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Northern think tank releases commentary addressing the Ring of Fire

September 1, 2014
by Graham Strong
In: News

Former Transport Canada official supports transportation authority model

Nick Mulder, who helped develop the airport/port authority model during his time at Transport Canada, says a similar economic development model could be applied to manage the Ring of Fire project.

Nick Mulder, who helped develop the airport/port authority model during his time at Transport Canada, says a similar economic development model could be applied to manage the Ring of Fire project.

Can the airport and port authority model be applied to infrastructure development for the Ring of Fire, as an alternative to a Crown corporation?

Nick Mulder, who spent 30 years in public service, including 15 years at Transport Canada, and helped develop the transportation authority model, believes so. The Northern Policy Institute (NPI) published his commentary, The Airport/Port Transportation Authority Model: Is It Applicable for Ontario’s Ring of Fire Mineral Development? in June, and featured Mulder in its first Speaker’s Breakfast in July.

Mulder argues that development in the Ring of Fire area should be at arm’s length from the government.

He writes that the transportation authority model is more advantageous than a Crown corporation because stakeholders, including mining companies, would be responsible for costs and planning – not taxpayers.

“If there is some form of Crown corporation, then the trouble is that all the risk will ultimately be assumed by the government, and that means taxpayers,” Mulder said during his breakfast speech in Thunder Bay. “If mineral prices drop and the funds aren’t there to pay for a road or a railroad and so on, that means taxpayers are on the hook.”

During his talk, Mulder offered as a cautionary tale the Dease Lake extension built by BC Rail, which was then a Crown corporation, to access copper and asbestos deposits. The extension was cancelled in 1977 before completion – but not before the province invested millions of dollars into the failed project.

In the transportation authority model, that wouldn’t happen, Mulder said. “The commercial interests that are involved and can benefit from [the Ring of Fire] would take a large part of risk.”

Citing the Port of Prince Rupert as an example of the transportation model, Mulder pointed out that the private sector, including CN Rail and container companies, invested three-quarters of the funding needed to expand the port’s container tonnage so it could better access markets in Asia.

“Some selective funding came from the province and from the federal government, but most of it came from private sector funding,” Mulder said.

However, the authority model cannot be directly translated to the Ring of Fire development project, he said.

“There have to be modifications… because the terrain is much bigger, the issues are more complicated, and there are a number of players involved,” Mulder said. The authority’s focus should be on the commercial needs of the mineral development and not the social and economic needs of area First Nations, which should be left to each community to determine, he said.

During the question-and-answer portion of the Speaker’s Breakfast, several people commented about the need to involve First Nations in the Ring of Fire development, including ensuring First Nations have direct economic benefits from mining activities on traditional territories.

The province has already taken note of Mulder’s commentary. Michael Gravelle, Minister of Northern Development and Mines, said he was concerned that Mulder based his paper on the assumption of a Crown corporation model since that decision had never been made. That aside, Gravelle said he was interested in and grateful for Mulder’s commentary, and that it will be part of what will inform the government along with other policy suggestions received.

In the Speech from the Throne on July 3, the Liberal government said it would establish a Ring of Fire development corporation within 60 days, and reaffirmed its $1 billion commitment for infrastructure. Gravelle said on July 14 that the government had not yet determined what form the development corporation will take, except to make clear that the province won’t be the sole decision maker in the project.

“I certainly feel that the province has an important leadership role to play, but we truly believe that the way we are going to make the decisions … will be through a partnership,” Gravelle said, adding that the partnership doesn’t necessarily need to be either a Crown corporation or transportation authority- type model.

“It needs to be a business mechanism where all partners will have a say in the decisions moving forward.”

Those partners include industry, First Nations, the province, and the federal government, he said. Mulder’s commentary is the first of many planned by the Northern Policy Institute (NPI), an independent “think tank” created by a $5 million Northern Ontario Heritage Fund Corporation (NOHFC) grant.

“We are set up as an independent entity to bring evidence to bear on policy decisions that impact the day-to-day lives of Ontarians,” said NPI founding president and CEO Charles Cirtwill. Topics for other currently commissioned papers include the minimum wage, the First Nations Education Act, and tracking GDP growth in sub-regions of Northern Ontario, he said.

Moving forward, the goal is for NPI to be a self-sufficient entity within five years, blending government funding with contributions from corporate sponsors and philanthropic organizations, with no single contributor providing more than 25 per cent of the funding. The institute is currently pursuing charitable status, Cirtwell said.

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