N.W.T. devolution could bring territory $65M in yearly royalties

Prime Minister Stephen Harper shakes hands with Northwest Territories Premier Bob McLeod in Yellowknife, N.T. on Monday, March 11, 2013. (Patrick Kane / THE CANADIAN PRESS)

The Northwest Territories appears poised to take full control of its own land, water and resources for the first time, after Prime Minister Stephen Harper announced plans Monday for a "devolution" of power from Ottawa to Yellowknife.

The natural resource royalties are expected to bring in about $65 million a year for the territory, of which 18 per cent will go to the five aboriginal governments that have signed on to the deal.

Ottawa will transfer another $65 million to the territory to compensate it for the cost of managing its new responsibilities, including transferring the salaries of federal bureaucrats to the Northwest Territories’ payroll.

"Once fully implemented... this agreement will give the Northwest Territories greater authority and control over Crown lands, the power to make resource management decison for those lands and also the power to collect royalties from those lands, royalties that will be used to invest in infratructure projects, in health care and in education," Harper said.

He was joined by Health Minister Leona Aglukkaq, Aboriginal Affairs Minister Bernard Valcourt and a number of other northern leaders in Yellowknife for the announcement.

The deal effectively means Ottawa will no longer have the power to approve or reject oil, gas, pipeline or mineral projects in the territory. Such initiatives will now be the sole purview of the territory, which will also receive a larger portion of revenue from such agreements that could amount to hundreds of millions of dollars.

The Yukon signed a similar agreement roughly a decade ago, which Harper said led to major growth in the territory's economic growth. He said the Northwest Territories has the same potential.

"Our government believes the opportunities and challenges here would be better handled by the people who understand them best. That is to say you who live here in the Northwest Territories, whenever possible, you should be the ones making decisions about regional matters," Harper said.

The agreement was not unexpected. Ottawa and Yellowknife signed an agreement-in-principal in January 2011 "to enhance the ability of the Government of the Northwest Territories to serve the interests of its constituents and to promote the effective, efficient and co-ordinated management of the public lands, waters and resources of the Northwest Territories."

In the more than two years that have passed since then, federal and provincial negotiators have worked out the details of the agreement, and signed a joint declaration Monday formalizing the agreement.

The change won't happen immediately. Though the framework appears to be set and the terms largely agreed upon, the public has not yet had a chance to weigh in on the change.

The period for public engagement and aboriginal consultation is expected to last for 40 to 60 days, and the transfer of responsibility will happen in the spring of 2014.

While there are no downsides to the devolution process, it’s a “work in progress” and there are concerns about how the territorial government will handle additional responsibilities, former Northwest Territories premier Stephen Kakfwi told CTV’s Power Play.

“(The government) has to send out a message and show that it’s really going to take a mature, balanced, visionary approach to governing the North with the First Nations up here,” he said. “I think they are a little falling short of the mark right now.”

Kakfwi said not all First Nations groups are onside with the proposed changes, partly out of environmental concerns, and the government must ensure that all groups are in agreement by the time the devolution deal is finalized.

The move to transfer more powers to the territory appears to fit with the federal government's efforts to streamline natural resource project approvals and reduce the layers of government approvals that have been required in the past.

In last spring's budget, the government outlined a "one project, one approval" plan to reduce red tape that often slows down major projects for years.

Harper said Monday it’s hard to determine how devolution will affect the federal budget.

“It’s difficult to say the precise value of the transfer because it depends particularly on resources in the mining sector,” he told reporters. “The formula in the agreement allows for the province to keep 50 per cent of those additional resource interviews, up to five per cent of its gross revenue base.”

But, he said, that’s a “relatively small amount” in comparison to the territorial financing formula.

With files from Andy Johnson and The Canadian Press