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Prospectors receive $30-million assistance package.

Prospectors receive $30-million assistance package

Ontario's mining industry received a needed and expected boost from the provincial government.

The boost, in the form of a $30-million incentive package, was announced by Treasurer Robert Nixon in his latest provincial budget and was explained by Mines Minister Hugh O'Neil during a whirlwind tour northeastern Ontario on May 4.

The package was widely expected following the elimination of the Canadian Exploration Incentive Program (CEIP) from this year's federal budget.

"The feds have been hard on the mining industry during the last few years," O'Neil commented, while discussing the effect the loss of both flowthough shares and the CEIP has had on the industry.

O'Neil made stops in Sudbury, Timmins and Kirkland Lake during the tour.

Of the $30-million package, $25 million will be used to enhance OPAP (the Ontario Prospectors Assistance Program) and OMIP (the Ontario Mineral Incentive Program). According to O'Neil, the latter program will receive the lion's share of the funding.

Under OMIP, companies can receive grants -- equal to 30 per cent of eligible expenses -- for exploration activity, including diamond drilling and some underground exploration. Funding for the program has been increased by $6 million this year and $8 million in the following two years. In addition to increased funding, the ceiling for individual grants has been doubled to $300,000 and the cost of market studies, as well as laboratory and pilot plant studies for industrial mineral projects are now eligible for grant money.

Flow-through-share-funded companies will be eligible for OMIP grants.

The remaining $3 million will be used to increase the funding for OPAP - which was introduced as a one-year, $5-million program in Nixon's 1989 budget - to a total of $4 million annually over the next three years. The program provides grants to individual prospectors. The guidelines for the program have not been changed.

The increased funding drew praise from the head of the Northern Prospectors Association (NPA).

"The Ontario government is doing its best to accommodate us and help the industry through some hard times," said NPA president Michael Leahy. "They're making a conscious effort to help areas that have been hard hit.

"I'd just like to see the federal government do as much."

Leahy suggested the federal government could assist the industry without a great deal of bureaucracy by modifying the Income Tax Act to benefit prospectors and junior mining companies.

O'Neil added that OMIP will be utilized to assist certain areas which are facing economic hardships.

Projects in communities designated by the province will be eligible for the a 50-per-cent refund of eligible expenses (20 per cent more than in non-designated communities) to a limit of $300,000 per individual or company.

"The $5 million is a sweetener," O'Neil said, adding that other programs will also be in place to develop small businesses in Elliot Lake.

The minister also announced that Elliot Lake is the first community to receive a designation under this program. A map outlining the designated area was expected to be released shortly after the announcement was made. O'Neil said the move was made in response to the downsizing of the operations of both Rio Algom Ltd. and Denison Ltd.

CHRIS KREJLGAARD Staff Writer
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Title Annotation:Ontario provincial aid to mining industry
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Jun 1, 1990
Words:531
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