Current ads
Jobs
Tenders
Notices
General

Click below

Hamlets: We want share of mineral resource money

A NAM with a plan?

JIM BELL

No one wants Nunavut to ever endure another Nanisivik.

So when the last of Nunavut’s next wave of new mines closes down, decades from now, Nunavut’s municipal governments want to make sure that this time, the benefits last longer than the mines.

The only way to do that, they say, is for Nunavut’s municipal governments to get a piece of the action after the Government of Nunavut strikes a resource-revenue sharing deal with Ottawa.

“Non-renewable resources represent the greatest potential for sustainable economies in Nunavut communities,” reads part of a lengthy motion passed last week at the annual meeting of the Nunavut Association of Municipalities in Cambridge Bay.

Through a process now known as “devolution,” the GN wants Ottawa to give Nunavut two big province-like functions:

• the power to licence and permit mining, oil and gas companies operating on public land; and
• a share of the cash that Ottawa extracts in royalty payments from mining, oil and gas companies.

It’s this royalty cash that Nunavut’s municipalities want a piece of, saying it’s the only way to avoid what happened to Arctic Bay after the Nanisivik zinc mine closed down.

NAM does not, however, want a place at the negotiating table. But they do want a strong voice in planning how any new resource money would be invested.

Since 2004, Premier Paul Okalik has promised that Nunavut will get a devolution deal with Ottawa before the next territorial election — which means 2008 or early 2009.

Though the GN has appointed Tony Penniket, a former NDP premier of the Yukon, to act as their negotiator, and created a small devolution office within the Department of the Executive and Intergovernmental Affairs, formal talks on devolution have yet to begin.

But that hasn’t stopped Nunavut’s municipalities from forging ahead on the issue.

They’ve hired a consultant, Russell Banta, to research the issue and help put together a strategic plan that they will urge the GN to adopt.

Banta’s research shows that in its 25-year life span, the owners of the Nanisivik mine near Arctic Bay extracted about $1.7 billion worth of zinc, lead and silver.

But “there are few lasting benefits for the people of Arctic Bay,” his report said.

He said the Nanisivik mine did provide about $1 million year in wages paid to Arctic Bay residents, along with some valuable training and work experience.

But he points out that many of the skills learned at the mine — carpentry, machine operation, some other trades — are not the kinds of skills that Arctic Bay now needs for community development.

“What are needed are entrepreneurial skills, administrative skills, research capabilities, people skills,” Banta said, pointing out that the mine “had remarkably little impact on building skills in these areas.”

To prevent this from happening again after the next wave of Nunavut mines runs its course, NAM says Nunavut needs a strategic plan for ensuring that the financial benefits of mining are invested for the future.

That plan, NAM’s resolution states, would include the following principles:

• the financial benefits of resource development should be “fairly shared” among three levels of government: municipal, territorial and federal;
• the municipal share of resource revenues should be allocated “equitably” among communities, but those communities facing the greatest impacts from mining should get “supplemental” funding;
• the GN and municipalities should look at the idea of putting a portion of resource royalties into a heritage trust fund, that could be used to provide benefits long after mines have closed;
• the GN and municipalities must collaborate on strategic planning for resource development;
• all orders of government must plan for sustainable communities.

And if Nunavut’s weak, cash-strapped municipal governments were to gain their own revenue stream, it would lessen their dependence on the GN. Except for tax-based Iqaluit, Nunavut’s municipal governments are completely dependent on the GN for money to pay for their operations.

Right now, it’s impossible to say how much new money Nunavut would get through a resource-royalty sharing agreement with Ottawa.

But if Nunavut’s devolution agreement turns out to be like Yukon’s agreement, it won’t be worth much, and the GN may not get much cash to split with the municipalities.

In a report submitted to the Council of the Federation — made up of all territorial and provincial premiers — a panel of experts found that the Yukon’s devolution deal is so weak it should be re-negotiated, and is a “poor model for both Nunavut and the NWT.”

That’s because Yukon only keeps its first $3 million in mineral resource royalties, and anything it receives after that is deducted from the annual grant received from Ottawa.

This means Yukon only gets eight to 10 cents of every resource revenue dollar.

In an interview with Nunatsiaq News, Banta said it’s not realistic to expect that Nunavut would get anything close to 100 per cent of resource royalties.

What’s essential, he said, is to plan for the future — and to put resource money into a fund that will exist after the miners have all gone home.

TOP

Advertising
Specs, rates,
& maps
Multi-paper
buying services
About the market
E-mail ad dept

More Information