First year as mines minister had accomplishments, frustrations.

• Author: Krejlgaard, Chris
• Position: Hugh O'Neil; Ontario Ministry of Mines

First year as mines minister had accomplishments, frustrations

"A minister is part of an overall picture. Hopefully by having been there a year or two, you end up having done something for mining."

Nearly one year after accepting the portfolio, Mines Minister Hugh O'Neil believes he has made a mark as the provincial government's advocate for the sector.

"I see my role as an advocate for the industry," O'Neil said during a telephone interview with Northern Ontario Business. "I've tried to raise the image of mining with the government, because sometimes governments don't see mining as being important even though it provides between $8 billion and $9 billion for the economy and about 85,000 jobs in Ontario."

O'Neil's advocacy efforts have become increasingly important in the wake of a number of funding changes at the federal level. In the past year, the federal government has scuttled both the CEIP (Canadian Exploration Incentive Program) and preferential tax status for flow-through shares - moves which O'Neil says are wreaking havoc on the mining sector across Canada.

"The main problem facing the industry is the cutbacks in the federal programs," the MPP from Quinte said. "It has greatly curtailed the amount of exploration."

The loss of the federal incentives has necessitated an increase in the amount of funding provided by the provincial government. In his latest budget, provincial Treasurer Robert Nixon announced an additional $30 million for exploration programs. Of that amount, $25 million is earmarked to enhance both OPAP (the Ontario Prospectors Assistance Program) and OMIP (the Ontario Mineral Incentive Program). The balance of the funding will go towards a section of OMIP which will encourage exploration in designated areas.

Despite the influx of provincial funds, O'Neil admits more incentives are required.

"The funds are very beneficial to exploration, but they will never fill the void left by the loss of the federal funds," he said. "Both (provincial) programs have been well received by the industry, mainly because they zero in on individual prospectors."

O'Neil suggested that the sector "does not have the support of the Prime Minister" and that both the mining industry and the provincial governments must undertake a massive lobbying effort to recoup some of the lost incentive programs.

He added that the federal government's reluctance to discuss the renewal of the Canada-Ontario Mineral Development Agreement (COMDA) has the...