Ring of Fire Monitor

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Friday, January 28, 2011

Timmins Chamber Of Commerce Budget Submission

Excellent work by Gary Marriott, Timmins Chamber of Commerce President & Randy Hillier, MPP Lanark, Frontenac, Lennox, Addington
 
http://www.ontla.on.ca/web/committee-proceedings/committee_transcripts_details.do;jsessionid=c72d607830dacc7564312fd54d099c3dbb742b32ea5d.e3eQbNaNa3eRe3uKbNqNahaRa41ynknvrkLOlQzNp65In0?Date=2011-01-27&ParlCommID=8858&BillID=&Business=Consultations+pr%E9budg%E9taires&locale=fr&DocumentID=25496

TIMMINS CHAMBER OF COMMERCE
The Chair (Mr. Pat Hoy): Now I’d ask the Timmins Chamber of Commerce to come forward, please. Good morning. In this round, the questioning will come from the official opposition. You have 10 minutes for your presentation. If you’d just state your name before you begin for our recording Hansard?
Mr. Gary Marriott: Sure. Gary Marriott, Timmins Chamber of Commerce president.
I’d like to welcome each of you to Timmins and express our appreciation to the standing committee for holding a public input session in Timmins. We welcome the opportunity to provide input into the budget-setting process.
It is my intent to provide you with the northeastern Ontario perspective by sharing some of the economic challenges, some unique and some not so unique, facing the business community in our region.
As of today, the Timmins Chamber of Commerce represents more than 810 business members from Timmins. Our organization has been around since 1949, and we take our role as the voice of business very seriously.

Today, I’m going to speak about key areas we as the chamber are concerned about and are calling on Ontario’s government to take action and a leadership position on by addressing, in order to help northeastern Ontario promote northern development.
Energy as an economic development tool: According to the Canadian Chamber of Commerce, access to affordable, reliable energy is Canada’s most important competitive edge in the global economy. I ask you to consider if the same statement can currently be applied to the province of Ontario, and I’m afraid the answer is no. Energy costs are quickly becoming inhibitive to doing business in Ontario.
Here in Timmins, we were once home to Ontario’s largest single-site electricity consumer: the Xstrata metallurgical site. In the years leading up to its closure, they often cited energy costs as one of their greatest challenges to doing business in Ontario. The ore that comes out of the ground in Timmins is now being processed in a province with significantly lower energy costs.
According to two April 2010 reports from Hydro Quebec and Manitoba Hydro respectively, a large power user in Toronto will pay an average of almost two times more for the exact same power as a business in Winnipeg, Manitoba, and 1.6 times more than a business in Montreal, Quebec. Those rates are even higher when you look at other small communities in northern Ontario, and the comparison charts are included.
With Ontario energy rates forecast to increase in the coming years, the pressure on large power consumers is increasingly tremendous, and our neighbouring provinces are looking more and more attractive to businesses that generate economic activity within our province. We are all feeling the results of the expensive power in Ontario. Until this is addressed in a very serious way, Ontario will continue to lose manufacturing and refining operations and potentially set itself up to miss out on some lucrative opportunities, including some of those that will result from the Ring of Fire.
An energy strategy must be developed to implement and ensure northern Ontario’s competitiveness by creating a more sustainable environment for industry and overall community development. Short-term subsidies are good, but will not solve the issue entirely. The northern industrial electricity program was welcomed in last year’s budget; however, we believe that more can be done in order to retain manufacturing and refining operations in Ontario.
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Far North development and the Ring of Fire: Development in the Far North will be dependent upon a number of factors. As I mentioned, making Ontario competitive in pricing for electricity and other resources will be key to the Ring of Fire development. If we are serious as a province about wanting chromite and other Ring of Fire minerals refined in Ontario, we need to get serious about making energy affordable for business.
Connectivities will also play a very big role in the development of the Far North. To that extent, we encourage the government to invest in the economic development tool that already exists: the Ontario Northland Transportation Commission. There has been a lot of talk about the rail and what it can do to connect our communities and our First Nations, while creating jobs and investing in much-needed infrastructure to facilitate economic growth in the near future in the Far North. Infrastructure investment in rail and roads in the north and Far North would undoubtedly have tangible economic and socio-economic benefits for Ontario to enjoy.
Land use planning: With respect to land use planning in the Far North, we recognize that this is a sensitive issue for many of our First Nation neighbours. We also recognize and respect that much of the development in the Far North will be driven by First Nation communities. We support land use planning that is occurring with the First Nations, welcome the process and encourage the government to provide significant resources to such processes.
We can see from the demographic trends that First Nation populations are increasing. Today, First Nations represent almost 13% of northern Ontario’s population. Many businesses are facing workforce challenges. We believe that public investment in infrastructure in northern Ontario—roads, rail, access to Internet and education opportunities—is vital to ensuring that this segment of the population is able to participate in Ontario’s workforce.
Alignment of provincial and federal economic assessment processes: Businesses are still subject to duplicate requirements under federal and provincial environmental assessments. We understand that the Ring of Fire coordinator position was created with the intent to provide assistance to the mining companies navigating the legislative requirements necessary under the current regulation. While this will indeed help development to proceed in that region, it highlights the present issues of duplicate requirements and the red tape burden that businesses face. We encourage the provincial government to work with the federal government to harmonize the provincial and federal environmental assessment process to eliminate duplication and encourage economic development in our region without the needless delays.
How the government develops regulation: New regulations invoked by the Ontario government can be unnecessarily costly and place many businesses in jeopardy of survival. Further, some regulations imposed are precautionary rather than science- and evidence-based. The cost of implementing and enforcing the resulting regulations can often outweigh the intended benefits. As a result, unnecessary financial and physical burden is placed on businesses, as well as on the public to address problems that may not even exist. Discussion with industry and use of science-based cost-benefit analysis in developing regulations can minimize the unnecessary costs to both businesses and government. We strongly encourage the province to continue to work towards fully evaluating the impacts of new regulations on all businesses and industries in all the areas of the province before putting them in place.
The Mining Act: Mining is a mainstay of our northern economy. Consider these figures from the Ministry of Northern Development, Mines and Forestry website—they are from 2006; however, the most recent are not available: In 2006, mining in northern Ontario produced approximately $7 billion worth of minerals; mining in northern Ontario employs approximately 14,000 people; mining exploration activities employ approximately 1,800 people; northern Ontario is home to all of Ontario’s 28 mines and an estimated 400 mining service and supply companies. The importance of the mining industry in the economy of northern Ontario cannot be overstated.
At this point in time, we are concerned that the implementation of the mining regulations, while well intended, will impede the ability of junior exploration companies to operate in Ontario. Many of these independent operations will lack the resources and manpower necessary to comply with all of the regulations and requirements of the Mining Act.
Continued reinvestment in northern Ontario through the heritage fund: This is vital assistance from the government that enables government revenues to return to the north to support the growth of the economy. We applaud the government’s establishment of the new northern Ontario entrepreneur program and accelerated business education tax rate cuts for northern businesses which resulted in savings totalling more than $17 million. We support the continued investment of existing and new NOHFC programs to help northern Ontario innovation and economic development.
Northern Ontario has a unique economy prone to boom and bust cycles. Our economy largely depends on non-renewable natural resources. As a chamber, we advocate the government policies whose impacts are thoroughly evaluated before they’re set in place: for a competitive, affordable energy strategy, not one that will prevent further investment in our province; and for government investment in factors that are critical to our region’s future, including transportation, infrastructure, education, innovation and First Nations development.
On behalf of the Timmins Chamber of Commerce, I would like to thank you for giving me the opportunity to present our perspective and look forward to further tools launched in our next budget to support unique business opportunities in northern Ontario.
The Chair (Mr. Pat Hoy): Thank you. The questioning will go to the official opposition. Mr. Hillier.
Mr. Randy Hillier: Thank you very much, Gary, for that wonderful presentation. It’s great to see you putting out with clarity what the challenges and the difficulties are facing industry and therefore facing prosperity and jobs in northern Ontario. There’s a lot of subject matter in there. I think I’d like to focus in on maybe a couple of aspects.
The first would be on the energy side. The graphs that you’ve got really show that as you use more energy, your uncompetitiveness becomes exacerbated under the system we have. It was interesting: This past summer, I met with a number of state and provincial legislators in Toronto at a conference. The VP for Ontario Hydro was there, and in the discussion about the Green Energy Act and how we’re doing things, he made the comment that we’ve made a conscious decision in Ontario that if your business requires power, Ontario is not the place to set up business.
I’m just wondering, have you had that sort of message? I don’t remember having that discussion in the Legislature. I’m wondering if that’s been communicated in any way to the chamber here and the mining companies that you deal with.
Mr. Gary Marriott: I don’t really recall that the message has been communicated that way, but I would certainly hate to think that that is the message. If we think about the Far North and the Ring of Fire and all the talk that’s going on about the Ring of Fire, dedicating the position to the Ring of Fire, if that ore is to stay in Ontario, and if Ontario is going to gain from the benefits of producing that ore, it’s going to take 740 megawatts of power to have a chromite facility. When Xstrata was here, their energy requirements were about 130 megawatts of energy. At that time, they were the single largest in Ontario.
If we want that facility and all the benefits from the Ring of Fire to remain in Ontario, then we’re going to have to have energy costs that are going to allow them to do business. Otherwise, they’re going to go looking.
Mr. Randy Hillier: Absolutely. That’s clearly the way we’ve set it up. If we are to see any real value, any long-term added value out of the Ring of Fire, we’re going to have to have a complete 180-degree shift on our energy policy, or else we’re not even going to let—there won’t be future Xstratas because they just won’t set up here in the first place. They’ll be shipped out.
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Mr. Gary Marriott: The thing I don’t understand, Mr. Hillier, is that we just had four dams do expansions here in northern Ontario. Those dams produce energy at a rate of about three cents per megawatt. There is now expansion taking place further in northern Ontario of an additional four dams. They’re a great source of energy.
Mr. Randy Hillier: They’re the cleanest and greenest energy I’ve ever seen, and also the cheapest.
Also, to just keep on the mining, though: We know that in 2001, when actually Tim Hudak was minister of mines, Ontario was the number one jurisdiction in the world for mining investment. I believe in 2007 we slipped to 15th. I heard last night from some of the prospectors and developers here that they believe, in the most current numbers, we’ll be down to 27th, with places like the Congo and Tanzania being more desirable than Ontario for investment in mining.
We know that energy has an impact on that, but what other things are you seeing that are diminishing Ontario’s position in mining—things like the Far North Act, the regulatory burdens? You mentioned a number of those. I think that was very clear, that we have more social-based regulations than science-based regulations these days.
Mr. Gary Marriott: Certainly, permitting between the provincial and federal governments—if those policies don’t become aligned and less complicated, then the mines are going to look at places where it’s easier to set up.
Mr. Randy Hillier: It was interesting: During the stimulus spending, if you recall, the Ontario government and the federal government agreed to harmonize all the environmental assessment processes in order to get government projects under way, but we have not seen any impetus or any motivation at all to harmonize those regulations for our mining, our forestry or any other businesses.
Mr. Gary Marriott: Our concern definitely is—we strongly believe in making sure that all the environmental due diligence is done, but to have it as a duplicate process just extends the amount of time that it takes these companies to get set up.
Mr. Randy Hillier: We understand that it’s about 10 or 15 years to get through the process, and that’s 10 or 15 years where we’re preventing people from actually working.
Mr. Gary Marriott: Exactly.
The Chair (Mr. Pat Hoy): Thank you for your submission.

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