Ontario budget draws praise

By recognizing mining as a significant contributor to the province’s economy, the new Ontario budget has drawn a favorable response from industry representatives.

While operators have been guaranteed tax cuts and an increase in their capital cost allowance, prospectors and junior companies can expect some positive changes with respect to government incentives for exploration and development.

“There are, in fact, significant parts of the budget that deal with northern resource issues,” says Steve Parry, chairman of the Save Our North committee. “There’s certainly reason to be optimistic that we have accomplished something.”

Save Our North is a grassroots campaign designed to solicit support for the natural resource sector from the provincial and ultimately, federal governments. Launched last December by the Porcupine Prospectors and Developers Association, the campaign has spread to most of Ontario’s northern communities.

Parry is particularly encouraged by the NDP’s stated commitment to work “with the mining industry and northern communities to review incentives for mineral exploration and development.”

Although the wording is vague, Ed Solonyka, manager of exploration incentives for the Ministry of Northern Development and Mines says he is optimistic the review will produce some concrete initiatives.

“I would hope that after the review, if there are some reasonable suggestions, the government would proceed with them.”

Some of the industry suggestions include reviving a modified version of the federal Mineral Exploration Incentive Program, which was killed in 1988, and increasing the accessibility of the Ontario Mineral Incentive Program (OMIP). But any new incentives will have to conform to a shoestring budget. The ministry’s total budget has been slashed by 16% from $368 million to $309.7 million. OMIP funding, already fully allocated for 1992-93, has been reduced to $7 million from $9 million last year.

The popular Ontario Prospectors Assistance Program, which offers grants of up to $10,000 to individual prospectors, will maintain a budget of $4 million. The NDP government is also committing $11 million to computerize its assessment files and maps, and will continue to put $30 million per year into the Northern Ontario Heritage Fund.

From an operators standpoint, the budget contains at least two positive developments, says Peter McBride at the Ontario Mining Association (OMA). A one percentage point drop in the corporate tax rate from 14.5% to 13.5% should help offset the negative impact of lower metal prices and a 5% increase in the capital cost allowance for new equipment could stimulate investment.

But while the mining industry seems pleased with the content of the budget, Opposition Leader Lyn McLeod says it does nothing to encourage economic recovery in the north.

“We would have expected something in this budget to respond to the special needs of the north,” McLeod said in a prepared statement. “Instead, the budget is significant by what it does not provide.”