Ontario Mining Association Pre-Budget Letter Advocates Strategic Government Investments

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.

The Ontario Mining Association´s pre-budget submission encourages the government at Queen´s Park to make strategic investments in the mineral sector to promote future economic development.  “The Ontario mining industry has enjoyed — until recently — one of the most prosperous and lengthiest periods of its history of making contributions to the society and economy of the province,” said OMA President Chris Hodgson in a letter to Ontario Finance Minister Dwight Duncan.  “However, the current economic circumstances which are dominating the news are providing challenges for individuals, companies, entire industries and governments alike.”

The letter outlined massive decreases in the market prices of Ontario´s key mineral commodities — nickel, gold, copper, zinc, silver and palladium — of between 50% and 80% over the past year.  Companies have reacted to slides in the prices of their products with production cutbacks, temporary mine closures, workforce reductions and revised business plans.  “Mining benefits all regions of Ontario and given this outlook of difficult economic times and harsh business climates, it is increasingly important for the industry to work with government to ensure that programs, regulation and legislation sustain mining investment and employment in the province,” said Mr. Hodgson.

“At this time, the OMA would like to encourage the government to make strategic investments in the mining sector to promote future economic development and take action to improve the competitive position of the industry in the world,” he said.  The type of strategic investments the OMA is recommending include geological mapping, advancing human resource development and education, skills enhancement and training for Aboriginals, incentives for Research & Development, smarter regulatory systems, enhanced infrastructure development including the electricity system and exploration incentives.

The OMA also emphasized the need for certainty in the rules applied by government in its submission.  In another communication shared with several other groups, the OMA re-emphasized the need for improvements in the regulatory process.   Businesses in Ontario could be more competitive if regulations were simplified, if a competitive assessment test for new policies, standards and regulations was applied and if regulatory and process certainty was improved. 

“All in all, Ontario´s mining industry is a productivity powerhouse,” said Mr. Hodgson.  “It is a modern, high-tech, solution-providing industry that delivers benefits to all parts of the Ontario that far outweigh the size of the industry relative to many others.  In the world, demand for minerals and Ontario´s minerals is only going to increase,” he added.  “As of today, the global population is estimated at 6.7 billion which pushes demand for future growth and development that cannot take place without mineral and metal products needed for telecommunications, power production and transmission, agriculture, transportation, health care and medicine, consumer goods and environmental improvement.”

An important study by the University of Toronto “Ontario Mining: A Partner in Prosperity Building” shows that one representative mine in Ontario directly employs 480 people, indirectly employs more than 1,800 people, contributes about $280 million to the Gross Domestic Product and provides $84 million in tax revenue annually.  We need to ensure that Ontario´s mineral sector is able to respond to that demand.  Strategic investments by the Ontario government will help to position all Ontarians to benefit from the next upswing in global commodity markets through a strong mining industry.