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A new report from the Northern Policy Institute (NPI) is a mouthful — The Mining Industry in Northwestern Ontario: An Analysis of Recent Developments and a Strategy for Success. But it echoes what industry stakeholders have been saying for years: Ontario is losing revenue and jobs as promising mining projects go undeveloped.
The report, authored by Karl Skogstad and Ayman Alahmar, focuses on nine projects in northwestern Ontario that, for varying reasons, remain stalled at different stages of development.
Skogstad acknowledged the cycle is currently in a downturn, but said that problems can be addressed now so the province is ready when the cycle turns around.
“(The downturn is) unfortunate for the industry, but we know that the prices will go up again,” said Skogstad, a postdoctoral fellow in economics at Lakehead University in Thunder Bay. “So, it’s not that these projects aren’t viable ever; it’s just that they’re not viable now.”
Skogstad said now is actually a wise time to make an investment, since interest rates are low and it’s a good time to borrow money to invest in infrastructure, especially since the mineral resource isn’t going anywhere.
In the case of the Ring of Fire, particularly, Skogstad suggested the federal and provincial governments invest in energy and transportation infrastructure now when there can be a benefit to nearby First Nation communities.
“It’s not that the road’s just going to a single future resource development,” he said. “It’s that we have an opportunity to do some nation-building here to start improving the economic conditions in those communities, and as a positive spinoff of that, we’re ready to go when resource prices cycle high.”
Another of the report’s observations is that it just takes too long for a mine’s development, from start to finish.
Environmental assessments can take years to complete, and stakeholders frequently request more time to become acquainted with the details of a project.
Skogstad believes environmental protection and community engagement are necessary for development, but said projects could start taking even longer to get online if the process isn’t sped up.
He suggests hiring consultants to help educate First Nation communities on the mining projects so they feel properly informed.
“What we can do is provide resources to bring in consultants that they trust that can say we have the human capital to understand this, we have the education and training to understand what that means and maybe can explain that to these communities,” Skogstad said.
The economist also believes the recent Supreme Court rulings that enforce the duty to consult and accommodate First Nations interests have created ambiguity around property rights that needs to be clarified by the province.
“I think we’re at the point now that the government needs to make new legislation to make it clear who has the property rights,” Skogstad said.
“Are mining firms allowed to operate and build mines over the objections of the Aboriginal and even non-Aboriginal people in the region? Or do they have to have something in writing, or some agreement that clearly states that you have approval for this?”
Because traditional Indigenous lands can encompass a wide swath of land, mining firms are often unsure of if, or where, they can explore, or who to speak with to start the process moving. The ambiguity creates unfavourable conditions for investors.
“If I’m an investor, do I want to invest in a mining firm that might be caught up in a legal battle and all the profits dissipated?” he said. “You need clarity, because for me, it’s simple economics.”
There are plenty of opportunities to invest in mining around the world, and every moment Ontario lags in addressing these issues costs the province money.
“I’m hoping what this report is going to show is the lack of action is coming at a cost now,” Skogstad said. “It’s not hypothetically; these projects have stalled because of these issues that we’ve pointed out.”
