Bring on the devolution

SARA MINOGUE

The Northwest Territories had the country’s highest GDP in 2004 by far, thanks to diamond and mineral mining, yet it remains on the federal government’s hand-out list.

This situation won’t change until the federal government agrees to share the proceeds of natural resources with the governments where the resources are found, in a devolution agreement, says a report on money matters with the federal government, produced for Canada’s premiers.

“The panel believes that it is in the national interest to ensure that northerners are the primary decision makers and the principal beneficiaries of northern resource development,” says the advisory panel on fiscal imbalance in its report to the Council of the Federation, a group of Canadian premiers.

Developing resources requires infrastructure, such as roads and ports, as well as education, training and social programs to help northerners participate in the boom.

“Revenues from resource development are more than adequate to meet these needs,” the report says.

“Development in the NWT alone promises hundreds of millions of dollars per year in new revenues, including federal and territorial income taxes and royalties. However, under current arrangements in the NWT and Nunavut, the federal government will net more than 95 cents of each new dollar, while the territorial government keeps less than 5 cents.”

The report notes a coming boom in resource wealth for Nunavut.

But it does not recommend following the devolution deal the Yukon negotiated in 2001.

Under that deal, the Yukon keeps only the first $3 million in royalties; anything after that is deducted from its annual grant from Ottawa. With new development, the Yukon government would only gain eight to 10 cents on the dollar.
The panel recommends reopening this agreement.