GUEST COLUMN (June 29, 1992)

Meaning “Our Land” in Inuktitut, Nunavut is the new Inuit territory to be formed from the Northwest Territories’ eastern Arctic portion.

The creation of Nunavut no later than April 1, 1999, is expected as a result of the Inuit Land Claim Settlement signed recently by the federal government and Inuit representatives. The new territory will cover two million square kilometres, more than half of the existing area of the Northwest Territories and equal to about one-fifth of Canada’s total land mass. Within Nunavut, the Inuit will own the surface rights to about 350,000 sq. km and the mineral rights underlying 36,300 sq. km. The remaining area will consist of mostly Crown lands and a number of newly designated parks. At present Inuit and federal government representatives have negotiated a final agreement which the Inuit may ratify in November. It contains important directives pertinent to mineral exploration and mining. Some of the more critical points are summarized as follows:

— Operating mines — The land selection process, which is now complete, has specifically excluded existing, operating mines. The Inuit will retain a share of government royalties.

— Crown lands — Crown lands within Nunavut will continue to be administered by government under existing legislation. Pre-existing third-party interests on Crown lands will remain unaffected.

— Inuit-owned lands — All pre-existing third-party interests on such lands, including holders of title in the form of claims or leases, will remain unchanged and retain all rights as stipulated under current legislation. Such third-party interests will continue to be administered by government in accordance with legislation applicable to Crown lands. The interest-holder and the Inuit landlords may agree that it is within their mutual interest to have the Inuit administer the third-party interest. In such a case, the legislation shall no longer be deemed to apply and the government shall transfer administration to the local Inuit landowners.

— Third-party access — A person with a valid prospecting licence shall have a right of access to Inuit-owned lands to conduct mineral prospecting activities, with the consent of the local Designated Inuit Organization (DIO). The operator may be required to pay an entry fee and compensation costs. The DIO shall grant its consent if the activities are conducted in a manner consistent with a yet-to-be developed “code for expedited prospecting access.”

If an operator is unable to obtain the consent of the DIO, it may apply to a Surface Rights Tribunal (SRT) for an entry order. The SRT will be required to grant any reasonable request for entry, but conditions may apply. — Major development projects — On Inuit-owned lands, major development, or exploitation projects involving more than 200-person years of employment or capital costs in excess of $35 million in a 5-year period, will first require the negotiation of an Inuit Impact and Benefit Agreement (IIBA). The IIBA may include any matter connected with the project that can have a detrimental or beneficial impact on the Inuit on a regional or local basis. Exploration projects will not require an IIBA.

— Resource royalty sharing — For operations on Crown lands or Inuit-owned surface lands, the Inuit have the right to receive annual payments equal to 50% of the first $2 million of resource royalty received by government, and 5% of any additional resource royalty received by government in that year. The Inuit can receive all royalties from operations on land where they own the mineral rights.

Representatives of the Northwest Territories government are optimistic that the final agreement will have a net positive effect on development in the North. I would concede that there certainly is the potential for positive results. However, the agreement contains many areas of uncertainty. Applications of the rules with a spirit of encouragement and co-operation will help to dispel most of the hesitation investors may currently feel. — Anthony Andrews is managing director of the Prospectors and Developers Association of Canada.