OMA NEWS RELEASE: Miners discover some gems in provincial budget

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.

Some encouraging words for mining could be unearthed from the provincial budget “A Prosperous & Fair Ontario.” The first budget of the province’s Finance Minister Charles Sousa was presented yesterday at Queen’s Park.

One of the significant actions outlined in the document holds the potential to give mining companies a better opportunity to control electricity costs. “The government is moving forward on the planned extension of the Northern Industrial Electricity Rate (NIER) program, which assists Northern Ontario’s largest industrial electricity consumers – and key economic contributors – to reduce energy costs for large users, supporting their employees, families and communities and maintaining global competitiveness.”

“The program was first announced in March 2010 for a three-year period and the province is extending the NIER program by investing an additional $360 million over three years – starting in 2013-2014,” said the budget document. “Its three-year extension will continue to support growth and development in northern resource sectors such as forestry and mining.”

The Finance Minister also announced infrastructure investments of $35 billion over the next three years. These investments, which are to be in transportation, health care and education, will support 100,000 jobs each year. This included “a new dedicated fund to help small, rural and Northern municipalities address roads, bridges and other critical infrastructure.”

Miners will benefit from the infrastructure upgrades. Other aspects of the budget, which can assist the industry with challenges it is facing, include Youth Jobs Strategy, the expansion of trade agreements and support for First Nations training, community support plans and the Aboriginal Loan Guarantee Program.

The budget also reiterated the government’s support to turn the potential of mineral deposits – those identified and those yet to be found – in the Ring of Fire area into valuable contributing assets in Ontario’s economy. “The Ring of Fire is one of the most promising mineral development opportunities in Ontario in almost a century. Located in Ontario’s Far North, current estimates suggest multi-generational potential of chromite production and significant production of nickel, copper and platinum,” said the budget.”

“The government is working with industry and First Nations communities to explore and develop mineral extraction opportunities in the Ring of Fire area in an environmentally sustainable way. The government is committed to helping First Nation communities benefit from extracting minerals in the Ring off Fire area through resource revenue sharing.”

However, there was one potentially ominous note in the budget involving the Ontario Mining Tax. This tax levies an extra profit based royalty on Ontario mineral producers of 10%, with a rate of 13% for diamonds and 5% for remote mines.

“The 2012 budget announced that the government would conduct a review to determine whether Ontario receives fair compensation for its non-renewable resources,” said the budget. “The government looks forward to working with stakeholders over the next several months to ensure that the province is supporting the exploration and production of minerals while receiving a fair return on its resources.”

The budget of Finance Minister Sousa contains a combination of restraint, stimulus, investment in the future and hope. A plan is outlined to turn the 2012-2013 provincial budget $9.8 billion deficit into a modest $500 million surplus by 2017-2018. Commitments are made to support infrastructure, youth training, First Nation capacity building, health care and justice. Throughout this, mining remains well positioned to contribute to efforts to create jobs, grow the economy and increase government revenues.

 

Comments are closed.