August 2014

One Ring of Fire approach to rule them all

Ontario’s development corporation plan criticized in new reports

By Andrew Reeves

Almost everyone with a stake in the Ring of Fire wants to see development in the region move ahead. But when it comes to determining how to do that, the consensus evaporates. Ontario Premier Kathleen Wynne has pledged to form a regional development corporation (Devco) to govern the Ring of Fire’s advancement within 60 days of taking office. But in recent weeks, alternative processes have been proposed that seek to put industry in the driver’s seat and help it take a more holistic approach towards environmental protection.

Last November, Ontario Northern Development and Mines Minister Michael Gravelle announced a solution to break the logjam that had seized the region, which his government boasts holds a known mineral potential of $60 billion. Prompted by infrastructure squabbles between rival miners, Gravelle became convinced of the need to create a process to hear from First Nations, industry and government on how to proceed.

The Liberals proposed a not-for-profit Devco, which the government would lead, to set the pace and tone of development in the Ring of Fire and bring disparate voices to the negotiating table. The Ontario government would have control over the design, construction, financing, operation and maintenance of all infrastructure built. Consulting firm Deloitte was brought aboard last February to begin work on a technical infrastructure report and handle the legalese of forming a new governance structure. Deloitte will also be there to act as a neutral, third-party resource for all stakeholders in the Devco in case tempers flare or disagreements persist.

Not everyone is pleased with the Liberals chosen governance model for the Ring of Fire, however. Former federal deputy transportation minister Nick Mulder penned a report for the Northern Policy Institute (NPI), released in mid-June, arguing that the Devco heavy a burden on taxpayers to accept risk and front the infrastructure costs. “Uncertain mineral markets, a growing provincial deficit… and unresolved aboriginal demands,” he said, are reason enough to bring greater private sector involvement into the Ring of Fire to share in decision-making, profit and risk.

Mulder’s preferred solution is a port authority model that brings stakeholders together into an independent communal body that appoints its own leadership, rather than the Ontario government choosing the governing body’s captain. The authority would see the marketplace, not the government, make decisions about how the region would develop and it would be responsible for generating financing, according to his report.

KWG Resources president Frank Smeenk is on board with Mulder’s plan. His company owns a 30 per cent stake in the Big Daddy chromite project. Shortly after the NPI paper was released, Smeenk applauded the port authority suggestion as a step towards bringing the federal government and Ontario in sync in the region, claiming in a release that a port authority might be “the most elegant means for their collaboration.”

Smeenk argued the NPI paper also supported draft legislation he released during Ontario’s recent election campaign, calling on all parties to support his Northland Development Corporation idea. This would merge authority over the region between industry, First Nations, northern mayors and the Ontario Northland Transportation Commission, the local rail service provider that Smeenk supports be­cause of his preference for rail infrastructure into the mining area, 540 kilometres north of Thunder Bay.

Alan Coutts, head of junior miner Noront Resources that leads the pack with its Eagle’s Nest nickel and copper project as the most advanced in the Ring of Fire, said his ambitions for how to govern the region are “pretty well-aligned” with the port authority model spelled out in Mulder’s paper. Although Coutts has been active in the ­government’s Devco talks to date, he pointed out that it was critical to get proper representation from industry, First Nations and government because they all have a stake in how the area develops. Industry is largely concerned about getting projects approved and operational in a timely manner, he said, so setting a steady pace for development under the Devco is priority one if that model persists.

Meanwhile, a joint report from the Wildlife Conservation Society and Ecojustice released in late-June claims the current planning framework for the Ring of Fire misses the forest for the trees. The report’s authors write that it is blind to cumulative ecological effects of mining development and fails to investigate what impact road building in one part of the region could have on caribou migration hundreds of kilometres away, for example.

Given the many environmental, economic and cultural impacts of mining, the authors call for a Regional Strategic Environmental Assessment (R-SEA) to take place before infrastructure decisions at the Devco are made. “Adopting an R-SEA planning process is a way of building consensus around where, when and in what form development is appropriate,” said co-author and conservation scientist Cheryl Chetkiewicz. Conducting an R-SEA is also compatible with a Devco making infrastructure decisions, said Ecojustice lawyer Anastasia Lintner: it would better coordinate what is built.

But undertaking an R-SEA would put the brakes on development, at least temporarily. Premier Wynne could be hesitant to slow the process to conduct a regional assessment after promising during the campaign to take swift action on forming the much-delayed Devco. Her government also made a $1 billion infrastructure commitment in the Ring of Fire in its defeated May budget, a promise Wynne resurrected during the campaign.

In late June, Gravelle reaffirmed the government’s commitment to the Devco model, though he welcomed alternative perspectives and suggestions.

Gerald Hatch built one of the world’s most successful mining and metallurgical engineering firms

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