Document 2J56Ddmrm7yBbn1w5V6dKD9Db

L1A16214 4*j--# ' LEAD INDUSTRIES ASSOCIATION H UXPHTOW tVDM nw raw *. m. %. ^ wn f o * mucinoN acm as pis t s or t h e l eas pasTicr pt cman 1 i t f, U Halim, iiiu to tha Comptroller Tbe Consolidated Klnlnf and Sealting Company tf Cm*1, ltd* ? i 5 It is Indeed * privilege end a pUusn to bo given the oppor^7 tc trl^ / g7*;tl** rw u im! )nuwr txn coonotri of poor northern neighbour and to apeak to you about the port ldvieh Canada pisy* la ths production of load. I k/ww that ic m cf you olroody hews oory intimate knowledge of this subject, not only tram personal visits but also from financial interests in producing c Imi and potential Canadian producer*. Hcwrrer, tor tho benefit of those of you *o ere not oo foallior with this subject X should Ilk* to discuss briefly the production at lead In or country and porbapa one or tao proHsms shi.ch a Bust faoa and resolve* A1though I raallsa that statistics are boring, any caulderstlom of tha fotura picture Bust be based on the production, eonsiaptloo and export figures tar previous years. According to the latest figures supplied by the Ooeinlon Bureau at Statistics ths production of lead in bullion plus recoverable lead in Canadian area and concentrate* shipped for expert in 1918 and 19U9 mas 167,?51 tone and 160,191 tone respectively. The production of refined lead free all tourers, l.e. including msounta recovered fron foreign ore* treated in Canadian miters totalled 146,115 too* in 1919 coopered with 160,0?$ tons in tha year 1949. With the single exception of tha year 1911, the output for these too years is loeer than for any ether year during the last decade. Canada's peak production of 256,000 odd team, in all forms, bu s achieved in 1942 under tho stimulus cf ear. I eight add that, fra the standpoint of world prediction, Canada now ranks fourthj being surpassed ty tha Doited States, Australia and bailee in that order. At tinea Canada has rankad third ahead of Kexlco. Briefly, let us exmine the reasons for this reduced output. Airinc the early '40's, as you can appreciate, ths mads of war placed the aephasis on production. As a result, Airing tha last few years much aore ties has been devoted to doing a considerable amount of soaoalled dead work and development, which oeoessarlly was postponed during the war years. Therefore, one should not rite this reduction in Canadian outpet during tha last eouplo of years with alarm as it merely represents a retmra to a ore normal and orderly production, luring this tins, area with PrMeottd at th* 22nd Anna*! N*tlng( Ltftd Industrie# iiioditlo^ April 1950/ Chicago, Uiiaoif at th* fto*l i&acaMlon of L**d Pro<fcor* i ! i i !t r^VriTi 11 i l i i i i i i i i i i i i tiiiTiaiin rtM jiw a itih li *m \ H ii i m i r LIA16215 *^-' --- - f, ^rtlj*,'V ~ --^irih**" " - - ------~r - - - * -*--i \ i Hait)i\ enlarged working erwi, a larger part than usual of the endeavours of aoat of US* Canadian producer* he* boon devoted to additional develop* i Bast and to getting our mine# back into food crdtrly abapa. Undoubtedly, Ute higher prices of lead iCilch prevailed in 191*8 and 19u9 greatly assisted in perfo-aing these noth neadad chore* in a nuch ahortar time than would otherwise have bean tha c***. Turning to consumption, the Canadian coosuaption of primary refined lead during 191*9 a* about 1*9,000 tons as ccpared with approx imately 55,000 tona In 191*8, Vhilc neither m a peak year, thia rata la (till more than doubla the normal conawptlon of Canadian Industry prior to tha ear, Bara again the iacraasa la due in large part to the great industrial growth which took place in Canola under tha stimulus of nr, is uaual, thia industrial growth was aoeoapanled ty as equiv*. lam expansion m use Beta! seane*ting inousuy. it soil oa ream ly apparent froai the figures just quoted that cur production greatly exceed* our consumption. The difference of 100,000 ton or bo t v must of necessity bo exported if our Canadian load slning industry is to remain in a healthy coalition. In this respect the Daltod Kingdom has in tha past always barn# our chief expert market for lead, aa well as for tha ether non-ferrous Botals, tine and copper, 5poeial efforts bar* been, and are being mads, to hold thia market and 1 shall revert to this problem later, Perhaps the moat interestlr^ development, however, during the past several yuan has bees the marked Increase in exports of refined lead to the Dnltad 0 States. Because of hifh freight rates, the lead aoncantrate productions of several of the Eastern Canadian mines have always gone to tha United State* for treatment. The export of refined lead to United States markets is, hewever, a comparatively new development and I would not be surprised If, when the export figure* for 191*9 arc released, they will show tha United States to have eurpasaed tha United Kingdom as a market for Canadian produced lead. Generally speaking, lead ores seldom occur as such la but arc usually associated with othor base metals such as tine and copper* The farmer being the most prevalent associated mineral. Mora or laM silver is also usually associated with our lead ores and in maty of the smaller properties, particularly In British Coltnbla and tha Tukoo* silver is the predominate metal value of the deposit. Significant amounti at gold are also found in acme deposits. As a result, practically all Canadian lead ores have tha added advantage of other metal credits, , Occurramom* of lead la Canada are found in the provisoes of Dora Scotia, lie. Bninswlok, Quebec, Ontario, British Columbia, tha Yukon and korth last Territories anl, in addition, in our rvoeotly acquired tenth province, gewfoundlend. Production la, however, largely confined to British Columbia, Quebec, sod Vewfoundlaadj with the first mentioned province accounting for over 99> of the total ld produced from Canadian i ores, I might sty at thia point that the estimated value of the lead 9 production In Ik-itleh Columbia for 191*9 1* *1*5,000,000 out of a total value of 11^0,000,000 for all mining within the provine*. This o<*par*a r with a value for lead of better than $60,000,000 out of a total of i 1152,500,300 for all mine production in British Columbia la 191*3, Tha print factor In the predominance of British Coltmibda la Canadian production f nmm IJUU MWMHaiWK I.WHIPPP- w 'j ii.i -111 il8dHnl1iiiiiH]i jfi iViiirr HF -i LI A16 216 wXM*, vmm i - ---- -> -- P JKPI,.!:<I>,I imn11..11i>iiiHymiHPUi| i Jl!- puniMjijiilH-j,. Is ths Sullivan Hina situated at Kimberley, TMi mine, aa moat of yoo know, la owned and operated ly The Consolidated k'lnlng and omaltlng Company of Canada, limited, who** Lead Saelter and Mfinary, aa nil aa other Uetaliurjleal and Cheidcil works, art located at Trail, British Columbia* Trail la oa tha Columbia River about 15 miles north of tba United State* border and la about 200 allaa tgr rail west of Kimberly. Tlrtually, 1001 of tha refined laad production of Canada la prodaoed at the Trail load smelter. Thl* aweltcr not only treat* all tha lead concentratal from tha Sullivan Mine, but alao aoat of tha lead orw* and concentratoa prodocod la other parti of tha province aa well aa tha production# from several >iob*c mine*. In addition, tha Trail antIter la treating Increasing tonnages of Imported laad ores and coneentratea, for your information the baaa bullloa fra the ameltar la all refined elactralytleally fcy tha Batta proeeaa to produce eorrauing ptM lead aao toe rmiinery nee e Miecily in esoee (00 tons par day. - Now a mord or two about tha future. Tha knoen laad reservaa of Canada have been estimated at bstween 6-1/2 k 7 mllllco toM of recoverable metal which Include* tom* marginal arc. By fir tbs large#* deposit contributing to this total la, of course, the Sulllvmn mas at Kimberley. There have baaa no aubetantdal rectct flnda of load era la Canada and generally apaaklng tha older proprtl* show declining lead-time ratio* at depth. HI char price* for baaa mctala hare, of course, greatly stimilated prospecting and tba search for atm lead deposits, as well as promoting tha development of known and older deposits. This appli.t In general to Canada as a whole. Speaking particularly of British Colssshia, tharw is considerably increased activity In tha not too well known nortbsrn areas of thw province, aa wwll aa in the Kootenay district, which has produced the larger* portloo of Canada'* total lead output to date. Interesting occurr.ooe# have recently been discovered la that vast, unexplored, untracked, northland of our* known as the North Boat Territories. Intensive prospecting, particularly for base metals, is a comparatively recast dcrtlopount In this art* and nobody knows definitely what, or has much, metal value* arc locked up In this tremendous area of rock aid water# Transportation Is, and probnMy always will be, a major difficulty Is the future development of this vast untracked wUdernaM. In Canada, as with the lead Industry throughout tha rest of the world, no major development* In process are In eight othar than Improved materials handling, more mechanisation, and general betterment of work ing condition*. Although talk of construction of a lead smelter la Eastern Canada Is revived from time to time, I know of no concrete proposal for any substantial lucreas. la lead reduction plant eapacl^r How for a brief survey of acme of the problots confronting the lead Industry In Canada. Host of these are net confined to tha Industry la sy country aloac, but are coaeon to all of u*. first, there la the question of supply. Oeologiata have estimated, oa tha basis of known deposit* and with world consuaptloa at a rata of 1,600,000 tons par year, tha average level over tho past 2S years, that IfW| | j P ^ W ' ipiHf UIJ,||;I ;W| J H W>!|f s .wljt.!jp ijm mMl to'*r*#r1} LIA16217 ~ n -Tw,*<irr*,>,'*,l....... ~~~ 'Hfr^r-`mrrrtrshT' - n------ ^-*-'itTf)r*J-:~ -"''`ir* ^frlYiirianiiS J <I . 4i- I l : \ |there it only between }0 and 3S ytars supply la slgltt. At first (lanes ihat is not a very bright picture. Howevor, we in Canada, and I am sure ill of you hero, have a ouch more optimistic outlook* Xa 1 t the first place the known lead ore r**nri of 10 - 15 ywar* ago wurw substantially the icrao aa tho figure Just stated and probably will SI still bu about the ssae 10-15 years fro* no*, further, alUvxigh there have been no naw large finds of lead la recent years, undoubtedly am occurrences *111 be found* Additional supplies msy also be obtained at depths greater than are presently being mined and materials am classed as waste any eventually bo profitably converted into natal* To think otherwise would greatly under--atlaate the ability and in genuity of our exploration staffs, mialng e^lnwrs and metallurgists* e Tumins atm to Markets for lead, me faoe a problem at tho moment peculiar to Canadian producers. Tver sinoe Canada be cams an Important lead produocr wo could count on felling a substantial part of our production to the United Kingdom* This market nos, however, shoes very definite signs of slipping mainly because of currency restrictions. Recent developments Indicate that, notwithstanding the devaluation which occurred last fall, Britain's monetary dlffioul- tles oru fir free being solved* In fact, it is flt in sows quartos* that her position, if anything, is gradually deteriorating. In thin connection I cau. across an item recently which interested ns and which, I m sure, will be of interest to you* Last year Croat Britain exported chiefly to Egypt and India something in the neighbourhood of a tdlllon dollars worth of goods for which she received no payment. This means that the productive capacity of the country to that extent was withheld from teller earning channels and free channels of lnvmstasat which sight later ears dollars* In the fact, of this, our reaction naturally is to look to United States market*. I do not need to tell you that your country is no longer self-auffldont "1th regard to the supply of lead and other base no tala, Tran a long term point of view, your present normal demand can probably no longer be met from domestic sources and undoubtedly the demand for lead *111 increase and parallel your continued upward tr- nd in population and industrial expansion* Consequently, being adjacent to you and with excellent transportation facilities connecting our two countries, we, in Canada, feel that we can fill m portion of this gap between your deaand and supply with substantial advantages to both, Anong other obstacles to be overcome, of course, is your tariff. This, I roalloc, la a very contentious point and I aa 1a no position to say what your tariff policy should or should not be* However, I would like to leave this thought with you - to be assured that your Industrial demands for lead are fulfilled on terms and conditions not less favourable to your own canturn* re than to oonsimwrs in other countries, *'* to us to rly to gr*at extent on your 8upsort of 4 policy of fair international trade condition*. In other worts, we bellow* that from a long term via* of lead supply and demand, you have loss t* fear fras offerings at cheap foreign lead than you haws from an Inability to satisfy the probably increasing demands of year onusm Inf industry* b | f t fc  ^AHilhnf ini 1 unwifa ..... --- -*-- LIA16218 -------- -~- ' itajiarir'' in jpi|ib -|^n )p|ifflpgsisapi|wipiipapigaswta.a M,n,m Xo dlacuation of problwM confronting our Industry would bo ecmplate without tag* reference to taxation. While I aa not faaillar with your United States tiring tax laws and regulations I believe that the prceent Canadian tax law* aro eoavwhet aore favourable to tha aining Industry than la tha case In your oountry, In tha flrat plaoo* our regulations provide for a deduction of ono-thira of tha taxable lnnraao attributable to aining on account of depletion* While thil la a hirrlawaa and Boat weleaee allowance you can reedlly aaa froa tha Bare Mechanics of Uiw calculation that it provides such greater aariatance to tha opoie. ator with a large aargln of profit than it doea to tte higher ooat producer* Siailarlly, aa In your country, ecus political Intoroeta not too fanlllar with problena peculiar to Betal Mining are crltleltlaf thla allowanco aa axtendlng too great a benefit to the Industry* la recast years Canadian tax lave have also penaltted a deduction froa a a *e . -- UlAdOK lui. uaaa w* . a - - .. . a a MiVMliwa ax 1 - . a - . a ^*4>aw> /wan AH exploration and prospecting. Further, all new Bines, baa* aetal aa well aa y>ld, are exuapt froa Federal Xnccas Tax for a period of throo years froa the dqr on which they are deeaed to c o bs Into casstrclel production af or. or concentrate*. Uirlnj this period pre-productlou axpene.e not written off and depreciation can bo deferred until later with the result that la Boat casas one hundred percent of thuee write-offs can be elalaed against aubaoquent taxable lnecas. In addition, shareholdera of aiinlng etxpanlia are allowed to deduct aa depletion 10?, 151 or 20? of the dividends rteolved d.pending on the proportion of the Incat derived 9 fron adding Included In the corporations' total lncoaa* Furthar, la an attuapt to reduce double taxation an corporate profits, a recent indnid permits shareholders to deduct 10? of the net dividends received froa any corporation - nlning or otherwise* Even with thuso goneroua silo*. ~ anoea, however, a oaabined Provincial and Federal Inoot Tax rate of }S? on taxable Incone imposes a heavy burden on tha aiding Industry} particularly when added to Increasing property taxas and provincial taxes on Bin* output* For the past 20 years or more, corporate profits have boas the target of many politicians. Krhape part of thla la doe to aa laproper appreciation of vconcale facta - auch aorv likely It la Aaa to the oaac with which auch profits can be taxed plus the fact that soak th> oorporatlona* has beun and atill la a politically popular thcao. Any atudy of eooncwlea and business definitely Indicates that corporate Incowu tax la a real hnndlcap to progress* Tha law of dladnlshing returns applies to taxation just as auch as it doe# to tha pricing of goods - perhaps aorv so since there is less chanoe for an early correction. When a produet la priced out at the norket natural Incentive* in a froa and canpetltlvw enterprise tond to product an tarly Cornellon* However, idtaa governaents overprice tha cost of their services the prohimi beoauos bo t o oooplex and tha offsets say bo ccapoundud becaus* they aro aaskod for a time. Too high a tax burden tends to destroy its own eourcoa ty punallalng business sueeeas and rwoovlng lno-ntlvoa for new ventures and the growth of established industry. Oft-n this will becoao apparent too late, slnoe, ty that tlae, not only have tax roovlpta dlatlniahed but the Industrial ecooaay may havu bean seriously and Irreparably dxaoged. jmmm wrm 'wmm rmmamtm -f- pppipp p > p p i jp p | | p l.fHf ...... .... ... . LI A 16219 A However, beaus** of revenue noedt, both la your country *a well m k Ij v j , conpleU abondonaunt of corporate tax with it* double taxation feature doe* oot *pp**r f*a*l(sl* *t thl* tlae* Our Mjor fool for the Inaodlate future (bould, therefore, be continued educa tion of joTer.TS.nU and the public with thu problea* peculiar to the inlng Induatry and a oonatant endeavour to co-ordlnato corporate Incaest tax with poraooal lncaae tax oo that they can be retarded as eanpllaontary porta of our tax atructuroa not eeparate entitlM aa at proMot* In the lattor part of the fcreeolnt I have attempted to outline briefly Km of tho probleas eotsfrootlnj the lead prtvbiclnc Induatry In Canada* lloet of tho, with Tarlatloae of course, are eoam to the United State* lead wining Induatry a* will* In both countries i ~ A41 re* '-- S * 4~ --4 U JU, ' 1 and International probltas and pollelrs* In view of thl* th.ro 1* ss IncroMing Undwocy In *oau quarter* of both your country and Nine to feel that the*c problta* ihould h. aalwd ty IncreMed governednt participation and In tceo oaaca porhap* even a nauaptloo of k m fora of govcrmuntal controls* On the other hand, we. In thu lead induatry in Canada foil, and I aa *urv that all of you h*n. will agree, that our problja* can b*at bo aolvud Iqr Individual and collective actlaa within tho Induatry itself working in a free and copctltlTw economy. 1 I u mum