Ontario lags in mining rankings: uncertainty in regulations and land tenure worries miners.

• Author: Ross, Ian
• Position: MINING - Survey

Ontario may promote itself as being among the best mining jurisdictions in the world, but some industry executives polled in a Fraser Institute survey are second-guessing that blanket statement.

A special mid-year report penned by researchers Fred McMahon and Miguel Cervantes raises some red flag issues for investment.

Confidence in Ontario continues to sag due to respondents' concerns over government policy, dealings with First Nations, and uncertainty over whether a big chunk of Ontario's untapped mineral resource will be set aside for protection.

"Mining is a long-term endeavor," said Fred McMahon, vice-president of the Vancouver-based international public policy think tank. "That kind of instability is very damaging."

As commodity prices improve, McMahon said governments, unions and non-government organizations are finding mining an easy target to tear up existing agreements, drive up costs, and introduce "predatory taxes" that cause instability in investment.

McMahon said these dramatic changes in recent months prompted the Fraser Institute to release its first-ever mid-year report card in August.

The survey revealed that as commodity prices recover, 41 of the 51 jurisdictions that miners operate in internationally are becoming "more hostile" and more costly to do business because of new regulatory hurdles and taxes.

Alberta, Quebec, Yukon, Saskatchewan, Newfoundland and Labrador were ranked in the top 10 mining jurisdictions in the world.

Compared to a Fraser survey released earlier this year, Ontario edged up marginally in the world rankings from 22nd to 20th.

Quebec, which ranked first earlier this year, dropped to third due to an increase in mining taxes, which companies claim was done without consultation, and worries over pending legislative changes in that province's mining act.

What's keeping Ontario down in the rankings is the uncertainty over which lands are being set aside for protection as wilderness or parks.

McMahon had no idea if it's related to the Ontario government's controversial Bill 191, the Far North Act which has provoked universal negative reaction from communities, business and First Nations.

There is also concern by miners in their dealings with First Nations and their demands.

Some mining companies accused the McGuinty government of trying to "kill Ontario" and hinted that anti-mining environmental activist groups have considerable weight in, shaping public policy. One said his company would not invest in the...