Can Ontario unlock the mineral riches of the ‘Ring of Fire’
The mineral-rich area in remote Northwestern Ontario known as the ‘Ring of Fire’ has recently received a great deal of attention from the Ontario Provincial and Canadian Federal governments. The project is valued to bring $60-$120 billion in economic benefits to Ontario, and particularly some of the poorest areas of the Province. Rich in chromite, nickel and gold, the Ring of Fire is considered to be a mining jackpot for the province; however, significant infrastructure developments are needed in order for resources to be extracted.
Political squabbling between the federal and provincial governments has obstructed mining development in the region for years. Ontario Premier Kathleen Wynne recently called upon the federal government to help pay for the infrastructure, which, according to Wynne, will cost approximately $1 billion for industrial infrastructure and $1.25 billion for all-season roads needed to connect all Ring of Fire communities. Wynne says Ontario would contribute a fair share of the cost of the infrastructure, but the need is large, it would need federal matching funds. The Liberal premier has repeatedly expressed frustration with what she termed a lack of engagement by a federal Conservative government that has strongly supported resource developments elsewhere in Canada—particularly Alberta’s oil sands.
In recent years, the Canadian Federal Government has contributed substantially to large infrastructure projects throughout the country. As Premier Wynne points out that the federal government has poured more than $500 million into the fossil fuel sector, $130 million to help build a transmission line in the B.C. and more than $6 billion in a federal loan guarantee for a hydroelectric project in Labrador.
Though mineral development is primarily a provincial responsibility, an initially reluctant Federal government has changed course and recently agreed to collaborate on development. In early December, Prime Minister Harper and Premier Wynn had a productive discussion, which resulted in the agreement that any investment by either level of government must represent a public benefit, including for First Nations. Although the agreement was a positive change in tone, no firm deal has been reached on how development would proceed.
In addition to political quarrelling, much of the difficulty has also come from the need to ensure the area’s aboriginal communities support any development on traditional lands. The region’s Matawa First Nations have hired former federal Liberal MP Bob Rae, also a former Ontario premier, to negotiate with the Province on their behalf. The First Nations communities have made clear that they are not against any development in the region, but are primarily concerned with the environmental degradation associated with mining practices. The remote Northern Ontario areas where the projects are situated are desolate places of unemployment, poverty and horrible living conditions. For First Nation communities, the opportunity is expected to provide many benefits if carried out in a sustainable and responsible manner.
Although the Provincial and Federal government’s meeting reflects a willingness to be more collaborative, other logistical and labor issues present challenges to unlocking the riches of the Province. Firstly, the permafrost landscape of Northern Ontario creates many complications. It is believed that even if funding is secured, infrastructure development would proceed at a slow rate due to the areas poor climate conditions and logistic complications. Secondly, even if infrastructure is developed, the negotiation of an impact benefit agreement with local aboriginals may also prove to be problematic. As in past situations, the lack of access to an educated and skilled workforce in northern aboriginal communities has forced firms to fly in workers on a rotational basis.
Overall, political uncertainty, logistic complications and labor agreements are all challenges that face development in the Ring of Fire region. Whether progress will ensue depends largely on the Federal government’s willingness to step up and contribute to the Ontario government’s development plans.
Article written by Richard Vitari—University of Toronto Master of Global Affairs Candidate 2015