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Ontario mining royalties 'pitifully low': MiningWatch Canada

Ontario's mining royalties are “pitifully low” said MiningWatch Canada in an open letter to Ontario's auditor general.
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Mining industry veterans from Vale Canada, Fuller Supply and Stantec shared some of their knowledge and experience with mining students from Sudbury’s three post-secondary institutions during the annual Mining Day event at Laurentian University on Thursday evening. File photo
Ontario's mining royalties are “pitifully low” said MiningWatch Canada in an open letter to Ontario's auditor general.

The organization has asked Auditor General Bonnie Lysyk to exercise her office's “value-for-money” mandate to evaluate the province's review of its Mineral Development Strategy.

“Pitifully low mining royalties, very low corporate taxes, direct and indirect subsidies, give-away prices on electricity, unaccounted social and environmental costs, and hundreds of millions of dollars in mine site clean-up costs are all major concerns,” wrote Ugo Lapointe, MiningWatch Canada's program co-ordinator, in his open letter to Lysyk.

Lapointe said mining companies in Ontario have generated more than $93.3 billion in gross revenues over the last 10 years, but the province has only received 1.5 per cent of that amount in royalties.

“We could learn from some of the First Nations, that are very good negotiators with mining companies,” Lapointe said.

During his 2014 municipal election campaign, Sudbury mayoral candidate John Rodriguez said the city could get at least $30 million in mining royalties per year, if it were to strike a deal with the province to get a fair cut.

Rodriguez said when he was Sudbury mayor in 2007, local mining companies paid around $60 million in royalties to the province and federal government.

Lapointe said the province should look into improving its regional re-distribution of mining royalties so mining jurisdictions, like Sudbury, can better benefit from any royalties.

“When the mines go away, what's left behind?” he asked.

MiningWatch Canada also asked the province's auditor general to investigate the potential costs of remediating Ontario's abandoned mine sites.

“Ontario does not have any official numbers out there,” Lapointe said.
When Quebec audited its mining industry in 2009, that province's auditor general determined it would cost about $1.2 billion to clean up around 80 mine sites.

Ontario has as many as three times more mine sites that need to be remediated.

“I think it's fair to say the cost in Ontario would probably be $2 billion or $3 billion,” Lapointe said.

He added the Mount Polley mine disaster, in which a breach of the mine's tailings pond in British Columbia released 4.5 million cubic metres of slurry into Polley Lake, raises questions about the safety of tailings management across Canada.

“To our knowledge, Ontario mining authorities have not done anything to adapt current regulations and guidelines to the Mount Polley expert panel report,” Lapointe said.

The expert panel report, published Jan. 31, 2015, made seven recommendations including getting rid of water in mining tailings, to create more stable dry stacks.

In addition to its open letter to the auditor general, MiningWatch Canada also participated in an early consultation to inform the province's updated Mineral Development Strategy.

The province established the strategy in 2006, and according to Northern Development and Mines Minister Michael Gravelle, it has been due for an update because of different market conditions and changing technologies.

Mining sector stakeholders have until May 8 to submit their final written comments to the Ministry of Northern Development and Mines minister to help shape the province's new mining strategy.