Queen's Park: Ontario’s economic future out of its hands as Ring of Fire languishes

From beaver pelts to the oilsands, Canada’s economy has benefited from a blessed treasure trove of resources.

Why else would anyone slog through dense bush while fighting mosquitoes, navigate huge waterways, and pound through granite but for those rich rewards?
Toronto’s financial district owes much to mining, forestry, and energy as a quick glance at the Toronto Stock Exchange attests. Look west and the British Columbia, Alberta, and Saskatchewan economies are booming while Ontario’s moribund manufacturing sector struggles with a petro dollar that puts mainstays like the auto makers on alert as labour costs rise.

It wasn’t always like this, of course. Hooked up to cheap hydro electric power, Ontario was the engine that drove the nation. But today, it languishes as a have-not province in Confederation while hamstrung by deficits and a debt that will hover like a thundercloud over successive governments for generations.

What Ontario needs today is money. It needs lots of it and it can’t come soon enough. But the future of Ontario is mired in its past as well as lingering questions over aboriginal rights and which land claims are valid.

Three years ago, then-premier Dalton McGuinty naively bet on a five-year plan to open northern Ontario to mining and develop the Ring of Fire in a massive area the size of Prince Edward Island in the sparse James Bay lowlands 540 kilometres northeast of Thunder Bay, Ont. As they say, it’s not the middle of nowhere, but you can see it from there.

The prize is chromite, something that’s vital to the production of stainless steel. There’s also nickel, platinum, copper, and maybe other precious metals. In all, it’s worth $120 billion. It’s cash that will flow to northern Ontario, create jobs, and sustain communities, many of them aboriginal. The proposal would also generate taxes all the way back down to Queen’s Park’s coffers.

Predictably, with that much money on the table, the fights soon began. Junior exploration companies battled with their larger counterparts that launched hostile takeovers and Ontario Mining Act reviews over claim stakes. We also had mayors arguing over whose city should get the $1.8-billion smelter (it went to Sudbury, Ont., over Thunder Bay) while First Nations want not just consultations but a veto as they complain that everything is moving too fast.

There’s also a pending judicial review over the format of the environmental assessment and an Ontario Superior court ruling severing one First Nation’s lands from the development area because it would cause “irreparable harm to their culture” while others like the Marten Falls First Nation welcome the opportunity and have worked directly with the exploration companies.

There are more fights over whether building haulage routes by rail for $2 billion is a better idea than roads at $600 million, concerns about the boreal forest and wildlife habitat, and, of course, the usual blockades.

The Ring of Fire has been dubbed Ontario’s tarsands, a double-edged moniker that could suggest an environmental disaster in the making or a golden opportunity to restore the province to economic glory.

But instead of shovels in the ground, we more predictably have lawyers at the tables. Former federal Liberal interim leader and past Ontario premier Bob Rae stepped down as MP last month to devote his time to his role as a representative of the Matawa First Nations and nine native governments. Last week, retired Supreme Court of Canada justice Frank Iacobucci became Ontario’s lead negotiator.

Their mandate is to ensure agreement on key issues related to environmental protection and monitoring, regional infrastructure planning and development, resource revenue sharing, and social and economic supports before any mining activity goes ahead.

Clearly, five years was never going to be enough time to get a project of this size off the ground. The landscape has also changed since then as First Nations increasingly assert claims over lands where they hold fishing and hunting rights.

Frustrated by a process it perhaps initially thought would move quickly given the government’s initial enthusiasm and wary of softening commodity prices, Cliff Natural Resources Inc. announced last month it was suspending its timelines and was now looking to 2016 or later to start operations. However, Noront Resources Ltd. says it will stay the course regardless of the ongoing quagmire.

Mining is a vital industry in Ontario. It’s the biggest private-sector employer of aboriginals and provides, overall, 27,000 highly paid jobs and another 50,000 jobs in processing.

Both the federal and Ontario governments want this project to go ahead as quickly as possible, but the fate of the Ring of Fire and the jobs and revenues attached to it now rests in the hands of Ontario’s First Nations.

With $120 billion at stake, however, the parties aren’t going to resolve the issue any time soon. It’s a depressing example of how so much of Canada’s future resource development, extraction, and marketing has yet to escape our history.

Like Alberta, Ontario’s economic future is out of its hands.

Ian Harvey has been a journalist for 35 years writing about a diverse range of issues including legal and political affairs. His e-mail address is [email protected].

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