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Mining municipalities get the opportunity to prove their case for more tax dollars.

The waiting has paid off for the Association of Mining Municipalities of Ontario (AMMO).

Late last month the AMMO received word from Northern Development and Mines Minister Shelley Martel that the province will contribute up to $20,000 for a study the association is undertaking in an effort to convince the government to re-evaluate the distribution of taxes paid by mining operations.

Northern Ontario mining communities have complained for several years that they receive only a small portion of the taxes paid by operating mines. The association intends to study the issue and present its findings to the provincial government's Fair Tax Commission.

The AMMO passed a resolution calling for the re-evaluation during its May 9 meeting in Sudbury. It gave the province a Sept. 15 deadline to reply to the request.

When contacted in early October, Brock Smith, the deputy minister of Northern Development and Mines, admitted that the government had not dealt with the request expeditiously.

"Indeed, the handling of the request has not been as quick as it should have been. It will be dealt with quickly now," Smith said.

Martel made the funding announcement one week later.

AMMO president Ernie Massicotte of Elliot Lake stressed that the association does not advocate increasing the taxes paid by mining operations.

"We're not looking for any additional money. We just want to look at the way the money is put back into the communities," he said.

Peter McBride, a spokesman for the Ontario Mining Association, warned that the mining industry would have difficulty paying any additional taxes at the present time.

"Prices are not great right now. There have been cutbacks in production, and obviously anything that is going to add to a company's costs is going to be counter-productive," he said.

McBride said taxes, royalties on minerals and government-mandated costs such as the Employer Health Tax eat up about 52 percent of the average mining company's revenues.

"I think that mining companies already pay more than their fair share," he said.

The mining association has already committed itself to taking part in the study and will help cover the balance of the study's cost.

Massicotte reported that his association has "put aside" a request from some of its members for the province to tax underground mining operations.

"We want to let the study look at the problem and then we'll come up with solutions," he said. "You get into trouble when you come up with solutions before you look at the problem."

What will expedite the organization's efforts is that some work has already been done to examine the problem.

According to a report from the Sudbury Regional Development Corporation (SRDC), mining operations in Sudbury paid almost $587 million in taxes from 1974 to 1990, and the municipality only received $203 million from the province. The report was presented to the faculty of environmental studies of the University of Waterloo in June by SRDC general manager Frank Hess.

"The discontinuation of mining revenue payments in 1973 and the introduction of the Special Northern Support Grant payment was meant to shift tax revenues from Sudbury into the provincial coffers on a major scale," Hess wrote in the paper.

"The current practice is unfair and negatively affects both home owners as well as mining companies," he added.
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Title Annotation:Mining Report; Mining Municipalities of Ontario's study may provide support for claim for bigger portion of the taxes paid by mining companies
Author:Krejlgaard, Chris
Publication:Northern Ontario Business
Date:Nov 1, 1991
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