Beneath the Surface - Ontario government response

Jim Wilson Ministerial Letterhead

Ms. Joan Kuyek
National Co-ordinator
MiningWatch Canada
City Centre
508-880 Wellington St.
Ottawa ON K1R 6K7

Dear Ms Kuyek:

Thank you for your letter regarding the report prepared by MiningWatch Canada and the Pembina Institute for Appropriate Development and the copies of the summary report.

I understand that the chapter of the report on Ontario was an attempt to compare the relationship between the level of the government support for the metal mining industry and the related economic benefits for the fiscal years 1994/95 and 2000/01. The Ministry of Northern Development and Mines has reviewed the chapter on Ontario and noted that there are questions regarding the accuracy of data on estimated government expenditures on the metal mining sector and significant limitations to the analyses and scope of the study.

The Ministry recognizes the efforts that were made to obtain and reference the data and to develop estimates for program expenses and taxes, however it has not been able to reconcile a significant number of figures used in the analysis. The information relating to tax expenditures is particularly speculative and the uncertainty of the expenditure figures in general compromises the validity of the comparisons.

Further limitations to the analysis relate to the attempt to describe a trend based on comparing information for two government fiscal years and the assumption that benefits from the metal mining sector are restricted to mining royalty payments and direct employment at mining operations. The measure of the overall contribution of the metal mining industry to Ontario is much broader than the report suggests. Ontario's mineral wealth gives the province an inherent advantage over many other jurisdictions that lack mineral resources. Mining is an important contributor to the province's economy and is particularly important for the economies of rural and northern communities. In general, most of the employment and about 60 per cent of the supplies and services for mining operations in Ontario are provided within a 50-kilometre distance of mining operations.

The government recognizes the shift in mining investment from Ontario to other mining jurisdictions over the past decade, and has therefore introduced policies and initiatives to improve the competitiveness of Ontario's mining industry and to ensure the sector's longterm sustainability. These policies and initiatives were not developed in isolation from other provincial priorities, as the government also addressed the need to protect the natural environment by expanding the system of parks and protected areas in Ontario.

In view of the limitations of the data, analyses and scope of the study used to estimate the costs and benefits of the metal mining industry to Ontario, I believe that a number of the conclusions in the report are questionable or misleading. There are concepts reflected in a few of the recommendations that Ontario does support, including the reclamation of abandoned mine sites, the use of geoscience information for managing water resources and the reuse and recycling of metals.

Once again, thank you for writing and please accept my best wishes.

Sincerely,

Jim Wilson, MPP, Simcoe-Grey
Minister

c. John Gammon, ADM