McGuinty Government Looking to Boost Taxes on Mining Sector

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Mining NowTHUNDER BAY – Editorial – An election would cost Ontario taxpayers about $70 million dollars. The McGuinty government appears to be gambling that the Progressive Conservatives and New Democrats will not want to go to the polls only six months since the last election.

The Budget brought down today at Queen’s Park puts much of the serious austerity the Drummond Report recommended on the back-burner. The McGuinty Government is protecting their investments in full day kindergarten, in education, and in healthcare.

In the Budget Speech, there is not one word on the Ring of Fire, or on how the potential benefits from Northern Ontario could be the impetus to bring the Ontario economy back on track.

The Ring of Fire is discussed in the Budget. “Resource-based industries are a vital part of a strong northern economy. The discovery of significant mineral deposits in the Ring of Fire, an area in Ontario’s Far North, presents major opportunities. The government has a plan in place to guide resulting investments and to help diversify the northern economy.

“Northern Ontario will benefit from mining the mineral deposits in the Ring of Fire area, which will help create jobs and better position the northern economy and Aboriginal communities for future growth. Proposed mine developments currently under consideration in the Ring of Fire are expected to create more than 1,500 permanent jobs once the mines are in full production. Additional jobs will be created in the mining service and supply sector.

“The government is building partnerships with northern Ontarians, Aboriginal communities and industry to maximize the benefits and overcome challenges associated with developing the Ring of Fire.

“In addition, the government is proposing legislation that would facilitate the implementation of a 1995 land claim settlement agreement by providing that certain lands held in trust for the Nipissing First Nation be deemed tax exempt under the Assessment Act.”

There are no broad plans, no discussion of how Ontario might facilitate the Ring of Fire.

However there is a plan afoot to likely increase taxes on mining companies.

“Ontario has introduced several mining tax incentives over the years that were designed to encourage investment at a time when Corporate Income Tax rates were high. Since Ontario mining operations have benefited from the recent steps taken by the Province to create an internationally competitive tax regime, the government is proposing to work with stakeholders in reviewing the current system to ensure Ontario receives fair compensation for its non-renewable resources”.

The provincial coffers saw $140 million dollars from mining taxes last year. It appears now the goal is to boost that figure with higher taxes.

When the McGuinty Government put a special new tax in place on diamonds mined in Ontario, the result was a promise from the industry that no new diamond mines would be opening in the province. The prospect of boosting the taxes the companies working to bring the chromite promise of the Ring of Fire sends the wrong message to the mining sector.

That in itself should be a concern to Northerners. Perhaps the message sent by Premier Dalton McGuinty when he skipped attending the Northern Leaders Debate last September is now resonating across the region once again.

There is tremendous opportunity in Northern Ontario, but it appears too often that Dalton McGuinty is missing that opportunity.

It would not be the first time. In the 2007 Election Campaign the Premier talked about how Ontario would lead the world in the development of hydrogen powered rail. Ever since that September day in Thunder Bay the Premier has been ‘Silent Sam’ on that proposed development opportunity.

Likely this budget will pass, saving Ontarians, at least for now from an election. However there were and are tremendous opportunties which have been left out of this plan. If the PCs or New Democrats push the McGuinty Liberals hard enough, chances are the Premier will bend and put in enough change to ensure that his minority government can continue.

James Murray