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Feds invite Ontario infrastructure application on Ring of Fire development

OTTAWA - Despite an absence of new funding in this year's federal budget, the Conservative government says it still fully supports development of the Ring of Fire mining region in northwestern Ontario.

Greg Rickford, the federal minister responsible for the file, says it's up to Ontario's provincial government to apply for infrastructure funding under the new Building Canada fund announced last week.

"We have always been clear that the Build Canada fund contemplates these large-scale, economic development-based, responsible resource development projects," Rickford said in an interview. "That's what it's intended to do."

"But those resources have to align with the priorities of the province — so to the extent that the province says 'this is our major file, this is where we want considerable resources to go into,' ... then we can do that."

That could eat up a huge portion of Ontario's $2.4-billion share of the 10-year federal fund.

"That's for Queen's Park to sort out," said Rickford.

Both levels of government have long touted the potential of the Ring of Fire, which is rich in chromite used to make stainless steel as well as other minerals, including nickel and copper.

The project, however, has been mired in political sniping between Queen's Park and Ottawa.

The provincial Liberals have already said they'd like to see the federal government pay for about half the estimated $2 billion in infrastructure they say is needed to develop the remote, roadless Ring of Fire.

When last week's tight-fisted federal budget was tabled, projecting a surplus for next year, officials from Sudbury in northern Ontario to downtown Toronto groused about the absence of dedicated funding for the project.

"It's a huge opportunity for the province, much like the oil sands was an opportunity for Alberta," Premier Kathleen Wynne told CBC's The Current this week.

"And billions of dollars have gone into the oil sands in Alberta and yet the federal government doesn't seem to see fit to invest in the Ring of Fire in Ontario."

Rickford strongly disputes Wynne's claim.

"A great deal of our investments in Ring of Fire have already occurred in previous budgets that we've presented," he said, and infrastructure funds are there for the asking.

Rickford pointed to items such as a $16.4-million diesel electricity generating plant in Webequie First Nation that he says will help commercial development as well as residential power needs. The project was announced in February 2010 and a press release at the time made no mention of the Ring of Fire development.

Rickford also cited a $4.4 million federal contribution last August to the Nishnawbe Aski Development Fund that was "exclusively for Ring of Fire business capacity development."

FedNor, the federal regional development agency, has funded a Webequie First Nation project on "cultural mapping" that will assist in the environmental assessment of the Ring of Fire project.

There's also $5.9 million announced last summer to provide mining industry training for local First Nations.

"We understood almost two years ago that we had considerable resources going in and out of government departments across the federal government that needed to be focused on what benefits they were contributing to the Ring of Fire," said Rickford.

There remains debate over the best corridor into the mineral-rich region, and Rickford said he'd like to see a route that links First Nations communities and mining operations.

A proposal for a hugely expensive north-south road that would not link in nearby First Nations has become mired in legal battles, and in the meantime the developer of a proposed chromite mine at the end of the line has backed out.

Rickford says the access route "has the potential to be modified — and that's not a bad thing."

The federal government, said the MP for Kenora, Ont., is looking at 25 isolated First Nations communities in his riding alone, and a number of them "are in line with the proposed extraction sites in the Ring of Fire."

That suggests a cheaper east-west route that would link a nickel mine proposed by Noront Resources Ltd. (TSX:NOT) to the Trans-Canada Highway is on Ottawa's radar.

Rickford said the government doesn't want to see a big resource industry going ahead "where there's not the ability of the First Nations to drive to work from those communities."

There is also the question of revenue sharing for First Nations, and last summer Ontario appointed former Supreme Court justice Frank Iacobucci to lead the negotiations.

Bob Rae, the former interim federal Liberal leader and one-time NDP Ontario premier, is assisting a group of nine First Nations in the talks and says the are "making good progress."

"Once that's done and approved by the respective parties, then I think there will be an opportunity for everyone to see that there are very logical places for both the federal and provincial governments to participate," Rae said in an interview.

Rae said the Conservative government has created funds to deal with infrastructure — from roads to electricity to broadband — and "those are pretty crucial pieces of the puzzle for the communities."

In short, there are still many questions and hurdles to be cleared before the Ring of Fire development takes flight, and the Conservative government is insisting Ontario gets its ducks in line before seeking major federal dollars.

"I have met frequently with all stakeholders," said Rickford.

"None of them at any point in time have expressed a dissatisfaction with what the federal government is doing on the Ring of Fire. You can take that to the bank. I stand by it."

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