Ontario's plan for the remote Ring of Fire mineral deposit has "serious structural problems" according to the federal Natural Resources Minister, and that's why Greg Rickford says Canada is cautious about partnering with the province to build roads and power lines.

Ontario's Minister of Northern Development and Mines wrote to Rickford last week, asking for a meeting to discuss the province's proposal for $1 billion under the Building Canada Fund.

"We need you to be actively engaged in these discussions as we chart a path forward," Michael Gravelle wrote in a letter dated Dec. 11. "Your government's acknowledgement of a matching $1 billion commitment to support infrastructure development is key."

Greg Rickford Italy G7 Energy

Natural Resources Minister Greg Rickford says Ontario's plans for the Ring of Fire are flawed. (Riccardo De Luca/Associated Press)

​Rickford said he is happy to meet with Gravelle but is not so happy with the way the province is approaching development of what both levels of government see as a key resource.

"We're waiting for the province to maybe move beyond the letter-writing and get a submission to us, technically, about a priority and a priority project and we'll move forward on that," Rickford said.

He outlined what he describes as three key structural problems with Ontario's approach that "only the province can resolve."

  • The slow pace of talks with First Nations on "own source revenue" also known as resource revenue sharing.

"They have a mandate to negotiate a mandate to negotiate," Rickford said.

  • The Ontario Mining and Lands Commissioner's intervention on the potential north-south transportation route

"It shouldn't have even come to a decision anyway, but that stifled discussions around any road options that could also serve as electricity corridors," he said.

  • The makeup of the Ring of Fire Development Corporation

Rickford said the federal government would be "loathe" to invest money "to park it in a development corporation that Ontario senior bureaucrats would administer... That's not an option for us, it's not an option for the First Nations, it's not an option for the private sector."

It is possible for a mining company and a First Nation to partner on a proposal to the Building Canada Fund without the province, Rickford said.

It would be "unfortunate" if the province were cut out of the opportunity to play a key role in the development but "we're not far off of that place," he said.

Michael Gravelle

Ontario's Northern Development and Mines Minister Michael Gravelle says a federal commitment would send a strong signal to potential investors in the Ring of Fire. (Jeff Walters/CBC)

The Ontario government has estimated the total capital investment for infrastructure in the Ring of Fire in the range of $800 million to $1 billion, with the estimated costs of connecting the First Nations in the area to all-season access roads at $1.25 billion.​

Gravelle said the province's $1 billion dollar commitment to the project is firm, regardless of whether the federal government contributes any funding.

"The province has got a very complete and strategic plan for moving the project forward," Gravelle said. "We have positioned ourselves and positioned the province to move forward with this project."

Letter to Minister Rickford

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