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NAM wants resource money

Give municipalities a share of royalty benefits, NAM president says


Nunavut’s local governments must get a share of the resource benefits that would flow from a devolution agreement, Elisapee Sheutiapik, the president of the Nunavut Association of Municipalities, told members of the House of Commons finance committee last week.

“Nunavut cannot afford to let its resources be taken without fair compensation. Moreover, it is NAM’s position that the communities of Nunavut need a direct and fair share of the revenues,” Sheutiapik said.

Though devolution talks have yet to begin, the Government of Nunavut has already given this idea the cold shoulder.

An email leaked to Nunatsiaq News earlier this year reveals that GN officials sabotaged a NAM funding application aimed at getting money to pay for research on devolution.

In the email, the GN’s deputy minister of Intergovernmental Affairs, David Omilgoitok, went over the heads of DIAND officials in Nunavut. He urged DIAND bosses in Ottawa not to grant the money that the NAM was seeking, saying the municipal association should not be involved in devolution talks.

But the NAM says they don’t want a seat at the table when negotiators from Nunavut and Ottawa work out a devolution agreement. They do say they want to see a guaranteed stream of revenue from resource development.

In support of this demand, Sheutiapik said last week that local governments would make better use of the royalty revenues that could flow out of a devolution agreement on resource development.

“Central governments have failed to use tax revenues from mining companies effectively to fund basic public services and empower local governments…,” she said, quoting the International Council on Mining and Metals.

She told MPs that, even though resource development can generate enormous wealth, communities from resource-rich regions often suffer from “poor economic growth, inadequate investment in health, education, sanitation and poor social conditions.”

This “resource curse,” as it’s called by many international development agencies, has been “integral” to the history of northern resource development, Sheutiapik said, pointing out that in northern Canada, resource development often means:

* Profits go to outside investors;
* Business goes to outside services and suppliers;
* Wages go to outside labor;
* Public revenues go to central governments; and
* The vast majority of local people are barred from participation by poor education, poor infrastructure and inadequate services.

All this is in line with a lengthy resolution passed this past May at the NAM’s 2006 annual general meeting in Cambridge Bay.

At that May meeting, NAM delegates were given a report by researcher Russell Banta, who was hired to produce a strategic plan that they are urging the GN to adopt.

Banta’s research showed that during its 25-year lifespan, the owners of the now-defunct Nanisivik mine near Arctic Bay extracted about $1.7 billion worth of zinc, lead and silver.

But in the end, “there are few lasting benefits for the people of Arctic Bay,” Banta found.

To prevent this from happening again, NAM says Nunavut needs a plan that would see resource revenues invested in community development, especially those communities that are most affected by mineral and oil and gas development.

In her presentation to the Commons finance committee, Sheutiapik said even an adjustment to the territorial funding formula, which the GN hopes to get this fall, would be “not sufficient to address specific gaps in programs, services and infrastructure in Nunavut.”

So to fix that, Nunavut needs “informed decisions the next budget” to deal with three things:

* critical service and facility gaps in Nunavut communities;
* fairly sharing Nunavut’s resource revenues through territorial and local governments; and,
* financial support for community development planning and implementation leading to “sustainable Nunavut communities.”

The process called “devolution” would give Nunavut a big province-like power: a form of control over public lands and natural resources in Nunavut. Devolution would also give Nunavut a share of the royalty money generated by mining, and and oil and gas extraction.

NAM says a portion of those resource royalties should be invested in community governments. Except for tax-based Iqaluit, all other municipal governments in Nunavut are utterly dependent on the GN for money to pay for their operations.

And municipalities have no direct say in impact and benefit negotiations with mining companies,

But devolution talks have yet to start.

The GN has appointed Tony Penniket, a former NDP premier of the Yukon, to act as their negotiator, and has created a small devolution office within the Department of the Executive and Intergovernmental Affairs to work on the issue.

But Jim Prentice, the Indian and Northern Affairs minister, is still waiting to get a “negotiating mandate” from the federal cabinet.
It’s only after that happens that Prentice would be able to appoint a federal negotiator with a clear set of marching orders.

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