Ontario’s Resource Revenue Sharing Agreements: A Step towards Reconciliation?

By Matt Corbeil

Announced last spring, Ontario’s new resource revenue sharing agreements (RRS) with three northern First Nations councils are set to come into effect this fall. The agreements were marketed with lofty rhetoric. The government press release described them as “an historic step on Ontario’s journey of healing and reconciliation with Inidgenous peoples.” The MacDonald Laurier Institute’s Senior Munk Fellow Ken Coates partnered with IAMGOLD Corporation’s Stephen Crozier in penning a glowing editorial in the Globe and Mail, calling RRS a “transformative development” that would change “the very foundations of resource development in Ontario.” Coates and Crozier praised the agreements for their simplicity, noting the details were “straightforward.” Under RRS, the province will allocate 45 percent of forestry stumpage fees as well as 40 percent of mining tax payments associated with active mines to participating First Nations, “with no strings attached.”

In many respects, RRS appears to meet the longstanding demands of Indigenous peoples and their allies, who have been pressing the government for a more equitable distribution of the province’s mineral wealth for the better part of a decade. 

Yet, RRS is hardly about “healing” or “reconciliation.” Instead, RRS is consistent with the Ontario government’s longstanding policy of opening up as much public land to private mineral extraction as it can.

The problem is obvious to anyone familiar with Ontario’s mining tax, which serves as the province’s royalty for the use of the public’s non-renewable resources. The mining tax is so riddled with loopholes, exemptions and deductions that, oftentimes, even the most profitable companies pay no tax at all. 

Take Glencore, for example. Glencore is the world’s biggest commodities trader, with a huge stake in everything from soybeans to base metals to thermal coal. With operations spanning six continents, Glencore controls assets worth $129 billion. In 2018, the company reported sales revenues of just under $220 billion, good for 16th place among the world’s largest publicly-traded corporations. Recently, Glencore made a splash when it announced that it would “improve transparency” and cut down on its use of offshore tax havens. Yet, the company is notably opaque when it comes to its Ontario operations. There is no way for the public to know how much revenue the company earns from its three mines in the province. Its annual reports lump together its Sudbury-area nickel operations with its other “nickel assets” in Quebec and Norway forming its “Integrated Nickel Operations.” Similarly, its Kidd Creek copper-zinc mine near Timmins is but one piece of the company’s much larger “North America zinc assets,” which include the Bracemac-McLeod mine in Matagami Quebec, the CEZ Refinery in Valleyfield, Quebec and the Brunswick Lead Smelter in Belledune, New Brunswick.

Together, Glencore’s Integrated Nickel Operations and North America zinc assets generated $3.9 billion in 2018. Meanwhile, Glencore’s taxes on income paid to the Ontario government totalled just $14.4 million – an amount equivalent to less than half of one percent of its Canadian-based nickel and zinc revenues. 

The year prior, Glencore paid no tax to Ontario.

Glencore is exceptional only for its massive size. Other mining companies receive similarly generous tax treatment. For instance, Detour Gold, controlled by Wall Street hedge-fund billionaire John Paulson, paid no tax to either the federal or provincial governments in the three-year period 2016-2018. Over that time, the company extracted more than $2.1 billion worth of gold from its single mine in the Detour Lake area.  

These negligible tax payments raise an obvious question: If a company pays no mining tax, how much revenue can a signatory First Nation expect to receive in return? After all, 40 percent of 0 is 0! Further compounding the problem, company and mine-specific mining tax payments are confidential under the Mining Tax Act.

As it turns out, RRS won’t be based off company-specific mining tax payments at all. As a Senior Policy Advisor from the Minister of Energy, Northern Development and Mines explained by email, “specific mining tax and royalty data for each mine in the province is not available on a per company or per mine basis and is not being used to calculate the Mining Funds in the resource revenue sharing agreements.”

Instead, “Ontario has negotiated agreements that use a formula that assigns a notional allocation to each active mine.”

The notional allocation will be calculated using “publicly available information including gross revenues from all mining operations in Ontario and Ontario mining tax and royalty revenue as published in Ontario’s Public Accounts.”

If the details of this arrangement are hardly as clear as its proponents have made it out to be, its benefits to industry are. At no additional cost to themselves, mining companies have locked signatory First Nations into an economic development model that clearly favours enhanced mineral extraction. Perhaps unsurprisingly, the industry itself has advocated a form of revenue sharing, on condition that it be derived from existing tax payments. As Ontario Mining Association President Chris Hodgson explained to Sudbury Mining Solutions Journal, “We advocated for revenue sharing for a long time to try to align the interests between local communities and the Indigenous communities and the mining community. [RRS] aligns interests even further. You get paid when you have an actual mine in production.”

Given the structure of the agreements, even those companies that pay no mining tax will benefit from the goodwill generated by the funding allocations. 

The implications for First Nations communities are clear. With RRS bringing in revenues to pay for much-needed programs and services in social welfare, education and health, First Nations will have to think hard about government policies that could reduce industry profits. And since new mines will come with an even higher allocation of 45 percent of their “mining tax payments,” signatory First Nations now have a strong incentive to welcome mineral exploration on their traditional territories. 

Already there are indications that RRS is contributing to this type of thinking. As Wabun Tribal Council’s mineral development advisor Stephanie Labelle recently wrote in the Canadian Mining Journal, RRS “is built on the sharing of a profit-based tax, which should incentivize First Nations to work meaningfully with mining companies with the success and development of existing and prospective projects.”

Campaign Financing and the Ontario Mining Industry’s Political Influence

Campaign financing is hardly the only way that big corporations gain political clout, but it is no doubt an important one. As Nicholas Graham, Shannon Daub and Bill Carroll put it in their analysis of the fossil fuel industry’s political influence in British Columbia, “One of the most direct ways that corporations participate in the political process is through donations to political parties. Few believe that such donations are an act of altruism, or that they represent mere ‘gifts.’” Corporations make political contributions for one of two purposes. “Ideological contributions” are given to political parties “whose policies favour corporate needs and wishes,” while “pragmatic donations” are “more tightly connected to the particular interests of the corporation, helping them gain personal access to politicians, and ensuring their views on key matters are heard.”

Inspired by Graham, Daub and Carroll’s revealing analysis of the fossil fuel industry’s deep and extensive political influence in British Columbia, OJAMS decided to take a closer look at the relationship between Ontario’s political parties and the metal mining industry in this province.

Using Elections Ontario’s financial statements available online, we found out how much each of the major mining companies with active operations in the province and the two junior mining companies with claims in the Ring of Fire gave to the three main political parties between 2014 and 2016 (because of technical problems on the Elections Ontario website, data prior to 2014 and after 2016 were not available).

The mining industry appears to have made both ideological and pragmatic donations, as evidenced by Barrick Gold’s extensive contributions to the right-wing Progressive Conservative Party, and various companies’ selective donations to individual New Democratic Party candidates in important mining jurisdictions.

To be sure, as the recent changes to the province’s election financing laws have barred corporate donations, the mining industry will have to adjust its political strategies. However, it would be a mistake to think that campaign financing is the only route for the industry to gain influence with political parties or governments. As we will show below, the Ontario Mining Association – the industry’s main lobbying group in the province – enjoys deep ties with the Progressive Conservative Party, such that a 2018 Conservative election victory would be a welcome outcome for the mining industry, even if the Liberal Party appears to be the industry’s favorite.

The “Majors”

According to the Ontario Mining Association’s map of mining operations in Ontario, there were twelve companies engaged in active mineral extraction as of 2017 (Companies engaged in mineral extraction are known as “majors” in the mining lingo. This is to distinguish them from the “juniors,” firms that are primarily engaged in mineral exploration.). Of these twelve companies, seven made registered political donations in the period 2014-2016.

The table below lists each company in descending order according to its total contributions:

Company Liberal Party of Ontario Progressive Conservative Party New Democratic Party Total
Barrick Gold Inc. $64,445.00 $83,164.00 $5,857.94 $153,466.94
Detour Gold Inc. $62,286.00 $4,140.00 $980.32 $67,406.32
Goldcorp Inc. $49,719.00 $3,890.00 $1,117.12 $54,726.12
Vale S.A. $20,450.00 0 0 $20,450.00
Glencore P.L.C. $4,775.00 0 0 $4,775.00
Wesdome Gold Mines Ltd. 0 0 $2,249.68 $2,249.68
Alamos Gold Inc. 0 0 $742.70 $742.70
Totals $201,675.00 $91,194.00 $10,947.76 $303,816.76


In total, metal mining companies donated $303,816.76 to Ontario’s political parties over the period 2014-16. At $201,675.00, the Liberal Party received more than 66 percent of the total, the Progressive Conservative Party just over 30 percent, while the NDP received just under 4 percent of the donations.

As can be seen in the table, Barrick Gold was by far the largest donor. Its combined contributions of $153,466.94 accounted for more than half of the industry’s total donations and were more than double the amount donated by Detour Gold, the next largest donor. While Barrick gave $83,164.00 to the Progressive Conservative Party – an amount greater than the total political contributions of any other mining company – its substantial donation of $64,445.00 to the Liberal Party made it the mining industry’s most important backer of that party as well.

Barrick Gold’s founder and chairman emeritus – Peter Munk – was also a major contributor. In fact, Munk and his wife Melanie donated $72,600 to the Progressive Conservative Party, $20,000 of which went to Christine Elliott’s 2015 leadership campaign (Elliott was former Minister of Finance Jim Flaherty’s wife before he passed away). If Munk’s donations are combined with Barrick’s, then the company spent $226,066.94 on political parties in three years, $155,764.00 of which went to the Progressive Conservative Party.

For their part, the Sudbury-area nickel mining companies – the Brazilian multinational Vale S.A. and the Swiss multinational Glencore P.L.C. – donated just over $25,000, all of which went to the Liberal Party and its candidates.

As far as campaign contributions go, the Liberal Party is the mining industry’s number one choice. Clearly, then, the big companies have not been much bothered by the current Liberal government’s efforts to “modernize the Mining Act.” Notably, while the industry donated far more to the Progressive Conservative Party than it did to the New Democratic Party, were it not for Barrick Gold, the New Democratic Party would have received a larger share.


Ring of Fire

Big mining companies with active operations were not the only members of the mining industry to make political contributions. So too did the two main players in the so-called “Ring of Fire,” Noront Resources and KWG Resources. In fact, only Barrick Gold made larger political donations than KWG. However, this wasn’t entirely clear from Elections Ontario’s financial statements because KWG made some of its donations through its subsidiary companies, Canada Chrome and Debut Diamonds.

The table below shows lists the donations to each of the three main political parties.

Liberal Party of Ontario Progressive Conservative Party New Democratic Party Total
KWG $48,922.00 $1,066.52 $15,780.39 $65,768.91
Canada Chrome* $10,475.00 0 $19,285.00 $29,760.00
Debut Diamonds* 0 0 $1,330.00 $1,330.00
KWG and Subsidiaries $59,397.00 $1,066.52 $36,395.39 $96,858.91
Noront Resources $25,640.00 $3,932.23 $5,187.36 $34,759.59
Totals $85,037.00 $4,998.75 $41,582.75 $131,618.50

*Denotes a subsidiary of KWG Resources.

Thus, the two Ring of Fire companies donated a total of $131,618.50 over this period. As was the case among the majors, the governing Liberal Party was the companies’ party of choice, receiving about 65 percent of the total.

However, unlike the majors, the Ring of Fire juniors showed a clear preference for the NDP and its candidates over the Conservatives. This appears to represent a pragmatic choice, that is, an effort to gain influence with key politicians. For instance, through its subsidiary Canada Chrome, KWG made the maximum contribution to NDP candidate Michael Mantha’s (Algoma-Manitoulin) 2014 election campaign. Mantha had served from 2011-2014 as his party’s critic for northern affairs and mining, while more recently he has taken the job as critic for indigenous relations and reconciliation.

Similarly, both KWG and Noront donated to the Gilles Bisson’s (James Bay-Timmins) 2014 campaign. Not only is Bisson from an important mining area, but he is also a prominent member of his party, serving as the NDP’s house leader.

The Ontario Mining Association

As noted above, campaign financing is far from the only way corporations gain political influence. Lobbying associations are another important mechanism. In Ontario, the mining industry is represented primarily by the Ontario Mining Association (OMA).

The current OMA staff is, for all intents and purposes, former Progressive Conservative Premier Mike Harris’ Ministry of Northern Development and Mines. The association’s current president, Chris Hodgson, was from 1995-1999 the Minister of Natural Resources and Northern Development and Mines. It should be noted that it was during Hodgson’s term that members of the Ontario Provincial Police violently suppressed the Chippewa of Kettle and Stoney Point First Nation’s protest at Ipperwash Provincial Park and killed Dudley George. At an inquiry into the handling of the protest, the former deputy solicitor-general, Elain Todres, testified that she heard Hodgson say, “Get the fucking Indians out of my park” at a meeting just 11 hours before George was killed.

At least two of Hodgson’s staffers from Northern Development and Mines are now with him at the OMA. The association’s manager of industrial and government relations, Philip Bousquet, was Hodgson’s lead policy advisor at the ministry. The association’s manager stakeholder relations, Cheryl Brownlee, was also one of Hodgons’s policy advisors.

The OMA’s ties to the Ontario Conservative Party don’t end there. It’s energy policy coordinator – Adam Bloskie – was previously an intern in Norm Miller’s (Parry Sound) office. Miller has been the Progressive Conservative Party’s Northern Development and Mines critic since 2014.


Clearly, the mining industry makes a significant effort to influence political decisions in the province. Given the industry’s extensive ties with both the Liberal and Progressive Conservative parties and its selective backing of key New Democratic Party candidates, mining justice activists need to keep the pressure on government no matter which party gains office in the next election.