Together against the diamond royalty

COMMENTARY/ONTARIO MINING ASSOCIATION

The proposed 13% diamond royalty, which was presented in Ontario’s recent budget, is serving to unite a number of diverse groups that are against it.

Representatives of the mining industry, First Nations, municipal politicians, labour organizations and opposition political parties have all found common ground in opposing the royalty for a variety of reasons.

At the recent Northwestern Ontario Municipal Association (NOMA) conference held in Dryden, Ont., Ontario Mining Association president Chris Hodgson raised the concerns of member companies.

Said Hodgson: “Perhaps the true danger of the imposition of the diamond royalty is that Ontario’s reputation as a good place to invest enters into rougher waters. And Ontario’s reputation as a good place to invest in mineral development has been eroding.”

At the conference, NOMA passed a resolution petitioning the provincial government to amend the Ontario Mining Act to include diamonds on the same royalty basis as all other minerals. NOMA representatives believe the proposed 13% royalty will adversely affect future diamond exploration and mine development in northern Ontario. The Prospectors and Developers Association of Canada echoed that sentiment and has urged that the diamond royalty be evaluated in terms of its negative impact on companies, communities and the province.

Mike Carpenter, chief of the Attawapiskat First Nation, believes the diamond royalty will harm future development and opportunities for aboriginals in Ontario.

“We believe that this increase constitutes little more than a tax grab by the McGuinty government and it will not benefit our First Nation, or others throughout northern Ontario,” Carpenter said. “De Beers Canada’s diamond mine is the first and only opportunity our community has ever had to break free of our soul-destroying poverty. This diamond royalty tax will steal the future of our children. Premier McGuinty must honour his government’s original agreement with us and take back this tax.”

Progressive Conservative Party leader John Tory has staked out an election issue on the royalty.

“A Progressive Conservative government will roll the diamond tax back for the Victor diamond mine and then sit down with the industry to decide how we can best restore confidence in Ontario as a place to do business,” he said.

New Democratic Party leader Howard Hampton has also been aggressive in his denunciation of the proposed royalty, both inside and outside of the Ontario legislature.

Gilles Bisson, member of provincial parliament for Timmins-James Bay, where the mine is located, has been supported by the Timmins and District Labour Council in his criticism of the royalty.

“If they decide to change the rules overnight, who’s going to want to invest in diamond mining in Ontario,” Bisson asked. “If a gold mine opens up beside the Victor project and pays half the tax, that isn’t fair.”

Northern mayors have also voiced concerns about the royalty being counter- productive to development in their communities.

Wayne Taipale, mayor of Moosonee, Ont., has noted the improvements in infrastructure the diamond mine has brought with roads and enhanced electricity reliability.

“We’d like to see them find another Victor in our area, not in another province,” he said.

Timmins, Ont., mayor Tom Laughren considers the royalty a short-sighted tax grab.

“There is a lot of exploration going on in the north, specifically for diamonds,” he said. “It may trigger people to look elsewhere, just because the tax regime will be uncertain.”

With all these voices rising against the royalty, we can very well ask, who is for it? Perhaps it is time for the government to reconsider the long-term implications for all Ontarians and try to find a solution to its self-created 13% problem.

–The preceding is from an information bulletin published by the Toronto-based Ontario Mining Association.