Mining taxes provide benefits for all of Ontario society

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 mining industry has a collective payroll in excess of $1.7 billion annually. According to the University of Toronto’s sectoral economic impact study Mining: Dynamic and Dependable for Ontario’s Future, this would “conservatively amount to more than half a billion dollars” in personal income taxes (PIT) paid to the federal and provincial governments.

Mining companies and their employees contribute to the tax coffers of all levels of government bolstering such crucial components of societal infrastructure as health care, education and judicial systems. These taxes come from many different sources. Mining industry employees through their salaries, not only pay PIT, but also GST, gasoline taxes, Ontario’s health tax, liquor taxes, property taxes and a number of other governmental related fees.

For mining corporations themselves, let’s begin by taking a look at payroll taxes imposed by both the federal and provincial governments. In 2011, mining companies in Ontario paid $170 million in payroll taxes, up from about $140 million in 2010. This is more of a reflection of an increase in the number of industry employees than any increase in these tax rates.

For 2011, the breakdown of provincial payroll taxes shows $77.1 million going to Workplace Safety and Insurance Board premiums and $34.4 million being paid through the Employer Health Tax. Federal payroll taxes paid by Ontario mining companies in 2011 amounted to $38.6 as Canada Pension Plan premiums and $18.9 million as Employment Insurance premiums.

Let’s not forget that mining companies are taxed more than corporations in other industries. Mineral producers pay all of the different and multi-faceted taxes paid by any other corporation and then on top of that, they pay the Ontario Mining Tax. This is a profit based royalty applied at a rate of 10% for all mines except diamond mines, which pay an Ontario Mining Tax rate of 13%. Payments to First Nations under impact-benefit agreements would also be added to contributions of many Ontario mineral producers.

“Ontario miners take corporate social responsibility seriously,” says the economic impact study. Mining companies in the province strive to be responsible partners in improving the community in which they operate. Responses to the OMA survey indicate that company charitable donations have approached $10 million in each of 2010 and 2011.”

Across the board corporate income taxes (CIT) can be a little more (pardon the expression) taxing to pinpoint. However, calculations in the University of Toronto study conservatively estimate CIT paid by Ontario mineral producers to have been in the range of $630 million in 2011 and about $400 million in 2010.

If you consolidate all federal and provincial tax estimates paid by Ontario mining companies contained in the economic study, you are looking at totals in 2011 ranging from $800 million to $1 billion. This is up sharply from the $500 million to $600 million estimate for 2010. Also, at the municipal level, mining firms pay more than $30 million annually in property taxes.

A full version of Mining: Dynamic and Dependable for Ontario’s Future, which can be downloaded, can be found on the OMA website Mining operations are responsible partners in society. Programs at the federal, provincial and municipal government levels all benefit from mining company corporate taxes and the personal income tax from highly productive and well paid mining industry employees.