Ontario’s Finance Minister is calling on Ottawa to match $1-billion in investment in the Ring of Fire critical minerals sector in next week’s federal budget, urging Canada to send a message to visiting U.S. President Joe Biden that the province is a welcome place to invest in the mining industry.
Finance Minister Peter Bethlenfalvy, who released his $204.7-billion budget Thursday, said Ontario is looking to further collaborate with the federal government to develop the country’s critical minerals sector and promote it abroad. He asked federal Finance Minister Chrystia Freeland to match the province’s nearly $1-billion commitment to the Ring of Fire district in the province’s far north. That money, his government says, is being used to build all-season roads, broadband connectivity and provide “community support.”
“We put in a billion dollars of capital. We want not only the federal government to match that – but not just the dollars. Work with us on actually getting the permitting, the approvals and sending a message to President Biden and the rest of the world that Canada and Ontario in particular is a great place to invest capital,” Mr. Bethlenfalvy said at a postbudget announcement in Toronto on Friday.
“We mine minerals ethically, responsibly, but reliably. They’re right here in North America as the world changes around us.”
Mr. Bethlenfalvy said the province’s critical minerals sector is at the core of the government’s plan to build more electric vehicles. Ontario and Ottawa recently collaborated on a deal that will see Volkswagen open its first battery factory outside of Europe in St. Thomas, Ont., after considering locations in both Canada and the United States. Details of the planned investment, including the dollar amount and production capacity, have not yet been released.
Mr. Biden spent two days in Ottawa on his first official visit as President to Canada this week. In a joint statement on Friday, Mr. Biden and Prime Minister Justin Trudeau said Canada and the U.S. will work together “to create a strong, environmentally responsible and resilient North American critical minerals supply chain.”
Ottawa has signalled that is it considering a major new round of spending on critical minerals that could help Canada become more competitive with the United States. As part of Mr. Biden’s US$440-billion Inflation Reduction Act, the U.S. Department of Energy last year earmarked US$40-billion in loan guarantees for North American critical minerals companies, with some Canadian miners among the expected recipients.
While the Canadian federal government has recently drastically increased its spending on critical minerals, the amounts pale in comparison. In last year’s federal budget, Ottawa committed to $3.8-billion over eight years. Adrienne Vaupshas, a spokesperson for Ms. Freeland, said on Friday that next week’s budget “will include a serious investment in Canadians—in good jobs, in more vibrant communities, and in a new era of economic prosperity that we will build together, including with Indigenous partners.”
To develop Ontario’s Ring of Fire, we must develop trust with First Nations
The Ontario government unveiled on Thursday what Mr. Bethlenfalvy called a “prudent” budget – one that assumes next to no economic growth this year, but still pledges to balance the books by the 2024-25 fiscal year. It includes a new 10-per-cent refundable corporate income tax credit of a maximum $2-million a year for manufacturing companies that spend up to $20-million on buildings, machinery and equipment. It will be worth $780-million over three years for manufacturers.
The Canadian Council of Innovators, a business association led by 150 technology chief executive officers, said it is a challenging time for the national tech sector, as inflation and tight capital markets create significant headwinds for high-growth companies.
Dana O’Born, vice-president strategy and advocacy, said that while the new manufacturing tax credit will support the tangible capital investments made by businesses, “it would have been a game-changer for Ontario technology companies if businesses could also claim the tax credit for expenditures into Ontario-made cybersecurity, digital services and supply chain technologies.”
The government is “very supportive” of the tech sector and will continue to have conversations with it, Mr. Bethlenfalvy said Friday. He added that he had spoken with Ms. Freeland, “to ensure that we continue to provide capital and support to the tech companies.”
With a report from Jeff Gray in Toronto