THUNDER BAY, Ont. - Ontario's governing Liberals say they're willing to put up $1 billion to develop an all-season transportation corridor to the Ring of Fire if the federal Conservatives match the funds.
Ottawa must help bear the cost of building the infrastructure that's needed to develop the mineral-rich region, create jobs and boost northern Ontario's hard-hit economy, they said Monday.
"We are coming to the table with our best offer and we need the prime minister and his team to join us there," said Michael Gravelle, Ontario's minister of northern development and mines.
The province has maintained that the Harper Conservatives should be actively involved in the Ring of Fire's development as they have for other projects, such as the Alberta oilsands.
The Ontario Chamber of Commerce has estimated that the project could generate $9.4 billion in new economic activity over the next decade and support 5,500 jobs a year.
It said it would also provide the federal, Ontario and municipal governments with almost $2 billion in revenue over that period and $6.7 billion over 32 years.
But the lack of a transportation route has been a major barrier to developing the Ring of Fire — about 500 kilometres northeast of Thunder Bay, Ont. — which is believed to contain one of the largest chromite deposits in the world.
The project suffered a major setback last November, when a big mining company that was going to pour $3 billion into the Ring of Fire suddenly pulled out.
Cliffs Natural Resources Inc. suspended its operations indefinitely, saying it couldn't keep spending money while the question of whether it would be able to build an all-weather road to the remote site remained in doubt.
Noront Resources Ltd. (TSXV:NOT), which wants to develop its Eagle's Nest and Blackbird mining projects, said the province's commitment is a "vital milestone" that will benefit remote First Nations communities.
"Mining and the associated job creation can't happen without infrastructure, so we are pleased to see the province make a clear public commitment to funding a transportation corridor in the Ring of Fire," Noront president and CEO Alan Coutts said in a release.
The Liberals say they've been asking Ottawa for months to commit money to developing a route.
They've asked Prime Minister Stephen Harper to pay for half the $2.25-billion estimated cost of building both roads and industrial infrastructure.
Greg Rickford, the federal minister responsible for the file, has said it's up to Ontario to apply for infrastructure funding under the new Building Canada fund.
"We have always been clear that if the province identifies the Ring of Fire as a priority, (the budget) includes over $53 billion for provincial and municipal infrastructure" over 10 years, Rickford said in an emailed statement.
But the province has said the Building Canada fund is insufficient as Ontario's share, which is aimed at supporting all kinds of projects, is only $2.4 billion over 10 years.
Ontario's Progressive Conservatives said the timing of Gravelle's announcement — three days before a budget that could topple the minority Liberals — is suspicious.
The Liberals have dragged their heels on developing the Ring of Fire and the loss of jobs is hurting them in the north, said Tory finance critic Vic Fedeli, who represents the northern riding of Nipissing.
"This is nothing but pure electioneering, trying to spin it off and blame the feds somehow for their own inaction," he said.
— By Maria Babbage in Toronto