PARLIAMENT HILL, Ottawa—The Northwest Territories is about to get the keys to its economy in a sweetheart devolution deal with the federal government.
In an agreement government sources say could be finalized in two weeks, the territory will get legislative control over its burgeoning mining sector and half of the associated mining royalties.
It will also gain control over programs now controlled by the feds, with additional money to further develop those programs.
The increases will come without the territory losing on its transfer payment. That transfer was $1.1 billion in 2012-13 and accounted for 73 percent of the territory’s revenue, according to Finance Canada.
According to the NWT, its entire GDP topped $3.1 billion in 2011 with mining by far its biggest industry—33 percent compared to 12 percent for public administration, the next largest sector.
The feds hope the deal will take effect in just over a year, said Northern Development Minister John Duncan.
“It’s a tight timeline, but that is what we’re trying to achieve,” he said Wednesday.
Devolution has come in stages to the territory, with previous deals granting control over healthcare, forestry, social services, and more, but this final agreement will bring NWT as close to a province as it can get without the approval of the provinces themselves and other constitutional considerations.
“They will actually have considerable powers, province-like powers,” said Duncan.
The deal is based on the Yukon’s 1993 devolution deal, said Duncan, but a source in the NWT government said it is more generous than the Yukon deal.
In an earlier emailed statement, Duncan said the deal would help the NWT economy.
“The benefits of a devolution agreement are clear; Yukon signed a devolution agreement and now has one of the more robust economies in the country,” he wrote.
Under the deal, the territory can keep half its mining royalties to a maximum of five percent of its government budget. Last year that would have amounted to some $65 million. Anything over that amount would go the feds.
This final agreement will bring NWT as close to a province as it can get without the approval of the provinces themselves and other constitutional considerations.
With its budget increasing by about five percent annually, the territory could be keeping up to $100 million of mining royalties by 2020, said the NWT government source.
One quarter of that amount will be sent onto participating aboriginal governments. Of seven aboriginal governments, four have signed on to the deal. The remaining three could sign on at any time—although they have unsettled land claims, unlike those that have signed on.
The arrangement will require the two levels of government to work together on land and resource management.
The source said the government is confident devolution does not affect aboriginal rights or land claims.
The source also said the discussions with aboriginal governments, both those in support and those who have stayed out of the agreement, have brought all parties closer together.
The Epoch Times left messages with four of those aboriginal governments, including all three that remain out of the deal, but did not receive a reply by press time.
The change will see some 24 pieces of legislation and regulation be passed from federal to territorial control, where they may be modified to better suit NWT’s needs.
Under the deal, federal employees will be laid off with three months’ pay and offered comparable jobs with the territory. Contract workers may be hired, but not automatically.
The territory is expecting as much as $28 million in indirect benefits.
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