Ontario’s new budget gives miners a helping hand

The new Ontario budget, delivered by Ontario’s Finance Minister Dwight Duncan seems to pin economic progress on the back of mining and, in doing so, could give miners a little more elbow room.

The budget, which for the most part held true to Duncan’s earlier remarks praising mining as a vital component of Ontario’s economic success, proposed a series of funding initiatives that will benefit the mining sector.

Among them include: a $450-million Northern Industrial Electricity Rate Program (NIERP); a $45-million new project-based skills training program for Aboriginals and northern Ontario residents; the appointment of a Ring of Fire coordinator; and $1.2 billion in infrastructure development to strengthen northern communities.

Chris Hodgson, president of the Ontario Mining Association (OMA), applauded the budget for its inclusion of initiatives for the province’s key mining zones.

“The budget clearly recognizes the contributions mining makes to Ontario’s society and the role the industry can play in helping with its economic recovery,” said Hodgson, in a statement. “The budget is forward looking and helps protect existing jobs and investment( s) while creating new opportunities related to the Ring of Fire area in the Far North, which holds potentially large deposits of chromite, nickel, copper and platinum.”

Hodgson also pointed out that mining in Ontario is a $10-billion business that employs 200,000 Ontarians, provides the province with a $3.3-billion trade surplus and pays more than $600 million in corporate taxes a year.

As part of the NIERP, which will be available to industrial facilities that “commit to electricity efficiency and sustainability plans,” the government will give a two cents per kilowatt hour rebate, reducing electricity costs by 25% from 2009 levels.

According to the OMA, the mining industry spends more than $500 million annually on energy.

The government’s focus on the Ring of Fire in the McFauld’s Lake region of northern Ontario points towards the economic rewards the province is sowing there.

Duncan himself addressed its importance during his speech to deliver the budget.

“For the 21st century, the discovery of chromite in the Ring of Fire could be as big as the discovery of nickel was in Sudbury in the 19th century,” said the finance minister.

The region, which three years ago became home to the biggest staking rush in Ontario’s history, will now have a government-appointed Ring of Fire coordinator who will work as a liaison between aboriginals, northern Ontarians and the mining industry to “encourage responsible and sustainable economic development in the region.”

The skills training program and infrastructure upgrade funding allotments will help boost activity in the area and create jobs.

In addition to these, major initiatives that benefit the mining industry include the elimination of the capital tax on July 1, 2010, and a 2% reduction in the corporate income tax rate from 12% to 10% on income earned from manufacturing, processing and mining. The harmonized sales tax will also offer input tax credits and reimbursements.

“It is encouraging to see a budget which is strongly supportive of Ontario’s modern, high-tech, solution providing mining industry’s wealth and opportunity creating characteristics,” said Hodgson.