Northwest Territories’ latest ‘devolution’ becoming a reality

VANCOUVER — After 12 years of lobbying, planning and negotiating, the Northwest Territories (NWT) government will soon take over responsibility from the federal government for managing the territory’s lands, water and resources.

“We’ve been waiting for this day for a long time,” said NWT Premier Bob McLeod at a reception during the Roundup 2014 conference in Vanocuver in late January. “With this ‘devolution’ we feel the NWT has arrived, and we’re prepared to work with the industry to make sure we can have balanced development and benefit from mining in the NWT.”

The Canadian government used to manage almost every aspect of governance in the territories, but since the 1960s a series of devolution agreements has transferred many of these responsibilities to territorial governments.

Yukon took over responsibility for its resources in 2003. In the NWT, a series of devolution agreements transferred responsibility for education, health care, social services, highways, forestry management and airport administration to the territory, but resources had remained a federal purview.

That will change on April 1, when the government of the NWT (GNWT) takes over responsibility for managing public land, water and resources. And while the earlier devolution agreements all made the NWT more autonomous, the devolution of resources will be the first to give the GNWT the ability to generate revenue.

After the transfer, the GNWT will be responsible for deciding how public resources are developed. In exchange, royalties and other resource revenues worth tens of millions of dollars that go to the federal government will stay in the NWT instead.

The GNWT will keep up to 50% of the revenues collected from resource development on public lands. The total amount earned, however, is capped, based on the territory’s federal equalization payments. Equalization payments are a Canadian system designed to support provinces and territories with lower tax revenues.

In the 2012–2013 fiscal year, the NWT would have retained $69 million from resource projects had devolution been in place. Most of those monies stem from the NWT’s four mines, of which three produce diamonds and one produces tungsten.

The discovery and mining of diamonds in the NWT has transformed the territory’s economy and society. The first mine only opened in 1998, but the NWT has since gone on to rank as the third-largest diamond producer in the world by value.

“We all know mining is the number-one industry in the NWT,” said Brooke Clements, president of the NWT & Nunavut Chamber of Mines. “But the four mines now operating in the NWT will not be around forever. The GNWT is serious about its new role in managing lands, water and resources, and making the NWT a destination of choice for mining and exploration investment for decades to come.”

To start, the GNWT will mirror existing federal legislation and processes around resource management. In time, the GNWT will work with Aboriginal governments, regulatory boards, industry and other stakeholders to customize and improve the system.

Five of seven Aboriginal governments in the NWT participated in the devolution debate, resulting in a management system that shares resource revenues from public lands with Aboriginals on an unprecedented scope and scale, according to the GNWT.

“Our government is getting ready to hit the ground running on April 1,” McLeod said. “We’re moving into exciting times, and I think that with the change in responsibilities, we’re going to be able to work well together with industry and the north, and Canada can only benefit from that.”