Ontario to axe early-stage red tape, mining minister says

Ontario is preparing legislation this year to slash red tape on early-stage projects as it shifts its minerals strategy towards defence metals and backs Toronto’s bid to host a Nato bank, Energy and Mining Minister Stephen Lecce said in an interview.

The Conservative majority government intends to pass new laws this autumn. It wants to expand on the fast-tracking it started with major projects last year, while strengthening Ontario’s position as a major metals trade partner during Ottawa and Washington’s review starting this month of the Canada-United-States-Mexico Agreement (CUSMA).

“Our plan is for a large-scale legislative package in the fall that’s going to help really catalyze private investment confidence and reduce the timelines, all of which is in the national interest,” Lecce said by phone in late April. “We still face very real threats to our economy and our sovereignty given the ongoing dispute with America.”

Ontario, which the Fraser Institute ranked second to Nevada this year among the world’s best mining jurisdictions, is betting on North America’s second-largest financial centre, Toronto, to win over Nato decision-makers as the site for the Defence, Security and Resilience Bank. As members of the alliance scramble to transform military spending amid two regional wars, the multilateral financial institution is to start next year. It’s also when the province’s new minerals strategy is due.

Defence angle

The province’s case is boosted by statistics such as hosting half the country’s manufacturing, 36% of its defence employment, and 900 defence-capable companies, the minister said. Of course, Toronto vies with Sydney as the world’s top mining finance capital with 40% of the world’s public mining companies listed on the TSX and about half of the industry’s capital raised through the exchange, he added.

“We are uniquely positioned to mobilize public and private capital to help finance our defence expansions for our alliance and to build resilient supply chains that are not depending on the likes of Communist China or Russia or other geopolitical adversaries,” Lecce said. “We are supporting this bid enthusiastically.”

The province first said in March it’s shifting its mineral strategy away from electric vehicles after several battery plant projects stalled. Honda’s roughly C$15 billion EV and battery complex was postponed by about two years to around 2030; the C$5 billion LG Energy Solution NextStar plant in Windsor has been restructured after a brief halt when Stellantis pulled out; and Volkswagen’s PowerCo plant in St. Thomas is progressing more slowly than initially envisioned.

Separate protocols

Cars are a big part of the Ontario-US cross border trade, with steel, aluminum and auto sector agreements figuring highly in the CUSMA review. US Trade Representative Jamieson Greer has said a deal won’t likely be done by a July 1 deadline, and there will need to be separate protocols on items specific to Mexico and Canada.

Those CUSMA-linked discussions are an opportunity for Canada to negotiate lower tariffs on steel, aluminum, autos and softwood lumber, Dominic LeBlanc, the federal Minister Responsible for Canada-US Trade, said in late April.

Lecce, who was part of a Canadian delegation to Washington in April, said the key component for Ontario mining is ensuring local processing, while promoting the concept of working together to weaken China’s stranglehold on processing across so much of the industry.

“Our priority when it comes to minerals is to truly end the ripping and shipping of those resources by processing more at home,” he said. “Of course, nickel is a prime case study where you know we provide roughly 50% of nickel that goes into the US.

“We went to the US, met with one of the national security advisers to the president on critical minerals to emphasize our value proposition that we are moving with unprecedented speed to build mines, faster transmission lines, roads to Ring of Fire, cut permitting timelines by half and take an aggressive – in fact, I used the word hawkish – approach to responsible resource development, and I think we caught the Americans, we got their attention.”

Definitions

Canadian negotiators can deflate concerns that the US would seek to recast definitions for processing or mineral origins by emphasizing Ontario’s mineral wealth, Lecce said. And that Canada has trading options, he stressed.

“My message to the Americans is, ‘if you want access to our critical minerals and rare earths, for which we have among the largest bounty on earth, then we need to create some stability by getting this CUSMA review completed’. One follows the other.

“You could have access to the most ethically sourced resources on Earth, low cost, low carbon, democratic and reliable, or we will find alternate markets. And I did alert them to the fact that the Asia-Pacific and Europe are knocking on our door.”

Lecce’s message is simple: “We mean business, we’re open for business, and we’re not going to slow down” as it applies to the trade talks as well as for quickening permits for earlier-stage mining projects.

The proposed bill would build on the province’s One Project, One Process program – one of the first announced across the country last year. It reduces duplication on permits across provincial and federal levels while pushing final OKs for advanced developments to enter production.

That program already has Frontier Lithium’s (TSXV: FL) PAK, Canada Nickel’s (TSXV: CNC) $2 billion capex Crawford and Kinross Gold’s (TSX: K; NYSE: KGC) Great Bear. More projects are likely to be added, but first some need to start as mines and others need to advance in their development.

“We want to make sure that we reduce permit timelines at the early exploration, advanced exploration stage, and of course, for every active mine today that is looking to expand,” he said. “I’m committed, and our premier is committed, to slashing the red tape for them as well.”