Ring of Fire mining may not benefit First Nations as hoped

Internal memo from Aboriginal Affairs paints troubling picture

By David McKie, CBC News - Jun 27, 2013 5:13 PM ET The mineral-rich area known as the Ring of Fire is controversial among environmentalists, First Nations and many communities who would be affected by the large-scale building of infrastructure and possibly decades of mining. (CBC)

Northern Ontario is poised to become a mining mecca for its billions of dollars in chrome, copper, nickel and platinum deposits, but First Nations communities must overcome many social and economic hurdles if they hope to derive economic benefit.

That stark assessment is contained in a briefing note to the aboriginal affairs and northern development minister obtained by CBC's Power & Politics through the Access to Information Act.

"First Nations in the Ring of Fire are some of the most socioeconomically disadvantaged communities in all of Canada," reads the Feb. 4, 2013, briefing note.

"Chronic housing shortages, low education outcomes and lack of access to clean drinking water jeopardize the ability of local First Nations to benefit from the significant economic, employment and business development opportunities associated with the Ring of Fire developments."

IN FULL | Read the Aboriginal Affairs Ring of Fire briefing

The Ring of Fire is the name for a 5,000-square kilometre area in northern Ontario's James Bay Lowlands rich in nickel, copper, platinum and chromite, a key ingredient in stainless steel.

'Once-in-a-lifetime opportunity'

The federal government estimates the mineral content is worth between $30 billion to $50 billion and will create up to 5,000 direct and indirect jobs.

Ontario's Northern Development, Mines and Forestry Minister Michael Gravelle called the region "home to one of the most promising mineral development opportunities in Ontario in more than a century."

For its part, the federal government has invested a lot of political capital in what it calls "responsible resource development."

Tony Clement, the minister responsible for the Ring of Fire initiative, told a group of Ontario businessmen in March that the Ring of Fire represents a "once-in-a-life opportunity to create jobs and generate growth and long-term prosperity for northern Ontario and the nation."

Wealth could bring problems

How much of that prosperity will be shared by the nine First Nations involved in negotiations with Cliff Natural Resources and Noront Resources is a nagging question to which there are few clear answers.

Although the Aboriginal Affairs briefing note also stresses the steps federal departments such as Natural Resources Canada and Health Canada must take to help aboriginal communities benefit from the economic development, there are many obstacles to success.

That's one of the reasons why soon-to-be retired Liberal MP Bob Rae is helping the communities negotiate a deal.

MORE | Rae to lead First Nations in Ring of Fire negotiations

"Financial capacity also needs to be developed," says the briefing note's assessment, "as communities and individuals may eventually be faced with an influx of wealth that can exacerbate existing socioeconomic conditions if not properly managed."

Stark as it may be, the assessment comes as no surprise to Les Louttit, deputy grand chief of the Nishnawbe Aski Nation, the group that represents the nine communities attempting to cut a deal with the mining companies poised to begin operating within the next two to three years.

Les Louttit, deputy grand chief of the Nishnawbe Aski Nation, says there's little time to train locals in order to take advantage of construction.

"Well, they're serious [problems] because they've been neglected for so many decades," Louttit told CBC News.

"For instance, high school and post-secondary education, there's been a gap there for years. You talk about skills training. How are you going to educate and develop skills training within a period of two years in order to take advantage of construction?"

Despite the problems identified in the briefing note, there will be a deal, or impact benefit agreement, as the constitution forces the two companies to negotiate with the nine communities.

Those agreements must include certain assurances, including guarantees that a certain number of jobs will go to First Nations workers.

As the briefing note puts it, "The duty to consult and accommodate follows from Section 35 of the Constitution Act, 1982, and the Crown's duty to deal honourably with aboriginal peoples."

Agreements not always met

Past experience, however, has shown there can be a gap between these agreements and reality.

The lack of access to an educated and motivated aboriginal workforce has forced companies to fly in workers, said Anja Jeffrey, director of the Centre for the North at the Conference Board of Canada.

"I think industry is at the end of their rope," she said.

"If you talk to big mining companies like Agnico-Eagle in Nunavut, they have to hire 40 per cent Inuit workers. It's in their impact benefit agreement. Can they do it? No. Why can they not do it? Because the Inuit population around Baker Lake is simply not motivated to work in the mine.

MORE | Nunavut signs deal with mining company

"So what happens? The company flies in people on a two-week rotational basis. Does that create any economic prosperity in the region? No. Does that help the region? Does it lift them out of poverty? No. So something needs to be done to create that balance."

This potential scenario also concerns Louttit, who said the federal government should have started years ago to tackle problems such as the 70 per cent high school dropout rate in the communities and lack of job skills identified in the Aboriginal Affairs briefing notes.

Lessons from Attawapiskat

Louttit said the situation in Attawapiskat (which isn't part of the Ring of Fire) also provides valuable lessons learned.

The First Nation signed an impact benefit agreement with De Beers in 2005, but the community has yet to reap substantial benefits from the Victor mine, which has reached the halfway point in its projected lifespan.

MORE | First Nations must 'learn from' De Beers deal

Louttit said that by the time both sides tackled the thorny issues of education and trade, construction had already begun. The deal came too late.

"In that case they should have [reached a deal on education] five or six years before in anticipation of the construction of a mine that was going to generate all these jobs," he said.

Treasury Board President Tony Clement is the federal government's point person on the Ring of Fire.

In an emailed response on behalf of Tony Clement, the lead federal minister for the Ring of Fire initiative, a spokesperson wrote, "Since being named the lead minister on the Ring of Fire, I have met with the leaders of the Matawa First Nations to discuss how their communities can benefit and participate in this development and I plan to visit their communities in the near future.

"Our government will continue to work in collaboration with First Nations, industry and other levels of government to support the development of this generational opportunity, which has the potential to create significant jobs and growth throughout northern Ontario."

Jeffrey said it's fine to set up meetings, but it's even more important for the government to decide which socioeconomic issues should be tackled first.

To date, she said, she has seen little evidence of that.

Aboriginal Affairs' Ring of Fire briefing note.