[Aboriginal Mining] Ontario Far North Act: Reducing Aboriginal Poverty through Parks or Mines? – by Stan Sudol

Stan Sudol is a Toronto-based communications consultant and columnist who blogs at: www.republicofmining.com He can be reached at stan.sudol@republicofmining.com

Honourable Prime Minister of Canada Stephen Harper at the Agnico-Eagle Meadowbank Mine, Nunavut

There are many reasons that contributed to Premier McGuinty’s minority government in the recent Ontario election. However, one of the most contentious issues contributing to his decline in the vast regions of the North – an area that is seldom on the Toronto media’s agenda – was the much detested Far North Act. Praised by the south’s many well-funded and powerful environmental groups, this legislation cuts off half of the Far North – 225,000 square kilometers – to resource development, roughly 21 per cent of the province’s landmass and turns it into natural parks.

As they often say, “the road to Hell is paved with good intentions.” The horrific downside to this green ideology is that mineral exploration and potential mines – the only form of economic development that could reduce the impoverished, third-world living conditions in First Nation communities – is being reduced or stopped in the affected territory.

A generation ago the destruction of the fur industry in northern Aboriginal communities by an aggressive, media-savvy environmental movement caused enormous economic hardships and contributed many social ills. Are McGuinty and his environmental thugs doing the same with their parks agenda? Is the Far North Act inherently “Anti-Aboriginal”?

For the geographically illiterate, let’s be crystal clear about how much land is being affected by the Act. The total land area of the province is 907,573 square kilometers. Southern Ontario – the land stretching east – west from the Quebec border to Windsor and the eastern shores of Lake Huron (roughly 800 kilometers in length) and ending at the southern boundaries of the Parry Sound and Nipissing Districts – is 102,326 square kilometers. Double that territory and then some and you will get a good idea of how much land will be off limits to low impact mining exploration and potential sustainable development.

The trillion-dollar Sudbury Basin, which has been in economic production for over 120 years, is an oval shaped basin measuring only 60 x 30 kms. We have no idea of the geological potential of that region and at the present time there are no plans or enough money to do a thorough geo-science assessment of that vast geography.

What if there is another Sudbury Basin, the richest mining district in North America, or Abitibi Greenstone Belt, the source of Canada’s richest gold mining districts or a second or third Ring of Fire whose mineral riches we have just begun to discover? This is economic madness – especially at a time of global economic uncertainty, massive provincial deficits and fears about significant cutbacks to unsustainable social programs and services. Once proud Ontario is now a have-not province, receiving $2.2 billion in equalization payments during 2011-2012.

“The uncertainty of land tenure in the Far North Act has made it difficult for prospecting companies in Vancouver and Toronto to raise funds for development.  And those funds raised are primarily spent “on the ground” where the resources and communities are, as we have seen the past few years,” said Harold Wilson, Thunder Bay Chamber of Commerce President. “This excitement over the mineral-rich Ring of Fire would likely not be happening if the Far North Act was in effect eight years ago.”

Due to massive industrialization and urbanization in China, India and many other developing countries, there is a ravenous global appetite for mineral products – a commodity super-cycle. Every year, China needs to build two cities the size of Toronto and Sydney, Australia, the largest rural-urban migration in the history of man.

“Canadians have to start looking at our remote communities differently”, stated Perrin Beatty, President and Chief Executive Officer of the Canadian Chamber of Commerce. “Our collective economic wellbeing and our international competitiveness could well depend upon the public policies adopted today that leverage the economic possibilities of many of these communities and their potential to contribute to our nation’s wealth”.

At a June, 2011 International Indigenous Summit on Energy and Mining in Niagara Falls, Ontario, Assembly First Nations National Chief Shawn Atleo said, “This is truly an exciting time for Indigenous peoples in Canada and around the world … We see the opportunities in resource development as a key to unlock the full potential of Indigenous peoples across the globe in ways that are responsible, sustainable and mutually beneficial to all parties.”

Outside of the KI First Nation, which was involved in a high-profile conflict with a junior miner, Platinex Inc. in the past decade and rejected the company’s attempts to explore on their traditional territories, the vast majority of other Aboriginal communities in northern Ontario welcome the benefits and jobs from mining. In fact, there are almost 200 types of economic partnership agreements between First Nations and senior miners or junior exploration companies across Canada and about 90 of those accords are in the province’s North.

The mining industry is the largest private sector employer of Aboriginal people in the country, making up about 7.5 percent of the workforce. According to a June, 2011 study from TD Economics, the “Aboriginal population has been beneficiaries of the booms in the resource sector, since the past decade.” The study estimates that total personal income for Aboriginals has grown by an impressive 7.5 per cent each year since 2001.

From 1996 to 2006, there was a 43% increase in the number of First Nations employed in this sector rising from 2,600 to more than 4,500. Since 2006, those numbers have significantly increased as many exploration sites and mine developments take place in northern regions close to Aboriginal and Inuit communities.

Last summer, a visit by Prime Minister Harper to Agnico-Eagle’s Meadowbank gold mine near Baker Lake, Nunavut highlighted the enormous benefits of mining for the local Inuit.

Approximately 38% of the 1,100 employed are Inuit from the Kivalliq Region. Agnico-Eagle has implemented extensive internal training programs to help Inuit advance in the workforce by learning new skills. Last year, almost 48% or $57 million of Meadowbank mining expenditures went to Nunavut based suppliers. And royalties will be flowing to the Inuit through their umbrella organization, the Nunavut Iunngavik Inc.

Agnico-Eagle's Meadowbank Mine near Baker Lake, Nunavut

A February 2011 study on the north by the Conference Board of Canada reported that the gross domestic product of Nunavut increase almost 12 per cent, largely due to the economic impact of the Meadowbank mine.

During the past twelve years, the social influence of the Northwest Territories three diamond mines have included $600 million in aboriginal business revenues, increased First Nations secondary school enrolment – from 36 to 56 percent – and a 50 percent reduction of Aboriginal recipients on social assistance.

During the development/construction phase at Vale’s Voisey’s Bay, Newfoundland nickel mine, in excess of $500 million was spent with aboriginal contractors. About 54% of the workforce at Voisey’s Bay is from surrounding First Nations communities and almost 80% of the mine’s annual operating expenditures are with aboriginal businesses.

Since an agreement was signed in 1995 between Xstrata Nickel and local Inuit communities in northern Quebec for the Raglan nickel mines, about $100 million in profit sharing payments have been to paid to an Inuit trust fund for economic and community development.

In addition, Xstrata Nickel has established the Tamatumani project that aims to increase the number of Inuit employees. This initiative assists workers in acquiring the needed technical skills to progress within the company. There are many more success stories between Aboriginal communities and the mining industry.

Even the junior exploration sector – which does not have the financial clout of the majors, as they have no cash flow and all their funding comes from the capital markets – are contributing jobs, opportunities and social projects for Aboriginal communities.

Noront Resources the junior with the largest land holdings in the Ring of Fire region has sponsored mining camps for Aboriginal youth in Thunder Bay and Webequie and Marten Falls, the two closest communities to their mineral deposits. CEO Wes Hanson is encouraging the youth to stay in school and get the skills needed to staff the company’s proposed Eagle’s Nest mine. In addition, the company has established a web-based portal site called Mikawaa.com. This popular social networking site has attracted local, national and global attention among all stakeholders to communicate and create a sustainable economy in the Ring of Fire.

Two other exploration juniors, Probe Mines and Rencore Resources have recently signed a Memorandum of Understanding and an Exploration Agreement, respectively, with adjacent First Nation communities that include employment, training and business opportunities, as well as share offerings and ongoing communications about their activities.

In a recent magazine interview, Hans Matthews, President of the Canadian Aboriginal Minerals Association said, “Wahnapitae First Nation is surrounded by mining companies so our community currently has about six or seven agreements now with mining companies. Through our arrangement with mining companies, we are fortunate that our unemployment rate is close to zero and our revenues from mining are quite significant so we don’t have to go cap in hand to government.” It should be noted that Wahnapitae First Nation is adjacent to the City of Greater Sudbury and does not have the isolation, poverty and social issues of many Aboriginal communities in the Far North.

Agnico-Eagle's Meadowbank Mine near Baker Lake, Nunavut

Polar Bear Provincial Park, which was established in 1970, is on the western shore of Hudson Bay and is the largest Ontario provincial park at 23,552 square kilometres. The park had about 100 tourists in 2009 and 65 visitors the following year. The nearby impoverished First Nation community sees very little tourism or economic benefits from this massive park. The remote tourism industry is very small, wage rates are not high and its economic impact will not significantly reduce Aboriginal poverty. Salaries at Agnico-Eagle’s Meadowbank gold mine can range from $70,000 to $100,000 per year. The amount of people on social assistance has plummeted in the surrounding Inuit communities.

It’s rather ironic that the supposedly “conservative mining industry” is bending over backwards to consult and make various agreements that ensure Aboriginal communities get maximum benefits in the form of jobs, businesses and royalties from the sustainable mineral development of their traditional territories and adhering to the UN Declaration on the Rights of Indigenous Peoples commitment to “prior and informed consent.”

Conversely, the Liberal-left McGuinty government and their complicent environmental allies force unwanted parks on First Nations communities with a condescending colonial ideology of the “White Man knows best,” attitude that was practiced by most governments in this country well into the last century.

Nishnawbe Aski Nation (NAN) Grand Chief Stan Beardy – who represents 49 northern Ontario First Nations – has repeatedly stated that the Far North Act will stop his impoverished membership “from achieving economic independence by preventing development needed to build a viable economic base for NAN communities, while strengthening the Ontario economy.”

If southern Ontario’s political and media elites as well as the general public are truly concerned about the impoverished living conditions, high teenage suicide rates, and hopelessness in the North’s Aboriginal communities than the Far North Act must be significantly changed to allow mineral exploration and sustainable mine development to flourish. This is the only way to both alleviate native poverty and give hope to the growing numbers of Aboriginal youth.

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