OTTAWA | February 15, 2013

Northwest Territories in control of its own environment

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Environmental stewardship of the Northwest Territories is about to change hands, as the federal government prepares to devolve its control of resource management to the territorial government.

Traditionally governed by federal legislation, the territory has been in devolution talks with the Canadian government for the last 40 years. Past negotiations have slowly shifted power over healthcare, education, and forestry from federal to territorial control.

Northern lights
The one part of the environment that territorial government won't control.

Resource management is the final chunk of legislation to be devolved to the territory and by far the most complicated. A total of 24 federal acts will have been rewritten when the agreement, due to be signed in the next few weeks, takes effect on April 1, 2014.

Developing the North

The agreement promises half of all the royalties from mining, oil, and gas developments will go to the territory up to a cap of five per cent of the territorial government’s annual spending. With this year's royalties at approximately two per cent of the territory's total spending, there is room for growth. 

The NWT’s premier Bob McLeod says he expects the territory would receive $65 million in 2014, which his government will put towards social programming. 

Petra White, communications manager for the government of the NWT, says the region desperately needs the funds. Resource developments will help bring jobs to communities and the royalties will pay for community infrastructure, she says.

White stresses that decisions to go ahead with resource development projects, like mines, need to balance financial benefit with environmental risks – important to an aboriginal population whose livelihoods are connected to the land. 

The Northwest Territories’ population of 43,000 is nearly half aboriginal and she describes the Northern culture as “land is life.”  Instead of officials in Ottawa, devolution would allow the people living in the NWT to make decisions about which projects should happen on their land, says White. 

Decisions will also be weighed differently by the territorial legislature now that it will be responsible for the entire life-cycle of project costs from development to clean-up, according to Arctic chair of the Natural Sciences and Engineering Research Council Chris Burn.

The territory’s budget is smaller than the federal government’s so mitigating the environmental risks of an abandoned mine could cause devastating costs, he says. Most mine clean-up costs are a few million dollars, which could be more than the territory could afford.

“Locals have a lot more to lose if something goes wrong, so they are likely to be more cautious, but there’s always the temptation to go for the economic development,” Burn says. He assumes resource projects will be evaluated and monitored to prevent that kind of disaster.

As development continues the territorial government will need to increase its number of inspectors and spend more on innovative monitoring technologies, but he says citizens are always unhappy to see a government grow.

Mackenzie Valley Resource Management Act

Some aboriginal and environmental groups are concerned that the new devolution agreement will not transfer the Mackenzie Valley Resource Management Act, as the act is undergoing changes by the federal government.

Aerial view of the Mackenzie Valley
Lots of talk but not much development in the Mackenzie Valley.

The territory will be delegated authority to make decisions about how resource projects are monitored and approved in the Mackenzie Valley, but the final say will still rest in Ottawa, while the act is under review.

The proposed changes are intended to add efficiency because they would collapse the regional management boards into one resource ‘superboard’ located in Yellowknife.

One aboriginal group, the Tlicho Government, has not signed the devolution agreement because they will have less representation on the 'superboard,' according to Shauna Morgan of the Pembina Institute, an environmental consulting and advocacy organization with an office in Yellowknife.

The discussion of large projects, like the Mackenzie Valley pipeline and who controls the Arctic’s offshore resources are being left out of these negotiations to hasten the devolution agreement. 

Devolution facts
  • Devolution: The initiative will move administration and control of Crown (public) lands, resources and waters in the Northwest Territories (NWT) to the Government of the Northwest Territories (GNWT) from the Government of Canada.
  • D-Day: Devolution Day April 1, 2014. On this day the territorial government expects the final devolution agreement on resource management to take effect.
  • Jobs: The GNWT expects a few hundred new jobs will be created to fill the needs of an industry centered in the territory, with local businesses offered contracts previously held in Ottawa. In addition, 175 Aboriginal Affairs and Northern Development CanadaAANDC (AANDC) employees currently based in the NWT will be offered the equivalent of their job with the territorial government.  
  • Royalties: Payments to the government based on a percentage of revenue made by resource companies. Therefore the more development there is, the more money the territory earns. 
  • Yukon: In 2003, the control of resources and water mangement was shifted to the Yukon. 

Source: Government of the Northwest Territories

By the numbers
  • $65.3 million: An annual payment from AANDC to cover social programming and infrastructure. This amount will increase every year. 
  • $1.1 billion: This year's transfer payment from the federal government. These payments will continue after devolution and make up a significant portion of the NWT's revenue. Territories receive much higher transfer payments per capita than the provinces.
  • $28 million: Devolution is expected to generate $28 million annually from business opportunities for NWT residents.
  • $26.5 million: The amount the federal government will give the GNWT after the final agreement is signed to help with the post-devolution transition.
  • $65 million: With devolution in place, this is what the GNWT estimates it would have kept in royalties from the 2011-2012 fiscal year.

Source: Government of the Northwest Territories