Ontario is a Strategic, World Class, Mining Superpower

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Ontario´s fortuitous blessing of rich geology has provided this province with a mineral endowment that has supported human development for generations.  Over the decades, there has been a steady evolution of the legislative framework that governs mineral development in the province.  Currently, the Mining Act is going through another review and consultations on proposed changes in the legislation are taking place across the province. 

While some changes in the Mining Act may be welcome and necessary to reflect shifts in societal expectations, at the Ontario Mining Association, we hope they are completed reasonably quickly so the new rules are clarified and communicated to provide certainty to investors and companies developing mining projects.  This is crucial because it can take years, or even decades, to develop a mineral deposit into a producing mine and investment decisions are often made years in advance.  As a result, any period of uncertainty in the regulatory system can disrupt the investment cycle and have far-reaching consequences on our future prosperity. 

Minister of Northern Development and Mines Michael Gravelle has said the purpose of the Mining Act review at this time is to strike the right balance.  The balance between responsible and sustainable mineral development for the benefit of all Ontarians while updating the mineral tenure system and the security of investments, Aboriginal rights related to mining, exploration activity on Crown land, land use planning in the Far North and surface rights/mineral rights issues.   This is not an easy task, particularly if one considers that mining functions in a highly competitive and increasingly globally mobile business environment.  With the added element of international competition thrown into the balance that we are seeking, the task at hand will truly require the patience and understanding of all involved because the stakes — our future prosperity — are high.

The Royal Ontario Museum has an exhibit to show that the ancestors of current First Nations residents were mining in Ontario at least 10,000 years ago.  They were using the resources of the earth to make implements and tools to improve their lifestyle.  Though technology advances, let´s not lose sight that creating the building blocks of modern society is still the purpose of mining.  The tools and implements are more sophisticated and complicated in the 21st century, but mining still brings the resources of the earth to light to improve our lifestyles.  The latest advances in communications, transportation, medicine, education, energy, housing, construction and other fields are not possible without mining.

In his Budget this year, Ontario Finance Minister Dwight Duncan said “mining has been one of Ontario´s great recent success stories.”   We think the minister is right but we may quibble about the word “recent.”  We think mining has a long history as well as a bright future as a success story.  However, while the Mining Act consultations go on, let´s at least stop for a moment and consider the positive impact of the industry.

Though the number fluctuates with various commodity price changes, at the moment mining in Ontario has revenues of about $10.7 billion annually.  The sector employs about 25,000 people directly, a total of about 100,000 directly and indirectly and the mineral sector cluster employs close to a total of 200,000 people in the province.  Mining is the largest private sector employer of Aboriginals.  It is an industry which invests in its future — $1.7 billion annually in construction, equipment, exploration and Research & Development — $2,300 annually in safety training per employee, $130 million in environmental protection and more.

Corporate taxes alone paid to governments are more than $450 million annually.  Along with the same corporate taxes paid by other sectors, the mining industry also pays the Ontario Mining Tax, a profit based tax which further ensures that all Ontarians benefit from the development of this rich geology and mineral endowment. Income taxes paid by people working directly in the industry could be estimated to be $1 billion annually.  This makes for a lot of financial support for health care and education and other services in the province.  The industry also has an incredibly envious level of productivity of more than $500,000 of output annually per employee. 

Mining is an important engine for regional development.  It is an industry which is active in all parts of the province.  Diverse communities such as Windsor, Goderich, Perth, Midland, Sudbury, Timmins, Red Lake, Kirkland Lake, Marathon, North Bay and Attawapiskat all have mining as an important contributor to their local economies.  Essentially 95% of the operational inputs to the Ontario mining process are Canadian (43% of the supplies and services purchased by a mine are within a one hour drive of that operation).  When this is combined with the fact that over 80% of mineral output is exported to markets in the United States, Europe and Asia, the Ontario mining industry contributes immensely to improving Ontario´s international balance of trade.

“Overall, the Ontario mining industry matters to Ontario for its direct mineral production and related tax revenues and the jobs this production sustains, but also for the fact it is a largely “made in Ontario” industry that contributes disproportionately to reduce the provinces´s international deficit.” — from Ontario Mining: A High Tech productivity Powerhouse 2006.

As all those participating in the current review of the Mining Act in Ontario move forward, let´s hope the changes lead to an improvement in the industry´s ability to contribute responsibly and sustainably to a better future for all Ontarians.

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