Canadian Mining Journal

Feature

No Shortage of Issues to Tackle: Safety Competitive ElectricityOPP Gold Squad Tax Reductions

Q: The mandate of the Ontario Mining Association is to improve the competitiveness of the mineral producing industry in this province. I know the range of activities the Association is involved in is ...


Q: The mandate of the Ontario Mining Association is to improve the competitiveness of the mineral producing industry in this province. I know the range of activities the Association is involved in is incredibly broad, but could you give a few examples of what you would consider to be the OMA achieving its mandate during 1999?

A: In the 15 years I have been at the OMA, there has never been a shortage of issues to tackle. Though the main ministry dealing with the mining sector is the Ministry of Northern Development and Mines, the OMA crosses into areas that involve contact with the Ministry of Natural Resources, Ministry of Environment, Ministry of Labour, Ministry of Energy, Ministry of Finance, Solicitor General, Ministry of Municipal Affairs and others. Since OMA Chairman Andy Rickaby focussed on safety, I would like to mention some successes in this area first.

Q: How can safety impact competitiveness?

A: The Ontario Mining Association has long advocated the philosophy and practice of “safe production,” with the emphasis on “safe.” The safety of workers comes first, and the promotion of safety is a key to competitiveness. Also, there are direct costs involved. Premiums paid to the Workplace Safety and Insurance Board (WSIB) to cover workers’ compensation expenses are related to an industry’s safety performance. Through its greatly improved safety performance, the industry’s WSIB premiums are now about $65 million annually. In the early 1990s, the industry was paying more than $100 million annually.

Q: Has the OMA helped control other costs of mining operations?

A: Energy accounts for about 10% to 15% of total operating costs of a mine, and mines in Ontario spend about $250 million annually on electricity. The OMA has worked on its own and in conjunction with other groups-particularly the Association of Major Power Consumers in Ontario (AMPCO)-to give companies a better opportunity to manage their electricity bills. The OMA has worked to help create numerous special rate options, which have proven to be beneficial to mining companies and the entire electricity system in the province. In November 2000, a competitive electricity market is scheduled to open in Ontario, ending the 94-year-old monopoly of Ontario Hydro. OMA member companies are significant participants in the evolution of this competitive electricity marketplace, which is destined to provide benefits to all electricity consumers.

Q: What is another example of a money-saving initiative?

A: The OMA has helped the Solicitor General to re-establish the Ontario Provincial Police Gold Squad-now known as the Precious Metals Enforcement Squad. This unit holds the potential to save companies money and to ensure all residents of Ontario benefit from the tax revenue generated by gold and precious metals mining.

Q: Is theft from gold mines really a major issue; and isn’t this a crime that actually harms no one?

A: Yes, theft from gold mines is a major issue and it costs millions of dollars a year. Though estimates vary, we are looking at significant quantities of stolen precious metals. Also, I cannot emphasize strongly enough that this is not a victimless crime as some people think it is. Theft obviously robs a company of a product it sells. However, theft in gold mines is also a crime against fellow workers and the entire community where they live and against Ontario taxpayers. Theft has the potential to shorten the life of mines, reduce revenues, raise operating costs and negatively impact the vitality of mining communities in Ontario. This is a serious crime; the resurrection of the OPP Gold Squad is a major step in recognizing this and combating the problem.

Q: Are taxes of concern to the mining industry at this time?

A: Mineral producers in Ontario pay more than $300 million annually in taxes, and their employees pay another $300 million-plus in taxes every year. The current government has made a commitment to review taxes that apply to the mining industry with an eye on reducing them, once the Ontario budget is balanced. The OMA initiated a tax study, which indicates that Ontario’s mining tax is uncompetitive when compared with other jurisdictions inside and outside Canada. The OMA is seeking to have the Ontario Mining Tax changed from 20% to 12% to put it more in line with other Canadian provinces.

Q: Miners often complain that they have an image problem in that the public holds an antiquated view of mining, which does not reflect the high-tech, environmentally sensitive realities of modern mining in Ontario. Did the OMA embark upon any major communications initiatives to give people a better understanding and appreciation of the mining industry in 1999?

A: The 10th annual Ontario Mining Week helped celebrate the official public opening of the Inco Limited Gallery of Earth Sciences at the Royal Ontario Museum on May 30, 1999. The OMA and its members in co-operation with the Ministry of Northern Development and Mines and the programs department at the ROM presented this special day. This newly created $4.25-million, 14,000-square-foot permanent gallery at the ROM is now open as a new flagship in mineral education.

Also, in 1999 the Ontario Mining Association launched its own web site. This information source can be found at www.oma.on.ca. The OMA web site features details about the OMA and its activities, posts the major publications of the association, and contains direct links with member companies and related organizations. With a user-friendly index, the OMA web site also contains the data found in “The Economic and Fiscal Contributions of the Mining Industry in Ontario.” This publication, which is produced by management consultant Ernst & Young for the OMA, has become the recognized source for reliable data on the mining sector in Ontario.

We like to think our web site not only talks about our association but that it provides valuable and accurate information on mineral production in this province. In addition, in 1999, the OMA in co-operation with the Ministry of Northern Development and Mines published what can be viewed as a citizen’s guide to mining. The 20-page booklet “Mining In Ontario: A Wealth of Opportunity/A Wealth of Benefits” is proving to be a popular item for teachers and others working to improve the public’s mining literacy level. The new OMA web site and this booklet are useful communications tools available to broad audiences.

Q: What approach are you going to take, or what underlying philosophy are you going to follow, in representing the industry for the next year and into the future?

A: You can never be totally satisfied because there is always more to do. However, I recognize you cannot achieve all your goals at once. The OMA takes a longer term approach and helps build a solid foundation for a healthy and productive mining industry, which is recognized and appreciated for its contributions to society in Ontario. The OMA works constantly, consistently, co-operatively and constructively, in a non-partisan way, to ensure the voice of mining is heard in government. The OMA works closely with the Ministry of Northern Development and Mines on many issues and strives to enhance the respect of the industry. Marshall McLuhan is often quoted as saying the “medium is the message.” The OMA is the medium and the message. It is a small, dynamic, hard-working team, which reflects the reality of the industry it stands up for responsibly. I know the OMA has made the most of the resources available to it to ably represent one of the most modern, dynamic, productive and interesting industries in Ontario-mining-and it will continue to do so.


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