Governments' Ring of Fire feud hurts First Nations and hampers business, Rae says

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Squabbling between the federal and provincial governments is getting in the way of companies trying to develop Northern Ontario's Ring of Fire mineral deposit and causing problems for the area's First Nations, says former premier Bob Rae, just days after a major mining company quit the area over delays.

Mr. Rae, who is representing the Matawa First Nations in negotiations with the province over the development of the region, delivered this warning Tuesday to a business crowd, including mining executives, at the Empire Club in Toronto.

Located about 500 kilometres north of Thunder Bay, the Ring of Fire contains an estimated $60-billion in minerals. But the region needs a massive amount of infrastructure – most crucially a road or rail line to ship the ore out – for large-scale mining to begin. The province is pushing the federal government to pick up half the tab.

"It is, to me, deeply troubling that the two governments still can't agree on who's responsible for what," Mr. Rae said. "This is challenging for First Nations. It's also challenging for companies that are trying to do business. We need to create some certainty."

Those challenges helped push Cliffs Natural Resources to suspend operations in the area last week. Mr. Rae sounded nonplussed about the company's decision. Asked whether negotiations between First Nations and the province should be accelerated to get development moving, he suggested it was more important to get the deal right.

"Minerals don't go stale, right? … The question is the right conditions, people with the right abilities in terms of the financial abilities and the right framework as far as the governments and First Nations are concerned," he told reporters after his speech. "We've all got to stick at it and not simply throw up our hands every time one company makes one decision or another."

But Cliffs's decision, which it had been hinting at for months, has certainly rattled others. Even before last week's announcement, the province rushed to show progress in the Ring of Fire, announcing it would set up a development corporation to build the necessary infrastructure. It also demanded Ottawa split the bill.

Ontario Premier Kathleen Wynne is pushing for a meeting with Prime Minister Stephen Harper. Northern Development Minister Michael Gravelle has spoken with Greg Rickford, the federal minister responsible for the Ring of Fire, on the phone, and is trying to schedule a face-to-face meeting.

"The federal government has, for some time now, spoken clearly about the Ring of Fire as a major resource development project that will create thousands of jobs and drive the economy," Mr. Gravelle said in a statement Tuesday. "We will aggressively pursue the financial involvement of the federal government until they acknowledge their responsibility to partner with the province and the other potential development corporation partners to back this massive economic development opportunity."

Mr. Rickford hinted Ottawa would be willing to kick in money to develop the region through its new infrastructure-building fund, under which municipalities and provinces can apply for grants to fund specific projects. But he criticized the province and suggested the region is mostly the provincial government's responsibility. "We also look forward to the province moving forward in a bit more of a collaborative way, especially as resource development is primarily a provincial jurisdiction," he said.

Despite the holdups, Mr. Rae insisted that negotiations are going well – First Nations met with the province last week and are expected to meet again next. He refused to put a time frame on the talks, and suggested such a process, even if it takes a while, is absolutely necessary for development to proceed.

"Partnership is not simply an option – it is actually a necessity," he said. "If people think that it's going to be possible to develop the far north of this province … without a full and effective partnership with those First Nations, if you think it's going to be possible to do it, in my opinion you're sadly mistaken."