Two steps back, three steps forward

"The new Ontario Liberal government introduced its first budget in October. The changes to The Mining Tax Act proposed in the budget are mean t 10 simplify the current system without any loss of revenue to the government. It goes without saying that some operators will benefit from the changes while others will pay more taxes after 1985.With regard to ongoing matters at the federal level, the proposed carve-out legislation and the issue of northern allowances are being discussed with government officials, and a small victory has recently been scored with regard 10 the laxation of certain share transactions of prospectors and grubstakers. A report on these issues is provided herein.Ontario BudgetOn October 24, 1985, Ontario Finance Minister Robert F. Nixon tabled a budget proposing several significant changes to both the Ontario Mining Tax Act and the province’s income tax legislation.Mining Tax ActA flat rate of tax and reduced processing allowances highlight proposed changes to The Mining Tax Act. The proposed changes, with a comparison to the existing system, are set out in Table I.The most significant change is the replacement of the graduated tax rate schedule with a flat 20010 tax rate. This is a welcome change for most mine operators who viewed the high rate of 30% on profit over $20 million as counter-productive.However, the flat rate of ta x may not be welcome to all operators. Generally speaking, operators with less than $ 10 million annual profit are better off under the graduated rate system, while operators with annual profit exceeding $10 million will benefit from the 20010 tax rate."