies sow the seeds of their own failure by failing to focus on the fact that the creation of new wealth, through the natural resource sector, provides the funding and financing necessary to cover the costs of government programs. Failure to focus on a fiscally responsible course of action will ultimately result in the bankruptcy of our country.

I argue that Canada is well on the way to this ignominious fate because of mismanagement at all government levels and that the citizens will reap a bitter harvest if remedial action is not taken to rein in expenditures and encourage wealth- creating natural resource industries.

I am a geologist professionally involved in the mining exploration sector and find that there is a clear lack of interest in the risk-taking activity necessary to promote the mine finding and mine development necessary to continue our prominent role on the global scene. The main problem in the deterioration of our industry is the lack of appreciation by politicians and bureaucrats of the unique nature of the mining industry.

Tax policies, ill-advised environmental initiatives and lack of investment incentives all conspire to threaten the mining and other resource industries which have truly built this country. One only needs look at the economic mainstay of the northern part of our provinces and the northern territories to appreciate the economic wasteland it would be without mining.

Does the government think that providing bureaucratic services to dispense welfare in the northern areas is the solution for the threatened demise of the mining industry?

Investors in natural resources are to be nurtured, not vilified and abused; or they will go elsewhere and Canada will be the loser. Investors take the risks and should be allowed a return on investment commensurate with those risks. Let us be proud of our natural resource- based economy and encourage development through our entrepreneurs.

In order to provide the proper incentives to the mining sector, I recommend that provisions should be made for rewarding success in mining exploration. These provisions should especially include tax- free capital gains, after a reasonable hold period, for investments in junior mining companies and tax-free option payments to independent prospectors. They are becoming an endangered species in our country because of the shabby treatment accorded them by our governments. J.H. Tremblay Toronto, Ont.