Ontario's auditor general slams province on mining development

In an annual auditor general'sreport that contained a litany of tough criticisms ofOntario'sLiberal government, theMinistry of Northern Development and Mines did not escape the spotlight.

Bonnie Lysyk said in her report Wednesday that the ministry isnot encouraging mining developments quickly enough, noting that Ontariois ranked ninthout of 10 provincesfor attracting exploration investment in Canada.

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"The Ministry of Northern Development and Mines has not been effectively encouraging timely mining development in the province, even though Ontario has a significantly lower tax rate on mining than the national average," the report says.

Lysykalsooutlined several other criticisms:

• The ministry's marketing strategies "may beineffective," the report says.
• The ministry is slow to makegeosciencesinformation available to the mining industry.
• There is a lack of clarity on the duty to consult with aboriginal communities, which slows investment.
• There has been little infrastructure development of theRing of Fire and nominerals extracted yet.
• Mine-closure plans lack sufficient technicalreview.
• Mining-company financial assurances maybe insufficient to cover mine close-outs.
• The ministry lacks estimates for abandonedmine cleanup costs, and does few inspections or follow-up on abandoned mines.
• Ontario has collected very little in royaltiesfrom the De Beers Canada Victor mine, the province'sonly diamond mine.

Northern Development and Mines Minister Michael Gravellesaid the report "certainly has given us a lot to consider as we work to continue to ensure that Ontario is the global leader in mining."

He says he takes the report "pretty darn seriously" and saysthe revised mineral development strategy his department is working on will include changes that reflect on some of Lysyk'srecommendations.

Hints at incentives

Gravellehinted earlier this week that there may be exploration incentives in the new strategy, which will be released before the end of the year.

He also says he's working on developing a new relationship with the federal government to move ahead with the Ring of Fire.

"I'm looking forward to having a, perhaps, very different relationship than we had with the past [federal] government, which I think will be crucial," he said.

Columnist StanSudol, who operates the websiterepublicofmining.com,says the government's poor record of attracting investmentdoesn't reflect well on the ministry.

He points to delays constructing a road to the Ring of Fire.

"If we can't seem to get our act together on a very simple infrastructure project like this, it reflects badly not only on the mining industry," he said. "It just reflects badly on the province."

The president of the Prospectors and Developers Association of Canada, Rod Thomas, says with no investmentno new mines will be found.

"The province itself is doing a great job in terms of providing geological data and of course they have revised the mining act, but as an industry and as a province I don't think we're doing a good job at finding new deposits," he said.