A Surprise

Oh here's a surprise. Now its I told you so time. Almost forty years ago, before it was fashionable, I was urging Northern Ontario to aggressively separate from the hideous leeches of Queen's Park.

While you read this article from today's Star and if you are a Northern Ontario resident, remember this crap next time. And realize that not a single farthing, or penny collected from any tax like this will go back into Northern Ontario, it all go into things improving the government limousine service in Toronto or a thirty pay increase for southern a$$hole politicians.

Conclusion. This is an I told you so article. Its time for a Northern Ontario Party specifically representing Northern Ontario and working feverishly for a new province or completely separate country if Ottawa proves equally ignorant to the long ignored Northern Ontario. Its time to leave.

* The following article is sourced from that money pig, Liberal loving, Northern Ontario hating newspaper the Star ...today's issue. Its purpose is solely intended for the education of the many students that read this blog and not for commercial purposes.


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Diamond tax dooms investment, northerners say TheStar.com - News - Diamond tax dooms investment, northerners say

May 06, 2007

Chinta Puxley
Canadian Press

A paragraph buried deep in the Ontario budget is crushing burgeoning optimism that northerners will see a renewed mining boom fuelled by exploration for diamonds, nickel and other mineral deposits.

The province's first diamond mine is one year away from starting production, but that didn't stop the governing Liberals from quietly introducing a new tax of up to 13 per cent on any diamonds mined in Ontario in their March budget.

To many in the province's north, that paragraph in the stack of budget papers – which came as a surprise to northerners and the mining industry alike – represents a grave threat to hope that's been building in remote communities.

Many say the tax is a signal to prospective investors and exploration companies that Ontario is prepared to single out any mineral and slap on a royalty before any mine even begins operation.

"Are they trying to kill the north?" asked Wayne Taipale, mayor of Moosonee, Ont., just south of James Bay. "What are they trying to do? Stop the development? Right now, we really need it. With the timber industry dying, there are no jobs."

Hope has been scarce as well, Taipale said. Young people don't see the point in going to university or college since they are just going to drive a cab or work behind the counter in a local store, he said.

The De Beers Victor diamond mine in nearby Attawapiskat changed all that, he said. The diamond giant is spending $1 billion to build the mine, employing many local people in the process and creating 400 local jobs, he said.

"I've been here for 49 years in Moosonee, I've never seen work like that," Taipale said. "We're all feeling the same way. We're very uncertain now what's going to happen here. This just feels like someone has put nails in the coffin for the north."

The tax isn't enough to stop the Victor project, but Timmins Mayor Tom Laughren said it's enough to deter other potential investors. It's a short-sighted tax grab given just one more $1-billion diamond mine would inject more into provincial coffers than this tax, he added.

"There is a lot of exploration going on in the north, specifically for diamonds," Laughren said. "My fear is it may trigger people to look elsewhere just because the tax regime will be uncertain."

That's a distinct possibility, said PriceWaterhouseCoopers mining tax expert John Gravelle. Exploration companies look for stable tax regimes – something Canada and Ontario has always offered, he said.

"This makes Ontario look less stable given that it has increased its tax quite substantially – two-and-a-half to three times higher," Gravelle said, adding companies also look for a fair application of taxes.

"There is no real reason why diamonds should be taxed any differently than other metals such as gold and nickel."

Opposition Leader John Tory vowed to roll back the tax, if he is elected premier in October, on a recent trip up north.

But Finance Minister Greg Sorbara said there are several good reasons behind the tax. Ontario is simply following the lead of the Northwest Territories, which has a similar tax rate, he said.

"We have to remember that the diamonds that are going to be extracted belong to the people of Ontario and we have to make sure that there is a fair return for the people of Ontario," Sorbara said in an interview.

To suggest that having a "single and similar royalty rate for the diamond extraction industry" will scare away other investment in the north is just "fear-mongering," Sorbara said.

Singling out any other Ontario metal or mineral is "simply not in the cards," he added.

Tory said it's not surprising that other companies would lose faith in the government's word given that the Liberals hiked diamond taxes less than a year after Premier Dalton McGuinty welcomed De Beers with open arms at their ground-breaking.

"To have that very same government turn around and just shaft these people and do a tax grab in the middle of the night, I think is inexcusable," Tory said. "It sends all the wrong signals . . . to every industry."

The province should roll back the tax before sitting down with people in the mining industry to set a fair standard going forward, said Tory.

The company that inspired the tax in the first place said it doesn't expect the government to change its mind now.

The best De Beers can hope for now is a "tax holiday," which would give the mine a chance to get up and running, said De Beers spokesperson Linda Dorrington. The mine represents a sliver of Ontario's overall mineral production value, she added.

"We feel that they've not really thought this royalty through," she said. "For a small amount of income coming into the government treasury, they're creating a very big negative effect."