OMA releases mining sector economic contribution study

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

Click here for a copy of the report: http://www.oma.on.ca/en/ontariomining/resources/UofTMiningReport2012Final.pdf

The Ontario Mining Association’s 2012 mineral sector economic impact study “Mining: Dynamic and Dependable for Ontario’s Future,” was released today at the University of Toronto’s Rotman School of Management. University of Toronto economists Peter Dungan and Steve Murphy presented the key findings of their 81-page report, which was completed for the OMA, to industry representatives, government officials, academics and the media. Along with plenty of commentary and analysis, the study contains 47 charts, 32 tables and four maps.

“We know mining makes important contributions to the society and economy in all regions of this province and this study helps us quantify the scale of many of these positive impacts,” said OMA President Chris Hodgson. “Mining is an expanding component of the Ontario economy. The world wants Ontario’s mineral products and if the province provides necessary infrastructure support and maintains an atmosphere conducive to investment, it will continue to be pulled ahead by a strong mining industry.”

The report examines many different aspects of the Ontario mining industry, including its importance to the provincial economy now and in the future, and the industry’s efforts to make this contribution in an increasingly safe and sustainable way.

The analysis is based on three main sources: a wide variety of published data, a survey of OMA members and input-output calculations conducted by the authors.

Sections of the study show that output per worker in Ontario’s mining industry is $680,000 per year, which is six times the province’s industrial average. Also, mining in Ontario has an expanding workforce in which the average weekly mineral sector wage is about 60% higher than the average for all industry in Ontario.

Mining companies in Ontario contribute more than $800 million in taxes annually and personal income taxes paid by mining sector employees reach at least an additional half a billion dollars yearly. Capital investments in new projects are increasing and so are investments in mineral exploration.

The industry invests about $1,800 per employee annually in training and health and safety. Charitable donations by Ontario mining companies reach $10 million annually supporting local communities and provincial well-being in a broad range of ways.

Also, mining operations in Ontario acquire more than 70% of the inputs necessary for production within the province and more than 30% are obtained locally – within 80 kilometres of operations. While many mine suppliers can be found in the Sudbury-North Bay area, a large concentration of mine supply companies can be found in Toronto and Mississauga.

The authors wrapped up their presentation on the crucial role mining plays in international trade balances. “Since 2002, as the overall international goods trade deficit for the province has more than quadrupled, the trade surplus for Ontario mineral products has strengthened by more than $12 billion, remaining positive over the entire period.”

Mr. Dungan is the Director of the Policy and Economic Analysis Program at the University of Toronto and a professor, teaching in both undergraduate and graduate school programs. Mr. Murphy is a Research Associate at the school’s Policy and Economic Analysis Program. Both economists have been involved in a number of previous economic impact studies of the mining sector in Ontario. These include the OMA’s extremely successful representative mine study released in 2007 “Ontario Mining: A Partner in Prosperity Building – The Economic Impacts of a Representative Mine Ontario.”

Ontario is the leading mining jurisdiction in Canada according to a number of different production and economic yardsticks. At the presentation, Mr. Hodgson thanked the OMA board of directors for initiating the study, employees of member companies who worked on the confidential survey, the authors and Mines Minister Rick Bartolucci and the Ministry of Northern Development and Mines for their co-operation and support.

The full report “Mining: Dynamic and Dependable for Ontario’s Future” can be located on the OMA website www.oma.on.ca in both the Economic Contributions and Publications pages. You can download the study from the OMA website. After you have had a chance to examine the study, we welcome any comments, suggestions and ideas you may wish to pass along to us.

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