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By Rose Ragsdale
For Mining News 

N.W.T. devolution enters starting gate

Transition from federal to territorial management of resources could spark the next mineral exploration rush to Canada's Far North


Last updated 2/27/2011 at Noon

By signing a preliminary devolution agreement with the federal government Jan. 26, the Government of Northwest Territories has signaled that it is as eager for resource development as Yukon Territory, its neighbor to the west.

"This agreement brings us one step closer to devolution, to having province-like powers. With devolution, we will gain local management and control over our non-renewable resources," said the N.W.T. Industry, Tourism and Investment Minister Robert McLeod in a recent interview. "I think it was an historic moment. We're now a major player in anything that happens in Northwest Territories."

The Mackenzie Valley Resource Management Act is the federal legislation that currently governs the Mackenzie Valley, essentially all of the Northwest Territories except for the Inuvialuit Settlement Region.

During the next three years, the N.W.T. government will prepare legislation that mirrors the Act, and over time, the territorial government will transition into being the sole governing authority.

"Ultimately, we will make the decisions, and in the meantime, we will have this transitional arrangement," McLeod said.

Ready for the next mining boom

In practical terms, devolution is expected to spark a resurgence of resource exploration and development within Northwest Territories. Government and industry officials say the changeover should spur prospectors and explorers to accelerate the search for economic mineral deposits.

"The biggest reason detractors use for not investing in the Northwest Territories is the cumbersome regulatory process we have here," McLeod told Mining News.

He cited the recent explosion in mining activity in Yukon Territory as an example of what could happen in Northwest Territories. Yukon concluded its land and resources devolution in 2003.

"The Yukon has the hottest economy in Canada," he said. "We're excited. We're expecting the same thing that happened in the Yukon to happen in Northwest Territories."

Tom Hoefer, executive director of the NWT & Nunavut Chamber of Mines in Yellowknife, said it is reasonable to assume that Yukon Territory got a mineral exploration boom because devolution empowered its government to take steps that encouraged development.

Faster response time

Devolution is not new in Northwest Territories. Previous N.W.T. devolutions include health care, social services, education, administration of airports, and forestry management.

Though it is still several years from being finalized, the signing of an agreement-in-principle Jan. 26 is seen as a commitment by the N.W.T. and Canadian governments to move toward a final devolution agreement and as a key step in securing decision-making powers at the territorial level that will better reflect the values and needs of Northwest Territories residents.

The final devolution agreement will include the transfer of administration, control and management of land, water, mines, minerals and oil and gas in the Northwest Territories.

"When the federal government is in charge, it's a big elephant to move. It can work for you in that it provides stability, but it also can work against you because it takes the federal government longer to take action. That's a really big beast to move. The local government can be far more reactive to make changes when they are needed," Hoefer told Mining News.

McLeod shares this view. "We're a much smaller government than the federal government so we can respond faster and be responsive to the needs of the mining industry," he said.

The economic development minister said the territorial government will continue to pursue a responsible and balanced approach to resource development. "We will continue to work with mining toward responsible and sustainable development of the minerals resources in the Northwest Territories. We feel we're responsive to the industry's concerns, and we will continue to do so, while protecting the environment," he said.

Aboriginal support needed

Only two of Northwest Territories' seven aboriginal groups - the Metis and Inuvialuit, who have negotiated land claims and self-government settlements in the oil and gas-rich northwest corner of the Northwest Territories - signed the deal. The remaining five groups boycotted the signing ceremony and have appealed to Canada's Prime Minister Stephen Harper to overturn what they called a "secretive bilateral devolution negotiation."

However, federal Indian Affairs Minister John Duncan said the pact will not infringe on the rights of aboriginal negotiators or groups, but he could not say whether the full participation of all seven groups is legally necessary.

N.W.T. Premier Floyd Roland also said the devolution agreement-in-principle will not affect land claims or aboriginal rights.

Once the territorial government takes control, McLeod said N.W.T. officials will work with the aboriginal groups to gain their support.

"During the last Assembly, we had four of seven aboriginal groups sign on, but the (federal) government didn't think that was enough to move forward. This government felt differently. Two of seven signed on, and of the remaining five, two groups said, 'no' because it did not offer enough money," McLeod said. "We offered 25 percent of the revenue from affected resource development, and they said 50 percent. If it's just a question of the money, we can work through that. Two of the seven groups don't have settled land claims yet. We expect that as they settle their land claims, they will come on board and support the devolution agreement.

"With the signing of the devolution AIP, we all know the rules of the game have changed," he added.

Win-win for mining

If devolution is implemented with the support of all of the aboriginal groups, it will be very good for the mining industry, predicted John F. Kearney, president of the NWT & Nunavut Chamber of Mines.

"In the Yukon, the investment in mining has increased tremendously in the last few years, and many credit devolution for that," said Kearney, who also is chairman and president of Canadian Zinc Corp., which is currently developing the advanced stage Prairie Creek zinc-lead-silver project in southwestern Northwest Territories.

One of the highest-grade polymetallic deposits in the world, Prairie Creek has enough measured and indicated resources to support a 1,000- to 1,300-metric-ton-per-day mine for 10 years and nearly an equal amount of inferred resources. The project is located in an environmentally sensitive area of the Mackenzie Mountains, an area claimed by the Dehcho First Nation, which currently has no land claims settlement agreement with Canada.

Kearney said the territorial government would focus on enhancing the territory's resources, which would benefit its residents. Devolution would also give the N.W.T. government the opportunity to raise awareness of the importance of the mining industry to the territory's economy, he said.

"In principle, the mineral industry would be in favor of devolution. It would confirm and clarify the government's involvement and responsibilities," he said. "Right now, the responsibilities are split between the federal and territorial governments."

Kearney said he also believes it is necessary for aboriginal governments within the territory to become involved in the process. "They have to become a part of the go-forward plan," he explained. "I think it is very important that there is a strategic focus for resource development in Northwest Territories, and that focus could probably be stronger coming from the local governments."


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