News Release: Golden rule: Every new mine would improve Ontario’s finances

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.

Just one new gold mine in Ontario could provide more than 2,200 direct and indirect jobs and pay more than $102 million in tax revenue for all levels of government annually, according to a new study “An Au-thentic Opportunity: The Economic Impacts of a New Gold Mine in Ontario.” University of Toronto economists Peter Dungan and Steve Murphy presented the key findings of their report, which was completed for the Ontario Mining Association with assistance from the Ministry of Northern Development and Mines, today.

“With the increased value and relative importance of gold mining production in the province in recent years, as well as the number of announced projects currently the pipeline, it was decided that the impact of a gold mine would be the subject of our analysis,” said Mr. Dungan. “This study also recognizes the scope for the possible benefits that can be realized by Aboriginal groups.”

The four-pronged study demonstrates the positive economic impacts on an annual basis for both an underground and an open pit gold mine and for both types of operations during an estimated three-year construction phase of a new mine and the production phase of these mines, which could last for decades. The economists have used broad sources of public data, mining company disclosure documents and economic models from the Input-Output Division at Statistics Canada.

For example, an underground gold mine with about $300 million in sales annually with 620 direct employees, would create 894 jobs from mine supply companies and a further 690 induced jobs largely in the retail and service sector. Induced jobs are created through direct and indirect employees spending their wages, which are well above the provincial average.

“These studies done by the economists at the University of Toronto, who have a long history of examining the mineral sector, are truly valuable,” said OMA President Chris Hodgson. “Though conservative in their nature and in their assumptions, the numbers in this study speak loudly and clearly about the positive contributions a new gold mine would make for the economy of Ontario.”

“The paper puts academic weight into and quantifies the knowledge that the addition of a single modern gold mine can provide well-paying skilled jobs, enhancements to Ontario’s Gross Domestic product, gains in the province’s trade balance, support for infrastructure development, more First Nations opportunities and higher government tax revenues,” he added. “Perhaps the most important aspect of the widespread benefits of new gold mine is the open doors it provides for thousands of people to develop, hone and practice their skills for the benefit of broader society.”

Mr. Dungan is the Director of the Policy and Economic Analysis Program at the Rotman School of Management 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 2012 report “Mining: Dynamic and Dependable for Ontario’s Future” and the extremely successful base metal representative mine study released in 2007 “Ontario Mining: A Partner in Prosperity Building – The Economic Impacts of a Representative Mine Ontario.”

At the presentation, Mr. Hodgson thanked the OMA board of directors for initiating the study, employees of member companies who lent their expertise to establishing realistic data, the authors, OMA Manager of Communications Peter McBride and Northern Development and Mines Minister Michael Gravelle and the Ministry of Northern Development and Mines for their co-operation and support.

The full report “”An Au-thentic Opportunity: The Economic Impacts of a New Gold Mine in Ontario” can be located on the OMA website along with info-graphic depicting the key findings of the study. 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.