Ontario Chamber of Commerce calls for an improved relationship with First Nations

December 16, 2015

miningBy Joey Krackle

The recent Ontario Chamber of Commerce (OCC) report entitled, Digging Deeper recommends an improved relationship between Ontario’s First Nations and government.

Mining is the largest industry in Northern Ontario. Currently, there are over 40 mines in operation in Ontario. Last year, these sites collectively produced $11 billion worth of mineral product, more than any other province or territory in Canada. According to an analysis released by the Ontario Mining Association, each additional $1 billion of mineral production in Ontario contributes $858 million to the province’s GDP and creates nearly 4,500 jobs.

In Ontario, Aboriginal employment accounts for 9.7 percent of total mining jobs. Ontario’s mining sector is much more diverse than mineral production as many businesses in Ontario provide supply and services to mining companies. In 2011, over 900 supply and services companies to mining collectively contributed over $6 billion to the province’s GDP, employed over 68,000 people, and generated nearly $1.5 billion in tax revenue.

However, this report states that in order to remain competitive on the world stage, the mining sector requires assistance from both the federal and Ontario government to meet rising input costs and regulatory challenges. The Ontario Chamber of Commerce report makes nine recommendations to meet these challenges and looks forward to Ontario’s new mining strategy scheduled to be released soon.

Their first recommendation calls for governments to boost infrastructure spending in Northern Ontario and to coordinate infrastructure planning with Aboriginal and northern interests and to broaden the mandate of the Ring of Fire Infrastructure Development Corporation so that it could carry out this task.   The report makes this recommendation so that the Ring of Fire development could proceed more rapidly. KWG Resources announced recently that has signed a deal with China Rail to conduct a feasibility study to look at building a transportation corridor to handle ore and other mining operations in the Ring Of Fire Development..

Their second recommendation requested that Ontario address the issue of clarity in regulatory uncertainty in the area of increased electricity input costs and Aboriginal consultation. Their recommendation requests that Ontario “provide a single list indicating which Aboriginal communities a mining company needs to consult when pursuing development of a particular project.” While recognizes that respectful and mutually beneficial relationships with Aboriginal communities are essential to the success of the mining industry, it strongly urges government to coordinate and streamline its consultation process as the current process makes it hard to predict when consultations will end.

This report points out that the Political Accord between the Chiefs of Ontario and Ontario to achieve a bilateral relationship is a positive step in direction towards increased clarity and states at least 75 successful agreements have been negotiated between mining companies and Aboriginals. This report emphasizes that the agreements at the Musselwhite and Detour Gold mines are recognized as best practices. The Musselwhite Agreement was negotiated between the First Nations of North Caribou Lake, Cat Lake, Kingfisher Lake, and Wunnumin Lake, as well as the Shibogama First Nations Council, the Windigo First Nations Council and the federal and provincial governments.   This Agreement provided for resource revenue sharing based on mine production, education, training, employment and business related services to be to be provided and facilitated by Goldcorp. By 2015, 10% of this mine’s employment came from signatories or affiliate communities to the agreement and more than 20% from First Nations. Three public liaison committees were formed under the agreement to report on mine progress, receive community feedback and hear concerns directly from local citizens on environmental, social and economic matters.

The Detour Gold Goldcorp Mine agreement included capacity funding for three First Nations (Moose Cree, Taykwa Tagamou, and Wahgoshig First Nations) and the Métis Nation of Ontario to study and identify their interests, positions, and concerns respecting the mine’s feasibility, potential financial returns, and environmental assessment documentation. From an informed position, the parties were able to successfully negotiate Impact Benefit Agreements (IBAs) to formalize economic, environmental protection measures and community benefits.

The third recommendation requests the federal and provincial governments to create a resource revenue- sharing framework to provide certainty surrounding the benefits that these communities will gain from mineral resource development. The report asserts: “The the mining community needs government to proactively develop a policy that addresses its responsibility for accommodating aboriginal and treaty rights. “

The Anishinabek Nation had advocated for resource revenue sharing/resource benefit sharing with the Government of Ontario. Chief Ed Wawia of Red Rock First Nation indicated the importance of resource revenue sharing/resource benefit sharing to First Nations: “Our treaty and inherent Aboriginal rights are enshrined in Section 35 of our Constitution and I look forward to reaching a successful agreement with government.”

The report makes six additional recommendations calling for both federal and provincial governments to act in the following areas to:

  • Increase e the Ontario Focused Flow-through Share Tax Credit from five percent to 20 percent to bring it in line with other provinces;
  • Extend the availability of the federal Mineral Exploration Tax Credit (METC) for three years and create an enhanced METC for remote projects;
  • Commit to maintaining current provincial mining tax rates for remote, non-remote, and diamond mining operation;
  • Increase Ontario’s investment in mining research and innovation for three years to sustain mining innovation activity in the province through the downturn;
  • Conduct or commission a benchmarking study to better understand Ontario’s attractiveness as a mining jurisdiction relative to its competitors; and
  • Leverage the demand for Ontario mining expertise to drive growth. As a start, government and industry should collaborate to create new business opportunities via the industry’s global networks.