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TABLE OF CONTENTS Jun 23 - 29, 2014 Volume 100 Number 19 - 0 comments

Editorial: Ring road of fire?

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By: John Cumming
2014-06-18

The surprisingly strong majority win by Ontario Premier Kathleen Wynne and her Liberal party in the provincial election in mid-June has given a boost to potential infrastructure development in the Ring of Fire chromite and base metals camp in northern Ontario.

On the campaign trail and in interviews after the big win, the premier and Finance Minister Charles Sousa spoke many times of the need for the provincial government to spend upwards of $1 billion to open up the camp and spur long-term economic growth in the province’s far north, particularly among the region’s nine First Nations communities.

This pro-Ring of Fire stance contrasted with the second-place Progressive Conservative Party, which promised cuts to the provincial budget, including an end to "corporate handouts" — additional corporate tax cuts notwithstanding.

Voters in the province had a choice between a smaller, leaner government and an activist, progressive one, and they voted en masse for the latter, to the benefit of those promoting Ring of Fire mining projects.

And so the timing was particularly good for a newly released think piece by Nick Mulder through Thunder Bay’s Northern Policy Institute that promotes an "airport–port transportation authority model" as the most applicable corporate body to oversee any new infrastructure into the Ring of Fire.

Based in Ottawa, Mulder is a former deputy minister of Transport Canada who was named to the Order of Canada in 1997, and is today a senior associate at Global Public Affairs.

In his report he argues that the airport–port authority model is the best route for the provincial government to take compared to a traditional crown corporation (what the government proposed in November 2013 for the Ring of Fire). This would be because under the airport–port authority model, the "onus and risks would be placed on all stakeholders and not just on the provincial government and taxpayers."

Under the Mulder proposal, all parties would have formal representation on the authority’s board, and this board — not government directly — would plan and procure facilities and services for road, rail, power and air, while sharing costs and risks with the private sector.

There’s no shortage of stakeholders beyond mining companies: The First Nations communities and the provincial government have each appointed lead negotiators; the Ontario government has a Ring of Fire Secretariat as part of its Ministry of Northern Development and Mines; and the federal government has its Interdepartmental Ministerial Steering Committee on the Ring of Fire, and its Department of Aboriginal Affairs has declared itself the lead department, though the federal regional development corporation for Northern Ontario (FedNor) also has an oar in the water.

But Mulder emphasizes that it may not be the "right time" for the provincial government to assume all the risks of a crown corporation in the Ring of Fire, given "uncertain mineral markets and prices, a growing provincial deficit and debt, unresolved First Nations issues and environmental assessments."

KWG Resources has been the mining company with the most enthusiastic response to the Mulder report. The proposal in many ways dovetails with the one it put forward earlier, which seeks to revive the Ontario Northland Transportation Commission so that it can oversee Ring of Fire development, with a focus on rail access rather than road.

KWG has sought more involvement from the federal government in developing the Ring of Fire, but the airport–port authority model allows for seats at the table for both provincial and federal governments.

The biggest player in the camp — Cleveland-based Cliffs Natural Resources — only had one sentence about the Ring of Fire in its latest letter to shareholders, saying that it was "indefinitely suspending spending on the Chromite project in Northern Ontario and preserving future value options for the asset should a government-backed infrastructure solution emerge."

Mulder’s 12-page report, which looks at the pros and cons of the Transportation Authority model since its adoption in Canada in the mid-nineties, is available at www.northernpolicy.ca.



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