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Editorial

February 1, 2002 - Arctic sovereignty: dead in the water

February 8, 2002 - Strength in numbers

February 15, 2002 - A second opinion on health projects?

February 22, 2002 - Another piece of lost power

February 1, 2002

Arctic sovereignty: dead in the water

Despite the noble intentions of its organizers, last weekend’s Ottawa conference on global warming and Canadian Arctic sovereignty was, ultimately, a sad and sometimes amusing exercise.

Sad, because some well-meaning participants still appear to believe in the possibility that Canada might yet be capable of asserting some degree of sovereignty over the waters of the Northwest Passage — or, at least, a form of sovereignty that’s capable of addressing the issues raised at the conference.

As various academics, lobbyists, consultants and others wrung their hands over the prospect that within 15 to 40 years, global warming will open the Northwest Passage to uncontrollable levels of international shipping, it took a senior military official to signal the obvious.

And that is that Canada is now well on its way to becoming an economic and military colony of the United States, utterly dependent on the U.S. to protect its borders, and a sovereign nation in name only. If current trends continue, it won’t be long before the Canadian government’s relationship with the U.S. resembles the Greenland government’s relationship with Denmark.

The compromise is always the same. Canada surrenders a certain amount of its sovereignty to the United States. In exchange, Canada receives guarantees of military security — provided at the expense of U.S. taxpayers.

Canada began surrendering its military sovereignty to the U.S. nearly 60 years ago. The Crystal II air force base at Iqaluit, built by the Strategic Air Command in 1942, was a result of such an early compromise. The NORAD agreement, under which the DEW line and North Warning System were built and operated, is a result of later such compromises.

The sovereignty-for-security compromise has allowed Canadians to sustain the hypocritical illusion that we are somehow nicer and more peace-loving than those nasty Americans, and, of course, morally superior to them. Meanwhile, U.S. money continues to do our dirty work for us, supplying Canadians with essential national security arrangements that we are either unable or unwilling to provide for ourselves.

Lt. General George Macdonald, vice-chief of Canada’s defence staff, this week served notice that we are about to enter into new compromises that will likely eliminate any possibility of Canadian Arctic sovereignty ever again becoming an issue over which the Canadian government has effective control.

On Jan. 28, Macdonald told a House of Commons committee that talks between U.S. and Canadian defence officials aimed at creating a "single command structure" for all land, sea and air forces in North America are well under way.

This sounds, essentially, like an expansion of the NORAD agreement, in which U.S. commanders operate North America’s continental defence system along with a few token Canadians. Since the U.S. pays for most of NORAD’s costs, this is not inappropriate. But if Macdonald is to be believed, it’s only a matter of time before the Pentagon will assume effective control of Canada’s armed forces, thereby cementing Canada’s status as a U.S. dependency, fully integrated into a Greater North America.

The carrot-haired Art Eggleton, Canada’s defence minister, told reporters afterward that "Canada will not surrender one ounce of sovereignty," but this is a hollow claim.

A few days earlier, General Macdonald told participants at the Ottawa Arctic sovereignty conference that if the United States were to be somehow blocked from using its base at Thule, Greenland, as a support site for its National Missile Defence project, loyal little Canada is willing to offer its base at Alert on Ellesmere Island as a substitute.

Why not? Canadian military leaders, whose budgets have been slashed numerous times over the past decade by cynical, poll-driven governments in Ottawa, have no choice but to ingratiate themselves with their U.S. colleagues. To ensure that Canadians play at least some role in the defence of the continent, they have no other options.

But what an illustration of Canadian powerlessness — a Canadian general offering a Canadian NMD site to the U.S. at a time when Ottawa is still officially undecided on the NMD issue.

So to hear conference participants calling on the Canadian government to "do something" about Arctic sovereignty is, as we said, sad and amusing. Many climatologists predict that the waters of the Northwest Passage — most of which are adjacent to Nunavut’s Arctic Islands — will be open to commercial shipping within 15 to 40 years.

But it’s clear that it won’t be the Canadian government that will protect the Canadian Arctic against polluters, smugglers and terrorists. It will be the U.S. government, essentially. Any Canadians involved in such efforts will be under U.S. command, and their work will reflect U.S. priorities.

Why should Nunavut residents care about this? When ore-carrying freighters begin to ply their way through the Northwest Passage, using ports such as the one proposed for Bathurst Inlet, it will be impossible for Canada to apply Canadian environmental laws, such as the Arctic Waters Pollution Prevention Act.

That’s because U.S. and most European nations consider the Northwest Passage to be an international waterway, not Canadian territory. Even if the Canadian government were willing and able to enforce Canadian law in the Northwest Passage, which it can’t right now, the international community wouldn’t recognize Canada’s right to do so.

That also includes Canadian laws, such as the Nunavut Act and the act giving effect to the Nunavut land claims agreement. It’s a certainty that the U.S. and Europe will not agree that these laws apply to the Northwest Passage.

The Inuit of Nunavut, who surrendered their aboriginal title to Canada in exchange for the increasingly dubious rights and benefits contained in the Nunavut land claims agreement, are in for a nasty surprise. They will soon discover that the government to whom they surrendered is powerless to protect Inuit sea-ice from the consequences of global warming.

JB

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February 8, 2002

Strength in numbers

Numbers. For some people, mathematicians for example, they’re as beautiful as sunsets over the ocean or piano concertos written by Mozart.

For most us, though, they’re an ugly nuisance, useful only when calculating the cost of groceries or the value of one’s pay cheque.

But those financial professionals who work with numbers, especially those who record and analyze the large amounts of public money that flow in and out of governments and other public institutions, perform a vital service.

That service is vital not only for those who work inside government, and those who sit in the legislature. It’s vital for all of us.

The most important policy decisions that governments get to make are decisions about how and where to spend our money. It’s the act of creating and carrying out its budgets that reveals a government’s true values and priorities. Those budgets also provide government with an opportunity to fulfill its main duty of trust — the duty to spend money only in the public interest, and only with the consent of the public.

The Nunavut government — in other words, Premier Paul Okalik, his seven ministers, and the 1,900 or so civil servants who take direction from them — owe the same duty to the people of Nunavut. To ensure that they carry it out, the 11 members who sit as regular MLAs are supposed to act as our watchdogs.

At any rate, that’s the theory.

In practice, it doesn’t quite work that way. There are various reasons for this, including the inexperience of many MLAs, the immaturity of the government, the weaknesses of the consensus system, human frailty, and the continuation of dubious practices inherited from the GNWT.

For example, by March 31, 2000, the government had already committed itself to spending $476 million in lease payments over 20 years — under agreements that have received no debate in the assembly and no public scrutiny. In 2000-1, the government entered into another $145 million worth of leases, again, with no public debate by MLAs and no public scrutiny.

The government is now contemplating operating leases for three badly needed health facilities in Cambridge Bay, Rankin Inlet and Iqaluit, in processes that, until this point, have received little scrutiny from MLAs or the public.

Putting all that aside, however, one major reason, exposed in the auditor general of Canada’s first report on the Nunavut government’s public accounts, is that the Nunavut government does not have enough qualified financial workers. That ranges from accounting clerks, whose job is to enter information into computers, to trained professional accountants, who require up to seven years of training before they can be considered qualified to do their jobs.

Sheila Fraser, Canada’s auditor general, told members of the legislative assembly’s standing committee on government operations this week that the Nunavut government’s shortage of trained accountants is the most serious shortage.

"Until it has the right kind of trained accountants throughout Nunavut, the government’s financial management systems and processes will be at risk," her report says.

As in nursing and other professions, Nunavut must compete with the rest of Canada to find qualified accountants. Since there is a nation-wide shortage of accountants, the Nunavut government has been unable to find staff for jobs that must be filled by accounting professionals.

Bob Vardy, Nunavut’s deputy minister of finance, says the government does not dispute Fraser’s opinion about the shortage of qualified financial staff. He said the government has advertised some jobs twice without being able to find qualified people to fill them.

Vardy said that staff shortages have even hampered the finance department’s ability to develop new policies. For example, in response to a question by Nanulik MLA James Arvaluk about suitable tax policies for Nunavut, Vardy said the government’s difficulties in recruiting a manager of taxation has prevented it from moving on the issue.

Another serious problem created by the government’s financial staffing shortage is that it’s making decentralized government functions more difficult to manage. One unintended consequence of dividing government functions among 11 widely scattered communities is that inexperienced managers are now working in relative isolation, without the support they would otherwise expect to get within a more centralized system.

Fraser told MLAs this week that decentralization requires that strong, experienced financial managers be located in the decentralized communities. "[T]he government needs to ensure that it has the people it needs — in all areas, including financial management — to make sure that decentralization plans work," Fraser said.

For the public, and for regular MLAs, the most serious consequence of financial understaffing is that the public and MLAs will not get financial information in time to help the government make good decisions about how to spend its money. The deputy minister admits that staff shortages have already caused some government departments to miss financial reporting deadlines, and said that’s why annual reports for several Crown corporations and other agencies haven’t been produced on time.

But where there is chaos, there is opportunity. For Nunavummiut who want to pursue accounting careers, the opportunities appear to be limitless.

The deputy minister of finance says his department is already working with the department of education and Nunavut Arctic College to provide more financial training to Nunavummiut. The government should do what it can to strengthen and expand these efforts. This should include a review of how arithmetic and mathematics are taught within the K-12 system.

Nunavummiut, especially young Nunavummiut, can help too. You can pursue accounting or financial management as a career, and learn to develop the desire and self-discipline it takes to become a chartered accountant.

Any takers?

JB

February 15, 2002

A second opinion on health projects?

It was in 1997 when the government of the Northwest Territories first announced that the Qikiqtaaluk Corporation would build and then lease-back a replacement Baffin hospital in Iqaluit.

The chair of the Baffin Regional Health Board, Ann Hanson, reacted by declaring that she was opposed to the idea, and that she couldn’t support the use of private money to build a public health-care facility.

Suddenly, the project was in trouble. So the government, backed by the Iqaluit Chamber of Commerce, whose members were salivating over the prospect of landing various juicy sub-contracts on the $30-million job, acted swiftly.

Hanson and an executive director who shared Hanson’s point of view were pushed out. To replace them, the GNWT appointed former premier Dennis Patterson to chair the board, and veteran bureaucrat Ken MacRury ended up as executive director.

The project got back on track — or so we were led to believe.

The GNWT went on to sign "service agreements" with all three birthright development corporations in Nunavut, with the tacit understanding that each of these corporations would eventually build and lease new health-care facilities in their respective regions.

At the time, it looked like a brilliant solution. Ottawa had slashed base funding for territorial governments and withdrawn billions from its annual health-care contributions to provinces and territories. In turn, the territorial government slashed its own spending, including its once-generous capital budgets for Nunavut. It seemed obvious that the GNWT didn’t have the cash to pay for expensive new health-care structures, and equally obvious that Nunavut wouldn’t have that kind of money either.

So the idea of getting private developers to build these structures, and then have the territorial government use public money to lease them back through payments scheduled over 15- or 20-year periods, looked like the only way.

Build now, pay a little bit every year — the only solution. The nearly forgotten incident involving Ann Hanson shows how strongly the territorial government was wedded to this concept, and to no other option.

But now, thanks to the auditor general of Canada’s analysis of the Nunavut government’s leasing practices, Hanson’s warning about the use of private developers now look like valid concerns that the territorial government should have paid attention to.

For example, the auditor general’s report points out that, until now, the territorial government never bothered to figure out whether leasing made sense, and never bothered to compare leasing with other options.

"Management informs us that the government has not established any formal objectives for deciding to lease or buy, depending on which is cheaper," the auditor general wrote.

That means that for all these years, neither the GNWT nor the GN ever compared the lease-back option with other ways of supplying new health-care facilities. Leasing may sound attractive, but if it’s not done right, governments can end up spending two or three times more than if they had constructed the buildings with their own cash.

For example, would it be cheaper for the government to borrow the money and build the projects itself? Would it be cheaper for the government to pay cash for some parts of these projects, borrow money for others, and lease the rest?

No one ever knew, or bothered to find out.

The GNWT did hire an independent consultant called Med-Emerg to study the territorial health-care system in 1996 and 1997, through a sole-sourced contract that cost $700,000. One MLA dismissed the study as a "$700,000 doorstop." The Med-Emerg report recommended using birthright development corporations to build and lease back the three structures, but offered little analysis in support of this conclusion.

But now, the government of Nunavut has been more or less shamed into doing what territorial governments should have been doing from Day 1. Nunavut deputy ministers now say they’re taking a close look at all three hospital projects, and promise they’ll compare the cost of leasing with other options, such as borrowing or paying cash.

The deputy minister of finance even told a legislative committee last week that they’ll look "very, very closely" at the purchase option, and at various combinations of borrowing, paying cash and leasing. We hope that this time, MLAs get a chance to see this information before voting to approve spending on the three health projects — if the facilities are ever built, that is.

Until now, members of the Nunavut legislative assembly, and the Northwest Territories legislative assembly before them, have been approving sometimes dubious long-term leases without even knowing what they were voting for. Lease payments have not been included in the government’s capital estimates, and instead, have been buried in the main estimates as O&M spending.

"Lease payments could raise the total cost of capital projects to an unaffordable level, without anyone noticing the problem," the auditor general wrote.

Because these leases usually cover 20-year periods, this means that the legislative assembly has, in effect, been authorizing spending on behalf of governments that haven’t been elected yet. For example, in 1999-2000, they committed the current government — and future governments — to about $467 million in lease payments. In 2000-1, they committed future governments to another $145 million worth of long-term leases.

Privatization doesn’t look like such a brilliant option anymore — especially when it’s revealed that on at least one lease, the government will spend 50 per cent more than it would have cost to build the structure with its own cash. At least one developer will be laughing all the way to the bank for the next 20 years.

We now know that the three hospital projects would add at least another $80.1 million to the Nunavut government’s total lease commitments, and probably more.

Given all this, the government cannot afford to write blank cheques to the Qikiqtaaluk, Sakku and Kitikmeot corporations and trust them, on blind faith, to build affordable health care structures that we will all end up paying for over the next 20 years.

There are other ways of doing the work, and other ways of ensuring that Inuit workers obtain benefits from that work. The government must look at all options, then choose the one that’s in the best interests of Nunavummiut, whether or not it’s politically convenient.

Finally, none of the three health projects should go forward until MLAs have enough financial information before them to make informed decisions on our behalf. Anything less would be a gross violation of the public interest.

JB

TOP

February 22, 2002

Another piece of lost power

Because Bill C-33 isn’t in front of the House of Commons anymore, we’re not likely to hear much about it until it’s proclaimed and becomes the law of the land.

That’s too bad, because the Inuit of Nunavut deserve to know more about the bill, and the little piece of power that it removes from the Inuit of Nunavut and hands over to the minister of Indian and northern affairs.

Bill C-33, as many readers may know, is a proposed law affecting two important public bodies created by the Nunavut land claim agreement: the Nunavut Water Board and the Nunavut Surface Rights Tribunal.

The land claim agreement requires that the federal government pass such a bill.

This is actually Ottawa’s third attempt to bring the bill through Parliament. The first attempt, in 1996, was withdrawn because Nunavut Tunngavik Inc. objected to parts of the bill, saying they were inconsistent with the Nunavut land claim agreement.

Their second attempt, a bill introduced in December 1998, got first reading, but died when the Prime Minister dissolved Parliament to call an early election in the fall of 2000.

The latest one made it through third reading in the House of Commons last fall, and is now waiting for third reading in the Senate. It’s only a matter of time before Bill C-33 becomes law.

When that happens, disputes over who’s in charge of water licencing in Nunavut will come to an end. From now on, it will be clear who’s boss — and that’s the minister of Indian and northern affairs.

That’s because the act states that all water licences issued by the Nunavut Water Board are subject to the approval of the minister. The Nunavut land claim agreement doesn’t say this must be so — Ottawa added this requirement more or less unilaterally.

Because of an amendment put forward at the committee level by Nunavut MP Nancy Karetak-Lindell, this ministerial veto power is now somewhat mitigated.

Thanks to Karetak-Lindell, Bill C-33 now contains words that set a time limit on when the minister may veto a water licence. Her amendment states that the minister must make a decision on a licence approval within 45 days, and may extend that period for another 45 days if the board is notified.

If the minister doesn’t supply the board with a written decision within either 45 or 90 days, then the licence in question is deemed to be approved.

Don’t blame Karetak-Lindell for the weaknesses in the bill. Within the constraints of the party system, she worked as hard as she could to improve it on behalf of her constituents. And her amendment at least requires the minister to supply his reasons in writing — which is important if some group were to launch a legal challenge against a ministerial veto.

But the fact remains that every time the Nunavut Water Board issues a water licence containing provisions the federal government doesn’t like, the minister has the power to kill the licence.

Indian Affairs Minister Bob Nault’s speech to the House of Commons last fall, made when the government introduced Bill C-33, exposes the federal government’s real attitude toward the Nunavut land claim agreement. A simple deconstruction of the language he used in that speech reveals that Ottawa has little real interest in Inuit rights.

Consider this:

"The certainty created by the act will encourage investment."

Translation: "Developers need not worry that environmental standards will get in their way."

And this:

"These institutions will ensure that residents of Nunavut have a say in decisions about the use of water resources, the deposit of wastes and access to lands throughout the territory. Their role will be to balance the role of many stakeholders.…"

Note the absence of the word "Inuit." Also note the absence of the phrase "decision-making power." In Ottawa’s view, the purpose of the water board is merely to provide a "say" in decisions — decisions, which, presumably, are made by someone else, just as they were in colonial times.

In November 1992, when Nunavut’s Inuit land claim beneficiaries voted yes to the idea of surrendering their aboriginal title in exchange for the rights and benefits set out in the land claim agreement, they weren’t voting for a continuation of the status quo — they voted for change. They did so on the understanding that public government management bodies such as the Nunavut Water Board would give them decision-making powers over the entire Nunavut settlement area.

But in the end, that’s not what the Inuit got. As Peter Townsend and the Who said 30 years ago: "meet the new boss, same as the old boss."

JB

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