We're delighted, Premier, to have you here with us this morning, as well as Deputy Premier Miltenberger and Mr. Vician.
It's good to see you again, Mr. Vician.
Members, witnesses, and guests, this is in fact the 38th meeting of the Standing Committee on Aboriginal Affairs and Northern Development. We are in the course of consideration of the barriers and opportunities in regard to the advancement of northern economic development, certainly for the great outcomes that brings, but also for northerners in general.
This is the second of our three-city visit to the north. We were two days, yesterday, in Yukon, and starting here today and tomorrow in Yellowknife and the Northwest Territories.
We'll begin as is customary. We have just the three of you here. We may have a fourth joining us, but we'll be seeking Mr. Gruben's interest in possibly moving Mr. Gruben to the second panel, so it will give us a little bit more time.
Premier, we're delighted to have you here again. We'll give you some latitude here in terms of time. We customarily have five-minute presentations each. It's my understanding that each of you would like the opportunity to speak to the committee.
With that, we'll get under way.
Premier Roland.
:
Good morning, and welcome to Yellowknife.
Members of Parliament, chair of the committee, committee members, and staff, I am Floyd Roland, Premier of the Northwest Territories and Minister of Aboriginal Affairs and Intergovernmental Relations.
I would like to welcome you all here to the north, and I want to thank you for venturing outside of the nation's capital to speak to northerners on our turf. We do appreciate your attending here today, and we hope the stories you take home with you will shape your thinking about our home, our people, and our land.
You've asked three departments of the Government of the Northwest Territories to speak to the committee today about the barriers and solutions to northern economic development.
I am pleased that my colleague, the Honourable Michael Miltenberger, Minister of Environment and Natural Resources, and Mr. Peter Vician, Deputy Minister, Industry, Tourism and Investment, have joined me today to contribute to this important subject area.
I believe it's fair to say that Canadians, and in fact the international community, have realized the importance and significance of the north and our tremendous economic potential, our vast landscape, our breathtakingly beautiful geography, our cultural diversity, and our unique political system.
I am also reasonably certain that your briefs included a mention of the NWT's comparatively high cost of living, the persistent socio-economic gaps between aboriginal and non-aboriginal northerners and between those living in urban versus rural and remote communities, and the infrastructure deficit we experience in the vast territory we call home.
You'll know we have both enormous opportunity and enormous challenge. In order for us to ensure that we do not squander the opportunities, our governments will need to do a lot better at working together towards a comprehensive plan for the NWT, one that is developed by northerners and supported by Canada, a big picture plan that guides our various initiatives and policies, particularly around land management, the creation of national parks and conservation areas, and the negotiation of government systems through land, resources, and self-government agreements.
Such a comprehensive plan—which, I put to you, does not currently exist—is absolutely necessary to create the right conditions for northerners as well as Canadians from coast to coast to coast to benefit from economic development north of 60.
A key element of such a comprehensive plan is the finalization and full implementation of land resources and self-government agreements. The negotiation and implementation of aboriginal rights agreements in all of the NWT's regions are absolutely necessary steps in ensuring aboriginal people have the tools to fully participate in the NWT and Canadian economies.
Equally important is that all parties to these negotiations are guided by the principle of negotiating workable, affordable, effective structures of government at the community and regional levels and supporting, not duplicating, existing regulatory land and resource management regimes.
The NWT currently has three settled land claims agreements, Inuvialuit, Gwich'in, Sahtu; one land claim and self-government agreement, the Tlicho; and one treaty entitlement agreement, Salt River.
We still have a way to go. There are lands, resources, and self-government negotiations taking place in all regions of the NWT. There are also transboundary negotiations with the Na-Cho Nyak Dun of the Yukon and the Manitoba and Saskatchewan Denesuline, who have asserted rights north of 60.
The Government of the Northwest Territories is an active party to all these negotiations, as we support the settlement of all outstanding aboriginal rights in the NWT. We do so because we want to be a part of rectifying historic wrongs and because we know from experience that those who have settled land claims in the NWT have the tools necessary to fully participate in large-scale economic development initiatives.
It is no coincidence that those regions with settled land claims have fully supported the proposed Mackenzie gas project, largely because they have a direct stake as part owners of the project and benefit directly from its success.
The need to have a stake in decisions that affect us holds true for northerners generally. We want nothing less than what most Canadians already have. We want to make the decisions over NWT land and resource management and ensure we benefit from the development.
We must continue to work together with the federal government and with aboriginal governments to achieve the long-overdue devolution of legislative authority over land and resources from Ottawa to the north. Without this authority, we will have little power to influence or control NWT land management decisions to ensure that more of the benefits from resource development accrue to NWT residents.
There is no reason that we are trusted to run our health care system, our education systems, our transportation systems, and all the other devolved jurisdictions we have, but not to have jurisdiction over one area that could bring our governments revenue to support these programs and more.
Devolution creates a stable climate for industry and investment by providing clarity around land ownership, land management, and who needs to be consulted when and by whom, but devolution takes political will, the will to give northerners a fair share of the resource revenues made from their land. I am confident that the settlement of land claims and the agreement on devolution will bring about the required certainty regarding NWT lands, resources, and governance and create the right conditions for the NWT's economy to be developed in such a way as to create jobs and business opportunities for Canadians, aboriginal and non-aboriginal, living north and south of 60.
The settlement of land, resources, and self-government agreements takes time. It takes time because so much is at stake and because the issues on the table are complex and numerous. If we are not careful now, at the design stage, we may create a governance regime in the NWT that lacks the capacity to serve its citizens and to create the necessary conditions to support balanced and sustainable economic development. It is now, before the ink is dry, that we need to ask ourselves a number of questions: are we creating the right conditions for mutually respectful and productive government-to-government relations between public and aboriginal governments? Do aboriginal governments have the capacity to fully implement their self-government agreements? Who pays for self-government? Will the NWT's government system be more streamlined, or crippled by too much government?
I respectfully put it to you that we have not worked hard enough to find answers to these questions. For example, the issues of self-government financing and of capacity-building in emerging aboriginal governments have not been resolved. Our government has raised these issues countless times with various federal departments, but there is little indication that there is a willingness to find solutions.
The fix, gentlemen, is not punting these important issues or leaving them to the Government of the Northwest Territories and NWT and aboriginal governments to sort out long after agreements have been signed.
The successful conclusion of aboriginal rights agreements, devolution agreements, and resource revenue-sharing agreements is required for the NWT to reach its full economic potential. What is needed is a recognition and acceptance by Canada of its traditional policy objectives of effective public government and recognition of aboriginal rights in the NWT. How we give meaning to these policy objectives should be described in a comprehensive plan for the NWT, one developed here in the NWT and supported by the Government of Canada. We invite Canada to assist us in striving toward our goal: a prosperous north that embraces aboriginal rights, puts northerners in charge of decisions that affect them, and places the NWT in its rightful place in Confederation.
Thank you very much.
:
Thank you, Mr. Chairman.
We're here today talking about an issue that to most of you is possibly a political or academic discussion, because this is something you've never had to fight for. The premier and I have now been at this table or these types of tables going on 15 years, pushing and fighting for devolution and resource revenue sharing. We're here yet again to raise this issue, as the premier has done so succinctly in his statements.
It's simple. We want to have the authority in the north to make decisions about what's happening in the north, about the type of development, the conditions, the systems. We want to manage and govern resource development. Right now, there is overlap. There is confusion. There is uncertainty. As a government, to add some detail to the premier's broad statements, we've been continuing to work for devolution.
While we are moving in areas where the legal authority lies with the federal government, we are using what we see as our political and moral authority to start getting our house in order. We just recently released our water strategy, which is going to lay out how we want to deal with water as it affects us in the Northwest Territories and as it affects us as inhabitants of the Mackenzie River basin, including Alberta, B.C., Yukon, Saskatchewan, and the Northwest Territories. We're working on a land use framework that is going to get our thinking clear and focus our policy as it comes to land use. We fully support the push by McCrank for land use planning. To underline the premier's comments, the federal government has no plan that we have seen or that they have shared with us. They come north on a park by park, resource development by resource development approach, often with little consultation, to impose in many cases what they have decided in Ottawa is good for us. While we may not always disagree, the process thoroughly chafes, I can tell you.
We are continuing to work on issues that are very important to the people here, such as the Species at Risk Act and the Wildlife Act. We've put forward what we think is a very reasonable proposal for regulatory reform that will recognize that we have a system designed by the federal government that has some flaws that can be fixed.
To give you some very fundamental examples, we do not even have the authority to appoint our board members to the regulatory boards that exist here. We have to make recommendations to Ottawa, a process that can take up to a year. We constantly fight quorum issues. We constantly struggle over policy areas that are grey, mandates that are not clear. These are all things that could be clarified if there was the will in Ottawa to do so.
We've offered these suggestions to the government. We are working with the boards. We're working with the aboriginal governments to come forward with an even more defined package when it comes to those types of issues.
You also can't separate economic development from the environment up here. We're a resource-based economy in a very sensitive, often fragile, ecosystem, and we are being hugely impacted by climate change. We need to be able to deal with those issues, as they are related. Right now, we often don't have that authority, and it's very difficult.
There's a huge concern about how we do development. We have around us examples of things that have gone wrong in the past, and I'll just point to one example. Just out the door here, a kilometre or so away, is Giant Mine, where we have 320,000 metric tonnes of arsenic trioxide stuffed into mine shafts that we're going to freeze because we don't know what else to do with it. It's going to cost an enormous amount of money to do.
We have in our backyards examples of what happens when things go wrong when there's not sufficient involvement of the local people. As the premier indicated, we work in partnership with the aboriginal governments on a lot of these broad issues so that we can move forward together.
Our strategy for water is called “Northern Voices, Northern Waters” for that very reason. It's to symbolize that connection. As we sit here today once again making a case to Ottawa, it's a very simple message.
This government has about two years left in its term, and we would very much like to see the yardsticks on this issue finally advanced. It's been a very difficult process. In our terms, I think we've lived through three separate cycles of different federal governments; we tell the same story and make the same case, along with the aboriginal governments, and now it's your turn.
We're glad you're here. We hope this will have some positive effect as you take what you've heard from us back to Ottawa.
Thank you.
:
Thank you, Mr. Chairman.
Good morning, committee members.
Thank you for giving the Government of the Northwest Territories the opportunity to appear before you to talk about its perspectives on critical issues facing Canada's Northwest Territories.
On behalf of my minister, the Honourable Bob McLeod, Minister of Industry, Tourism and Investment, I also want to thank all of you for coming to this vibrant and beautiful place we call home. I'm pleased to have the chance to address the committee and to answer your questions.
I'm here today to highlight the key economic drivers and opportunities affecting the Northwest Territories. It's a territory that covers a huge area of Canada and has a small population scattered across 33 communities. Specifically, I'm here today to provide recommendations to this committee regarding our government's priorities and direction for a vision of a healthy and prosperous Northwest Territories in a strong and sovereign Canada.
When I last addressed the committee in April, I provided a broad perspective, plus some background and details on economic development in the Northwest Territories, the state of our economy, our needs, and our recommendations on how to meet those needs. Today I will dig deeper and provide more specifics on a number of key initiatives in both the renewable and non-renewable sectors in the economy, initiatives the government believes will go a long way towards creating that healthy and prosperous NWT I spoke about moments ago.
The development of renewable energy resources is one area our government is focusing on. Many of our communities rely on diesel fuel for power generation, and the cost is astronomical in the Northwest Territories, particularly in many of our remote and small hamlets, villages, and towns. The price of electricity in diesel-powered communities can range from 50¢ a kilowatt hour to well over $2 a kilowatt hour in places like Colville Lake, an off-road community with a population of 125 people. The annual power bill for a small community store in the community of Nahanni Butte is in the range of $80,000 a year. I suspect most of you pay less than 10¢ per kilowatt hour for your electricity. These prices for power are crippling our residents and our businesses in the north.
Investing in renewable energy will not only protect the NWT from fluctuating diesel prices; it will also reduce greenhouse gas emissions and contribute to fighting climate change. Our government is investing in renewable energy in everything from mini-hydro projects in Lutselk'e, to wind power in Tuktoyaktuk, to residual heat and solar power initiatives.
The GNWT has recently committed $5 million to develop and implement a biomass energy strategy, but our largest and most significant project in this area is the Taltson hydro expansion project. It's a strong indication of the government's commitment to develop renewable energy. The expansion is a proposed 36 megawatt to 56 megawatt expansion to the Twin Gorges plant on the Taltson River in the southeast region of the Northwest Territories.
In his statement to this committee, Premier Roland spoke about the GNWT's interest in working with aboriginal partners in economic development projects. The Taltson hydro expansion is one such project. The Dezé Energy Corporation is pursuing the project and is equally owned by the GNWT, the Akaitcho territorial government, and the NWT Métis nation. This project is a vital one for the NWT because it will displace 100 million litres of diesel and 280 kilotonnes of carbon dioxide annually. It will provide valuable economic opportunity for the two aboriginal governments partnering with the GNWT. It will lengthen the life of the mines in this area, and it will provide an ongoing revenue source for the government and its aboriginal partners as clean, renewable energy is sold to these mines.
The Northwest Territories government also recognizes the importance of the non-renewable sector and its role in contributing to a strong, prosperous NWT. Mining has a long and storied history in the Northwest Territories. It has provided jobs and business opportunities in our territory for decades. The NWT's three diamond mines are key drivers of the NWT economy. Since that first mine began construction in 1996, our territory has benefited from almost 14,000 person-years of northern resident employment, and the mines have bought more than $7 billion of goods and services from northern businesses. More than $3 billion of those purchases were from aboriginal northern businesses.
The Northwest Territories does not want to rest on its diamond mining laurels. There are excellent opportunities for the industry here in the north. Along with the new diamond mine at Gahcho Kué, which is on the way, there are a number of other projects in various stages of development that range from gold to tungsten, lead, zinc, uranium, and rare earths. Our territory is open for business and it is open to exploration and mining development done in an environmentally responsible and sustainable way.
The GNWT also supports another hugely important non-renewable resource project: the Mackenzie gas project. The construction of this 1,200-kilometre natural gas pipeline and the gas-gathering system would create 31,300 person-years of employment in the Northwest Territories and 208,000 person-years of employment in Canada. This project would create sustained employment opportunities in the communities up and down the Mackenzie Valley and provide clean-burning natural gas to homes and businesses across Canada.
Premier Roland spoke earlier about the link between settled land claims and economic activity in the NWT. The Aboriginal Pipeline Group created by NWT aboriginal groups with settled land claims holds one-third ownership interest in this project. APG ownership is a new and unique model for aboriginal participation in this economy. It will allow for aboriginal people in our territory to capitalize on the benefits of this proposed project and lead them to greater independence and self-reliance.
The NWT--in fact, all of Canada--stands to benefit from the building of this project. Our government believes the federal government's support of the MGP is crucial if it is to succeed.
Not all of our economic opportunities are as big and as mighty as that pipeline, however; the NWT has a strong traditional economy sector. About 40% of our NWT residents over the age of 15 spend time trapping, fishing, and hunting. Through our Genuine Mackenzie Valley Furs program, the GNWT is one of the very few governments in the world that supports the harvesting and marketing of wild furs as a fundamental part of a thriving modern economy. We're proud of that program, and the NWT furs are considered some of the finest in the world.
The government also actively supports small and medium-sized business development, whether in the service industries or in our burgeoning value-added sector. For example, in order to meet local demand as well as to export NWT fish to other markets, the GNWT promotes the harvesting and processing of NWT fish products from our cold, pristine waters.
Similarly, the government also supports the harvesting of muskoxen and reindeer. Muskox meat is marketed to high-end restaurants, and muskox fur, or qiviut, as it's called, is highly valued by the textile industry.
The territories' vibrant arts and crafts sector is yet another example of a small business sector that GNWT invests in. Our government's NWT arts strategy guides a variety of programs and services developed to help our artists and craftspeople.
While all these sectors are critical to the NWT's economy, I've saved the best, perhaps, for last: the tourism industry. The NWT features some of the world's greatest attractions: unforgettable scenery, teeming wildlife, and people who still hold to their traditional cultures. You can see and do things here that you can't do anywhere else. Our tourist operators offer world-class products, aurora viewing, and wilderness and ecotourism attractions for outdoor sportsmen and sportswomen.
Through such efforts as our 2010 tourism plan and our product diversification and marketing program, we continue to invest in this sector, one that's sustainable and generates over $130 million annually in revenue.
Mr. Chairman, committee members, what is needed from the federal government to assist the GNWT in making its vision of a healthy, prosperous NWT within a strong, sovereign Canada a reality?
First, we need your continued support and investment in NWT energy, transportation, and community infrastructure. Taltson, the MGP, and the Mackenzie Highway connector are essential ingredients to the NWT and to Canada's future.
Second, we need the federal government to direct its available and limited economic program spending in three key areas: first, geosciences, dealing with the mining sector; second, tourism product development, marketing, and infrastructure; and third, support to small and medium-sized businesses, particularly aboriginal businesses.
Third overall, we need to ensure that the north has adequate private investment; that is everyone's concern. As Minister Miltenberger has explained, the north desperately needs a regulatory system that respects both modern business principles and northern aspirations.
Mr. Chairman, the NWT's future is promising. Northerners are ready to act and to contribute to improving Canada's economy.
Thank you.
:
I think your question, with the long list you've provided, is probably one of the reasons why this government is more about saying, “Give us the tools so that we can build it”, and not about....
There's still a need for project-specific funding. We're trying to deal with many of the things you've highlighted from within our budget process. We go to our finance minister and ask him for the funds.
More importantly, though, and key to the discussion, as I entered into this, is that if we were to progress and move the yardstick, as Minister Miltenberger put it, on devolution and resource revenue sharing, we could answer many of those questions ourselves, instead of going, as has typically been done, to the federal government, hat in hand, saying, “Help us on this project. Help us on climate change. Help us on roads. Help us on hydro facilities.”
That will, of course, always be part of the relationship we have, much like every other jurisdiction. I mean, we can talk about east coast oil and gas development, we can talk about national highway systems, we can talk about ports and so on; the federal government has helped all jurisdictions.
I think the fundamental piece we would have is that with devolution and resource revenue sharing brought to a conclusion, and an adequate resource revenue sharing piece, we would be able to answer those things--we're starting to already, with our limited budget, on climate change--and go forward on that basis.
There are some key pillars that we've put forward. The message that I have shared, whenever I've had a chance to speak to the Prime Minister and my fellow colleagues across the country, is that in terms of our relationship on the larger projects that need assistance and that a small territorial government cannot afford on its own, these would include the Mackenzie gas pipeline and hydro development. They are key pillars of what we see as developing a sustainable long-term economy.
Mr. Vician has given you numbers on the impacts of the diamond mine, the jobs, the money spent by aboriginal companies. One thing we have to say is that every nut and bolt we turn in the Northwest Territories was manufactured in somebody else's jurisdiction, some other province. We import a huge amount of goods, from nuts and bolts to all our fuel. We ship it out of here, somebody refines it, and we ship it back at an increased cost.
:
I think, again, that devolution resource revenue sharing would allow us to simplify, to streamline, and to make decisions, I believe, in a way that reflects the interests and aspirations of northerners, both aboriginal and non-aboriginal. That development would spur a better economy.
What we have, in our smaller communities, are many people leaving the communities, because the cost of living is just so high. We have businesses that want to do business, but a small community store, and we're talking small--$80,000 a year, for example, is used as small.... When we talk about the Co-op in the Northwest Territories, we're talking about a small building with a couple of freezers, not your Co-op store down in Edmonton or Ontario or other places. Just the cost of doing business affects whether one can actually make that investment up front. Our challenge is how we do that.
With that type of authority in the north, we could see development happen in a sustainable way. For example, when the diamond mines first started up in the north, the Government of the Northwest Territories pushed for trying to get as much aboriginal employment and contracting done as possible. We had to push for a socio-economic agreement with the federal government of the day and with industry, because industry was used to doing business in a certain way and it didn't involve consultation, to a larger degree. That has definitely improved.
Step by step, we have been improving. It's about the final pieces of authority, and that goes back to the other question about first nations. When we talk about devolution resource revenue sharing, we want the authority to make decisions in the north. We're not interested in taking over federal responsibility for first nations. And that's the other thing. There is a special relationship between first nations and the federal government, and we're not going to fetter that process.
In fact, if you look at some of our legislation in the assembly, our legislation speaks to the fact that this piece of legislation will not take away a right of a first nation.
The NWT's 33 communities are small and spread out. The tiniest is Kakisa, in the Dehcho, population 55. The largest is Yellowknife, home to just over 19,000 people. Just nine of our communities have 800 people or more; only five have more than 1,000 people; among the rest, the population averages about 327 people.
There are plenty of challenges facing the Northwest Territories, but this is also a very exciting time. For the first time in years, national leaders are suggesting a vision of Canada that points to a vibrant north, where the maple leaf flies proudly, where our youth see boundless opportunities, where the north's vast resources are developed in a responsible manner that protects the land, provides jobs and wealth for northerners, and helps power the Canadian economy.
Not since Prime Minister John Diefenbaker championed northern development in the late 1950s has Canada paid so much attention to the Arctic. Even so, all Canadians, not just northern Canadians and our political leaders, need to understand the vital role the Arctic plays and can play in the future of our country. Much of our national identity is tied to the notion that we are a northern region. Yet how many Canadians have ever travelled north of the 60th parallel? How many Canadians have actually seen an inukshuk on the tundra? How many have tasted a lake trout reeled in from the depths of Great Slave Lake, or muskox harvested from Banks Island, or know how much oil flows every year from Norman Wells? Average Canadians know very little about the place that we northerners call home.
We're thrilled by the strides taken in the last two years, with millions of dollars for infrastructure investment, establishment of a regional stand-alone economic development agency, a new icebreaker to assert Canadian sovereignty, and extension of Canadian environmental laws and shipping regulations into Arctic waters. A geo-mapping program is proving to the world that mineral and energy resources in the Canadian Arctic are ours. We're also seeing enhanced presence by the Canadian military, particularly in Nunavut. Most importantly, the focus on the north is being seen by all political parties as necessary investment in nation building and the assertion of Canadian Arctic sovereignty. There appears to be widespread support that the north's time has come.
While we welcome the dollars and the place the north now has in the minds and hearts of Canada's elected leaders, much needs to be done. Over the course of your investigation, you will hear many suggestions, whether it be development of world-leading information technology, infrastructure investing in northern research, building northern intellectual and professional capacity by establishing a degree-granting university, or attracting new Canadians to live and work in the north. It can be difficult to know where to begin.
The first step is to understand what is required to bring northern services and infrastructure up to national and international standards. We believe that building the northern economy starts with one foundation: strong, healthy, and sustainable communities, where people have good water, affordable housing and power, jobs, and can live healthy lifestyles. Only with that can we attract the professionals we need and retain our current residents to give our youth the belief that if they complete high school and earn a trade or go to university, there is a job waiting for them here at home, where the quality of life is comparable to what they may experience in the south.
To get there, we have identified four areas: transportation infrastructure, community infrastructure deficit, federal funding programs, and the importance of northerners having a say in our future.
The idyllic image that many Canadians have of northerners paints us as a resourceful, hardy lot, where minus 40 is no big deal. We are hardy, and minus 40 is a fact of life in the winter, but we lack the many basic amenities that southerners take for granted and we are forced to get by with creative solutions. Take our ice roads, made famous recently by the History Channel production Ice Road Truckers. These transportation links were born out of necessity from the need to haul large quantities of fuel, food, and other supplies into remote mine sites and communities. Air transport was and is very expensive.
Surely this isn't the vast roads program that will open up exploration of vast new oil and mineral areas envisioned by Prime Minister Diefenbaker in 1958. Half of the NWT communities don't have year-round road access to this day. Many rely on a short winter ice road season or on once-a-year barge delivery for a year's supply of heating fuel and building supplies. While we don't expect roads to all our communities, transportation costs are the biggest barrier that must be torn down.
Our member communities believe that completing the MacKenzie Valley Highway from Wrigley to the Dempster and from Inuvik to Tuktoyaktuk is a crucial step. In May, our members endorsed two resolutions calling for just that. In October the Canadian Chamber of Commerce also endorsed a resolution for completion of the MacKenzie Valley Highway—what they refer to as the North-South Trans-Canada Highway. The Federation of Canadian Municipalities policy statement on northern and remote issues says this: “Existing transportation networks significantly impede economic competitiveness and quality of life in northern communities.”
The impact completing the MacKenzie Highway would have on the NWT would be enormous: 14,000 person-years of employment during construction; 160 permanent jobs, a possible 20% increase in tourism; greater access on mobility and enhanced quality of life for MacKenzie Valley and Delta residents, a reduction in the cost of living; and savings of $1.5 billion to $2.2 billion for exploration and well development for the oil and gas industry if the MacKenzie gas project proceeds. It could also lead to expansion of the electricity transmission system in the NWT, something that would bring lower-cost hydro power to communities that now burn diesel to generate power. Fiber optic cable lines could hard-wire high-speed communication links.
The cost of the highway is expected to be about $1.8 billion, but that's a small price to pay for the billions of dollars that could be generated in oil and gas and mineral development. Some reports suggest that the payoff could be 86,000 person-years of employment and a $58.9 billion boost to Canada's gross domestic product.
In September, we welcomed nearly $1 million to do preliminary work on an all-weather road linking Tuktoyaktuk to Inuvik. This is an important step to living up to the Diefenbaker vision of over 50 years ago. We hope it doesn't end there and continues with the next step: completion of the MacKenzie Valley Highway that was promised by Canada in 1972.
We're not just lacking transportation infrastructure; our communities need help too. In 2007 the FCM reported that across Canada the municipal infrastructure deficit had climbed to $123 billion. This is a snapshot of what community governments identify as their infrastructure funding needs, the cost of maintaining and upgrading existing municipally owned assets. They called it a crisis.
If things were bad in the south, they're even worse here in the north. In 2004, a report prepared by our association, in partnership with the GNWT Department of Municipal and Community Affairs, suggested that the NWT infrastructure deficit was $186 million. In late 2008, that deficit was believed to be near $400 million. Those needs include recreation facilities, fire protection equipment, roads, solid waste sites, and other municipal buildings—infrastructure that is essential to improving quality of life and providing a base to build a sustainable economy.
Thanks to the territorial new deal for NWT community governments, responsibility for infrastructure development and guaranteed annual funding was transferred to community governments, starting in 2007. Our communities have taken charge of addressing their infrastructure needs. Even so, we depend on programs such as the federal gas tax fund and Building Canada, but these also bring challenges, such as the community's ability to fund its portion.
Again we'd like to quote the FCM:
If Canada is to prosper, municipal infrastructure investments must support the economic potential of our cities and communities. For this to happen, financing must reflect the long-term nature of infrastructure investments, which will require a long-term investment plan with agreed-upon priorities.
We also want to express the important role communities play on the front line of Canadian sovereignty in the north. Canada can undertake a major infrastructure initiative using military infrastructure as the backbone. Military investment should be developed with civilian and private sector interest in mind and should form the foundation for long-term development. Our Arctic neighbours in Sweden, Norway, and Finland have used military investments to strengthen local economies. In Alaska, Fairbanks and Anchorage emerged as substantial cities thanks in part to military investments over the past 60 years. We're starting to see that in Nunavut now, with a naval refuelling base in Nanisivik and plans for a training base in Resolute. But the western approaches to Canada's Arctic must not be forgotten.
To build on the economic base of the north will take stable long-term funding from Canada. As I noted, the gas tax fund and Building Canada are excellent examples of what works.
What doesn't work is per capita funding. It sounds fair, and maybe it is in southern Canada, but the north's small population and high costs combine to make it unworkable. For example, when Canada introduced the recreational Infrastructure Canada or RInC program earlier this year, our communities were excited about the possibility of getting enough of the $500 million to address repair and upgrading of their recreational facilities. The first round of funding amounted to $189,000 per territory based on a per capita funding arrangement. Some people called this swing-set money.
The NWT didn't seek any of the first round of funding, and it all went to projects in Nunavut. In the second round of funding, 22 NWT communities applied for RInC grants. Seven projects were approved, worth a total federal contribution of $550,000.
To illustrate why per capita funding is insufficient, I want to compare building costs using a formula that our insurance program uses. We've calculated the square foot cost of construction for a typical construction garage with metal cladding and concrete floor for three Alberta cities and four NWT communities. That garage would cost about $134 per square foot to build in Calgary, $124 in Edmonton, and $120 per square foot in Grand Prairie. It is much higher in the NWT. In Fort Smith the cost per square foot is about $164, in Yellowknife it is $160, while it's $208 in Inuvik, and $314 in Sachs Harbour.
You also have to consider this. In some communities, if you need a crane to undertake some work, it needs to be shipped by sea lift or summer barge. You may only need the crane for three weeks, but it's likely there until the sea lift the next year.
This summer we wrote Indian and Northern Development Minister Chuck Strahl to explain the situation, and he said this in his reply:
Your letter makes a strong case for the distribution of funds in the North on a basis other than per capita. I fully agree that building costs in the North are much higher than the national average, and existing recreational infrastructure is less well developed. I have and will continue to communicate this point to my colleagues.
It's also necessary to point out the challenges of dealing with the federal bureaucracy. We understand there are accounting rules and reporting procedures that must be followed. However, it can be challenging for a community to complete a complicated application form when they only have a few days to do the job. Even if we can get through that, we have to wait months to hear back, watching the extremely short building season slip away.
:
I started off by saying how excited we are by what we're seeing and hearing from Ottawa regarding the north. Even so, we feel left out of the equation.
The NWT's hamlets, settlements, villages, towns, and cities will be profoundly affected by the decisions that will be made in the coming years. We should be granted a prominent, meaningful role in making the policy decisions that will shape the Arctic and our hometowns.
When Canada's northern strategy was unveiled this summer, the announcement took place near Ottawa. While the commitments being made are important and welcome, there is one thing missing: northern voices.
When CanNor, the new Canadian Northern Economic Development Agency, has funding programs, they go directly to communities. However, that often leaves the territorial Department of Municipal and Community Affairs in the dark, not knowing how to help the communities they're mandated to serve. This can be a challenge because many of our smaller communities depend on MACA for their support to complete application forms for federal funding programs.
Working together toward the same common goals should be the easiest barrier to overcome. However, developing a partnership with Canada, the GNWT, community governments, and aboriginal northerners having a say in their future can sometimes be one of the most challenging barriers to breach.
In closing, thank you for the time to speak with you today. We hope you remember these points as your committee gets down to work to recommend ways to tear down those barriers and develop the north.
The Mackenzie Valley Highway from Wrigley to Tuktoyaktuk needs to be built. Strong, healthy, sustainable communities are the foundation for a strong economy in the north. Federal funding using a base-plus formula that recognizes our significant challenges is necessary to build the north's future, and we want to be partners in planning the growth and development of our future.
Thank you.
[Translation]
Good day and welcome to the Northwest Territories. I want to start by thanking you for the opportunity to speak to you today on behalf of Alternatives North. Although my French isn't perfect, I do make an effort to speak the language. It's one way for me to honour my wife, who is from Quebec, and my in-laws. Speaking French also reminds me that a language is a gift from our ancestors. Many Aboriginals in the NWT try to preserve their own language. Unfortunately, this is a difficult, never-ending task.
[English]
Alternatives North is a social justice coalition operating in the Northwest Territories. Within our ranks are representatives of churches, labour unions, environmental organizations, women and family advocates, and anti-poverty groups. Alternatives North is known for its incredible work and analysis done largely by volunteers.
Today I want to speak about a vision. Today is my birthday, and permit me to dream out loud about what would be, to my mind, a perfect birthday present, not only for me but for my fellow citizens in the Northwest Territories.
I want to live in a territory where people can learn and relearn their traditions and languages and access services in those languages. I want to live in a territory where economic development does not mean that some people get rich and the poor get poorer. I want to live in a territory where addictions and other mental health issues are a thing of the past. I want to live in a territory where students graduate from high school with the literacy and numeracy skills to work and study anywhere they wish. I want to live in a territory where people in all communities have access to good quality, culturally appropriate day care.
Some of you may be thinking: what do these things have to do with economic development? I would say everything. Any economic development strategy would be incomplete without considering these factors. In terms of what we traditionally call economic development, I would like to see a territory that invests in the renewable resources sector and does not place all its bets on the non-renewable resource sector. I would like to live in a territory that gives people the option of living a more traditional lifestyle and working in the local economy that builds on the natural assets of the community. I would like to live in a territory where all people recognize the importance of preserving our natural capital. I would like to live in a territory that fully realizes the implications of climate change on our economic development and the need to ensure that, when we pursue economic development, we set an example for the world. If we want the world to change the way it does economic development, we must change as well.
I would be delighted to answer any questions you may have.
Thank you.
:
Thank you very much for the question, Mr. Russell. I do appreciate it.
People from all different walks of life, different political parties, by and large agree on the vision. The real question is, what is the strategy?
One thing that comes up so often in terms of our friends in business is that they often point to business development. I think a fundamental piece of infrastructure that is needed as we pursue economic development is social infrastructure.
The north has been subject to many challenges, and I think you are aware of some of those challenges. We have to put special emphasis on developing and strengthening the social infrastructure of communities. The hard question is how we do that.
My view--and I think it is consistent with Alternatives North--is that we really do need to invest in, for example, zero to six, early childhood education. One of the challenges I have observed in terms of existing federal programs is that zero to six is a style or an emphasis for a certain number of years, and it's not followed through. I think we are starting to see some benefits from the early childhood education that has been going on, and it would be great to re-emphasize that and make it last longer.
In speaking to educators, my understanding is that one of the challenges in terms of outcomes, particularly among aboriginal students, is that with the benefit of good programs, such as Healthy Start and early childhood programs, they seem to do fairly well until grade 5, but then there's a drop-off. How do we address these drop-off issues?
I think there is room to put more cultural programming into the schools to make sure that all people are proud of who they are and where they are, as well as to enrich programs in the summertime. I don't have the evidence with me, but one of the key differences in educational outcomes of various people of different backgrounds is what they do in the summertime. School is not a 10 months a year thing; it's a 12 months a year thing. I think investing in the social infrastructure is important for northerners to take full advantage of all the economic development that is coming down the stream. Human capital investment, human infrastructure investment, is as important as the physical infrastructure investment.
Thank you.
I think one of the real threats to the sustainability of communities is the price of oil. As Terry was mentioning, many communities are very dependent on using diesel generation.
In 2008 we experienced the price of oil going up to $150 a barrel, and that was in July. That was at the exact same time that many of the communities through the GNWT were essentially buying their oil supply. So they got stuck with that high price even though the oil wasn't delivered until probably October, when the price was much, much lower.
I think one of the real challenges to economic development in the Northwest Territories is our dependency on oil. We import something in the order of 450 million litres of gasoline and diesel per year, and a doubling of prices would go from approximately $500 million in terms of imports to $1 billion in terms of imports.
So we believe there is a looming cost-of-living crisis if you start to believe some of the predictions of energy analysts who are saying that oil prices will be increasing, and I think, incredibly, it's no longer the granola-eating, Birkenstock-wearing, flaky environmentalists, but it is the more mainstream bankers, such as Jeff Rubin, the International Energy Agency. So certainly there's a growing consensus that the cheap oil is gone, expensive oil is here. Therefore, that's going to be a real challenge.
So I believe fundamentally that communities particularly do not have ready access to alternatives such as mini-hydro. We need to look at ways of increasing their independence. Hopefully, we can finish off those communities that have access to mini-hydro. Hopefully, we can experiment further with wind generation that's already starting in Tuk.
I really do believe it is absolutely vital in the north that we develop energy alternatives and the way you do it is to start doing it. I think in some communities such as—
Canadian Zinc owns the Prairie Creek lead-zinc-silver mine in the Northwest Territories in the Mackenzie Mountains. This is a unique situation, a unique project, in that the mine was built 30 years ago. It's 30 years old, but it's brand-new. It has never operated. Like many other projects, that's a colourful story, but it's not a story for today. Let me just say today that Prairie Creek is a major Canadian resource.
The mine is not in production, and why not? I regret to say this is largely because of the current regulatory and permitting regime that exists in the Northwest Territories today.
When the mine was built in 1980-82, it was fully permitted, but unfortunately those permits lapsed, and when the new Mackenzie Valley Resource Management Act came in in 2000, we had to reapply for permits under the new process. Since 2001 we have successfully obtained seven permits for exploration and development, and various aspects of that project have been the subject of five different environmental assessments, all of which recommended that the project, or the aspects of the project, be allowed to go ahead. We're not yet there, but we are getting closer.
In June of last year we applied for the operating permits to put the mine into production, but we still expect a lengthy process. In October 2008 we signed important MOUs with aboriginal first nations in the community. These represented agreements to cooperate for mutual benefit.
Members of the committee will be well aware that in June of this year, 2009, both houses of Parliament unanimously passed an act to amend the National Parks Act to expand Nahanni National Park. The MP for Western Arctic, Mr. Bevington, spoke on that resolution in the House.
The new act expanded Nahanni National Park. It completely surrounds the Prairie Creek mine, but the mine itself has been excluded from the park and is not part of the park. And most importantly from our perspective, the National Parks Act was amended to provide that the minister could grant leases or licences to provide access through the park to the Prairie Creek mine area.
For many years, that unresolved land use policy issue had delayed the undertaking of the Prairie Creek project, but I'm glad to say that the resolution of the policy issues has now eliminated that problem. So Canadian Zinc, and indeed the entire Canadian mining industry, supports a balanced approach to resource development and conservation, which allows both for resource development and for preservation and protection of the environment.
Our mine will provide tremendous economic stimulus to the region of the Northwest Territories. It's a unique opportunity. Indeed, it's probably the only opportunity in the Dehcho region to strengthen and enhance the social and economic well-being of the surrounding communities. The mine will employ about 220 people. It will run for about 20 years. We're targeting a northern employment of about 40% and then a first nation employment of about 25%, minimum.
Mining has always been the economic driver for the economy of the Northwest Territories. We would suggest to you that mining has created and paid for most of the major infrastructure in the Northwest Territories: roads, rail, hydro, and indeed the very city of Yellowknife itself. We would ask, where would the Northwest Territories be without mining?
But mining today in the Northwest Territories is threatened. Mines are finite. They run out and they do not last forever. The diamond mines, which are making a huge contribution to the current economy of the Northwest Territories, are probably past their peak years.
Mineral exploration is the lifeblood of the industry. Unfortunately, throughout Canada in 2009, mineral exploration is way down. According to the figures published by Natural Resources Canada, there is a 44% decline, but in the Northwest Territories the reduction is a staggering 81% down, year over year, from $148 million spent in 2008 to only an estimated $29 million this year.
In the mining industry we operate in the global world. Investment capital is very mobile. It will go where it gets the best reward at the least risk, but risk includes not just project or price risk, but also environmental and social risk. Canada now needs to compete for the investment dollars, and there can be no certainty that there will be a future in the Canadian mining industry that will attract global investment capital. So to win the battle or the competition for investment dollars, to make Canada and the Northwest Territories an attractive place for investment in mining, we need to eliminate barriers to entry.
We cannot change the geology. We cannot put minerals in the ground, but we can reduce the barriers to entry, and two of those in the Northwest Territories are land access and permitting.
Unfortunately, in recent years the NWT has gotten a reputation as a difficult place to gain land access for exploration or to get permits for mining or to get them within a reasonable timeframe. There is a significant challenge to permitting in the Northwest Territories. Our fear is that if there's no improvement, mining capital will go elsewhere, because the timelines are too long, there's no certainty. And nobody will get the benefit of the resources that are undoubtedly here.
In this presentation what we have sought to demonstrate is that development of the Prairie Creek mine will offer many benefits to the aboriginal communities, to the Northwest Territories, and to Canada, but the successful development of our mine needs the active support of government and of political leaders. Support is needed in improving the regulatory permitting regime; in upgrading infrastructure, education and training, and social programs; and in assisting the aboriginal communities to avail themselves of the many business opportunities.
We would suggest that the Northwest Territories needs a northern development vision, a northern development strategy, and a broad infrastructure plan including both transport and power. And indeed, land-access arrangements must be quickly agreed with first nations. The mining industry will play its part, but government must play the leading role.
Finally, gentlemen, perhaps most importantly, development of Canadian Zinc's Prairie Creek mine needs the active participation of all levels of government in providing political support and encouragement and in delivering a very simple message, a message that needs to be heard, and thankfully doesn't cost any money; it's just a message. That message is that we strongly support northern economic development and we support the development of the Prairie Creek mine. We would ask the standing committee to help ensure that message is heard.
Thank you.
:
Thank you, Mr. Chairman.
Bonjour.
Edlanet'e. That's language from my region here within Akaitcho. It's Chipewyan. It's “How are you doing?” Welcome to the Akaitcho territory.
Once again, thank you, Mr. Chairman, for inviting us to speak with you today on a topic of great relevance to us. We will take a bit of time to share some of our experiences with trying to develop a major infrastructure project in Canada's north.
In order to give you a first-hand account of development in the north, I'll start by telling the committee a little bit about who we are and what our project will accomplish in terms of broad and specific benefits. Then I will highlight a couple of key barriers that preclude economic development in the Northwest Territories. I think you will come to agree that our project is a stepping stone to sustainable economic development in Canada's north and is indeed part of the solution. This committee can play an important role in communicating the benefits of this project to your federal counterparts to ensure that this incredible opportunity and others like it receive the support they deserve.
About the Taltson hydroelectric expansion project, the project proponent is the Dezé Energy Corporation. Dezé is a unique collaboration, a Northwest Territories corporation owned equally by the Akaitcho Energy Corporation, the Métis Energy Corporation Limited, and the NWT Corporation 03 Limited, a wholly owned subsidiary of the Northwest Territories Hydro Corporation of the Government of the Northwest Territories, which is a crown corporation.
The existing Taltson Twin Gorges facility, owned and operated by the Northwest Territories Power Corporation, is located on the Taltson River, approximately 56 km northeast of Fort Smith, just south of us, and approximately 285 km southeast of Yellowknife. The Taltson project would install a new stand-alone plant of 36 megawatts and up to 56 megawatts of energy, in proximity to the existing plant at the Twin Gorges of the Taltson River, and a 700-kilometre transmission line into the Slave geological province.
The Taltson project would supply clean hydroelectric power to the diamond mines in the Northwest Territories and provide a long-term revenue source to the project partners. Prospective power customers include three operating and one proposed diamond mine. Diavik, owned by Rio Tinto, Ekati, owned by BHP Billiton, and Snap Lake Mine, owned by DeBeers, are operational, while Gahcho Kué, principally owned by DeBeers, is a proposed project for the near future.
As a northern-owned and majority-owned aboriginal partnership, Dezé Energy is guided by the fundamental principle of respect for the protection of the environment, traditional sites, and activities of the aboriginal people of this particular region. The project benefits include that the project would be very beneficial to the Northwest Territories, with the potential to extend the life of the existing diamond mines, make future developments more environmentally responsible, and ensure economic benefits stay in the north for the benefit of northerners.
The project is economic, will spur further development in the Slave geological province, and will be a tremendous boost for the northern economy. It will spur 500 to 700 direct jobs, 230 indirect jobs, and 250-plus induced employments during a three-year construction period; produce long-term revenues to public sector and aboriginal government shareholders; and extend existing mines in the diamond reserves through reduced operating costs. There are also substantial environmental benefits from the Taltson expansion project: 100 million litres or 280 cubic tonnes of carbon dioxide carbons in GHG emissions will be reduced annually; it has a small incremental footprint on the previously developed river system; it is sustainable green energy, with a life expectancy of approximately 50-plus years; it will optimize renewable resources, with no additional flooding.
An extended life of the diamond mines means substantial tax revenues and economic stimulus for all levels of government in the region--for example, $1.1 billion GDP annually to the Northwest Territories over the last two years. The Northwest Territories GDP doubled between 1998 and 2004 as a result of the diamond development. And the federal resource royalties have been between $19 million and $147 million annually since 2002.
This particular economic development is much needed, Mr. Chairman, in our southern part of the territory. You take a look at what has been happening in the north in terms of oil and gas development, and the potential for ongoing development in that area is west of us. You take a look at the hardrock industry, which is north and east of us, and a little bit west. Those particular areas have been receiving a lot of attention and a lot of development has occurred over the last number of years. In our particular part of our region, there is renewable energy that we can utilize with very little impact and help the hardrock industry to continue developing for many years in the future. So it's a much-needed economic stimulus for our particular communities within the Akaitcho and the South Slave.
Mr. Chairman, our project is a stepping stone to removing three key barriers to sustainable economic development in the north. They include a lack of sustainable energy infrastructure, the high cost of energy and need to reduce environmental impacts on fossil fuel consumption, and the need to generate sustainable economic development from non-renewable resource development. All of these barriers present significant and lasting obstacles to economic development in the north that the Taltson project will help to address.
All these benefits will be derived at a brownfield site next to an existing power plant that will optimize—it's currently underutilized in the river system—and generate hydro power and displace diesel generation at the diamond mines in the Slave geological province. BHP Billiton, Rio Tinto, and DeBeers all maintain a significant presence in the NWT and consume approximately 40% of the electricity now being consumed in the north. Because of the remote locations, they had no choice but to rely on mine-site diesel generation. The Taltson expansion project presents an incredible opportunity to change that. The project has the potential to generate long-term revenues from resource development, to create huge environmental benefits, and to ensure that future economic development can occur in a sustainable, cost-effective fashion.
Mr. Chairman, just to add to that, if you're not already aware, there's a lot of discussion in the north and a lot of concern with the declining of the caribou herds. There's a substantial decline in the last number of years. There's a lot of discussion about how governments and other stakeholders in the north are going to address this issue. This is a project that we feel is going to contribute in a positive fashion to ensuring that the environment is taken care of and that we're eliminating the burning of fossil fuels.
As you're well aware, whenever fossil fuels are being burned, deposits do fall on the ground, and in turn are taken up by animals such as the caribou. And we do believe that if they're eating such a food source out there that contains contaminants, it may be a contributing factor. We as developers believe this particular project is going to be a very positive step forward.
First of all, I'd like to thank the committee for allowing me to make a presentation. My name is Hugh Wilson. I'm vice-president of environment and community affairs for Tyhee NWT Corp., which is a wholly owned subsidiary of Tyhee Development Corp. We are developing a small gold project about 90 kilometres north of Yellowknife, adjacent to the historic Discovery Mine, which some of you may be familiar with.
Today I'd basically like to highlight some of the other information that is being presented through consultation with various department people, and I refer to the McCrank report on the northern regulatory improvement initiative, which covered a broad range of issues, including the environment and aboriginal issues. I'd like to reiterate some of those issues that I think are applicable today.
The first issue I'd like to talk about is clarification of the requirements for aboriginal consultation. The need to bring clarity to the issue of community consultation in relation to resource development proposals in the NWT grow stronger each year. If left unresolved, this issue will continue to deepen divisions within the northern community and lead to unnecessary litigation. If that is the case, there will be a profound negative effect on the new mineral exploration activities that are necessary to ensure that new ore bodies are discovered to replace the existing diamond mining operations, two of which have already reached the midpoint of their proposed lifespan.
What we recommended in relation to the McCrank report was that the federal government give the highest priority to developing and implementing a policy that will clarify its own role, the role of proponents, and the role of the Mackenzie Valley Resource Management Act boards in relation to responding to the requirements of aboriginal consultation under the MVRMA, which definitely addresses the requirements for consultation and accommodation under the common law. The preparation of a detailed manual of aboriginal consultation procedures and accommodation policies should form part of this initiative.
The next recommendation was to develop a policy for impact and benefit agreements. Impact and benefit agreements continue to present significant challenges for proponents, communities, and regulators alike. The recommendation we made was that the federal government should develop immediately an official policy on the scope, nature, and purpose of impact and benefit agreements in the NWT that reflects an appropriate division of responsibility between government and proponents for the consequences of mineral resource development projects on northern communities. The policy should clarify the role played by impact and benefit agreements in the context of the overall process for the assessment, approval, and regulation of mineral resource developments. As an add-on, I'd say that the policy should consider the scale of any new or proposed project.
The next one I'd like to highlight is the recommendation to ensure adequate capacity and appropriate expertise. The dedication and diligence that members of the MVRMA boards bring to the discharge of their duties are well recognized. Nonetheless, significant concerns have been expressed as to how well government has fulfilled its obligation to ensure that the best-qualified individuals are appointed to board positions and that each appointee receives the necessary instructions and training in order to properly fulfill his or her responsibilities.
The recommendation we made was that the federal government establish a comprehensive process to identify, in concert with aboriginal groups, the appropriate candidates for appointments to MVRMA boards; develop a curriculum for instruction to ensure that appointees have the knowledge and understanding required to discharge their respective responsibilities under the legislation and in keeping with applicable overarching principles of law; verify the state of readiness of each candidate before board appointments, to confirm the candidate's capacity to discharge the applicable responsibilities; implement an ongoing program to ensure that board members have the benefit of further training and instruction to expand their knowledge and expertise, taking into account significant legal, technical, and other developments that may impact the MVRMA process.
There are a couple of other ones that I'll just go into on the next point.
The next point is to establish an independent body to support northern boards. Experience suggests that a program of the kind described above will not be possible in the absence of specifically dedicated or focused resources.
The recommendation was that the federal government establish an independent permanent body having a broadly defined mandate to oversee the process outlined in the previous section that I just read. This body should be established on a pan-boreal basis and serve all the boards established in all three territories.
Hi. My name is Gilbert Cazon, and I'm representing Nogha Enterprises. Nogha Enterprises is an economic development arm of the Liidlii Kue First Nation, which is essentially located in the heart of the Deh Cho. In English, it's Fort Simpson, Northwest Territories.
Nogha stands for wolverine in South Slavey. We chose that animal because Nogha is an economic development company of a band, and for us an animal of that importance is big recognition to our company. That's one of the things that we try to do. We try to speak for the things that can't speak for themselves by representing and doing things in an ethical way that would sustain them, to sustain us, to sustain longevity for our people. So that's the approach I will be taking right from the ground up.
I missed some of the presentations, but I believe that's why I'm here: it's for the barriers and solutions to economic development. I've just been in this office for probably about three weeks, and I'm just catching up to speed with a lot of stuff, so I might be a little bit shaky. I might miss a few things, but I am hoping that you get my message.
We do need help, we need support, and anything that you can do down in Ottawa to help us up here would be great. We also need people to work together. We need a person from Ottawa to work with a person from the north. I'm constantly meeting. Every time there's a mega-opportunity or there's an opportunity or there's a resource that you want, we should be meeting on a regular basis so that we're working together.
To show that to the first nation groups would show them a lot. They would work with that, because right now a lot of people are approaching first nation groups for opportunities. First nation groups are trying to capitalize on some of the opportunities, and at the same time they're trying to build capacity.
We're trying to do a lot of things, and a lot of the stuff that's happening now in the communities is due to a lack of communication. There is no communication, and if there is communication, it's not clear. The ones who we really need to communicate to are our elders.
We don't have a South Slavey interpreter here. We don't have a Dogrib interpreter here. We don't have any of the people who we need to get this message to our elders, who are key to the decisions for the longevity of our lands. So we need to make sure that any message that we do speak about is clear to our elders. And the land claims issues, they're unclear on those. There are lots of issues on the table they're unclear of.
There are land claims now where we have boundaries and we have overlap areas. What the old people don't understand is why is that boundary not defined. Why is it all of a sudden you get into this grey area and you need letters of support from every other group, when it should be defined? That's one of the barriers for economic development in working with other first nation groups: there is no defined boundary and it's an overlap.
I'm not too sure why that is there, but it should have been clearly defined in the land claim. Before putting that line on the map, I believe that people should have consulted with all groups to make sure that was okay with everybody and come up with a definite line, not an invisible line, and then all of a sudden you get into a grey zone where you don't know what they mean. You don't know if you need their support, you don't know what you could do in that area, you don't know who owns it. So there are definitely things that can be done there that need to be done so that we can continue to go after these opportunities that are there.
Now I'll just continue about some of the things that we do. Nogha started out small and because of our aggressiveness and because the things that we do we try to do well, we've been slowly moving on to contracts, picking up work and picking up major contracts, major opportunities.
Right now we do have a major opportunity at our doorstep, and we're trying to capitalize on that with the people who are there. In order to do that, we have given them support. We have given them everything that we could do to help them drive this vehicle so we can get things done in the north, in our area, in our traditional area. That's what they want to do.
We have worked with other first nation groups and we continue to. Just recently we worked with a first nation group that five years ago didn't have any equipment. Now, today, I've got less equipment on that project. They've got most of the equipment on that project and they're running with that contract.
They have a $5 million contract, and they like that. They didn't have that five years ago. But first nation working with first nation can accomplish these things and can make it better. If you have the support of other first nations by doing this and the government is supporting that, then there is no barrier. We can do major things together. There are lots of things that we can do together.
One of the main things was communication. Communication will have to develop so that our elders understand clearly what it is that you want, how it is that you're going to take it, how it is that we can get it back or that we can be a part of it. They need to know those things clearly. And some of the people who represent them these days do not speak their language. So there's that barrier. We lost that whole system and we lost that connection. There is a connection still there, but we need to capitalize on the people we have who can keep that connection there, and that's what we are doing in our area now. We're trying to encourage our dialect in our band office. Now everybody in our band office is trying to speak Slavey, even though it's not clear what they're saying. At least they're trying, they're making an effort--and we help them too. But those little things need to improve, because we need our language back. We need the control of ourselves through our language, and that's who we are. We can speak and practise our culture only provided we have our language.
One of the reasons for economic prosperity for us is so that we can practise our culture and practise it without the barrier that we have to get back to our home. We can stay out there and practise it, teach it, hand it down, and then even do school for our kids out there. That's the whole reason for my drive to make economic prosperity in our area, so that we can practise culture and keep culture on the table and keep it strong.
I can go on for a long time, but--
:
Thank you for the question, Mr. Bagnell.
I believe there certainly are significant differences between the territories and the provinces and indeed between the territories themselves. The difference, I would suggest, is primarily in the regulatory regime. The issue of taxation is not the main difference, not the main priority. The main difference is in the permitting regime.
As you are well aware, I believe, the regime in both the Northwest Territories and Nunavut is different from that in your own territory of the Yukon, and of course we're into the devolution question there. But in the Northwest Territories we have the Mackenzie Valley Resource Management Act and the entire process this creates, which is a product of the land claims settlement agreements. So you have legislation enacted by Parliament based on an underlying agreement between Canada and the territory and the affected first nations. Not all the Northwest Territories, of course, are settled, but it's still the governing legislation.
We don't have these issues in the provinces. The regulation in the provinces is by and large driven by the provincial governments and the federal government. You've got a different layer in the Northwest Territories.
The major challenge for the mining industry, in the north particularly, is the regulatory regime and the land access issues. There are land access issues in the provinces as well, but it's more significant in the north because a lot of settlements have not been reached. And frankly, the north has more potential.
The mining industry is a mature industry in Canada. There's a phrase, the easy mines have been found. The ones that have access to infrastructure have all been found, developed, and mined out. The new resources to be found are in the north of three provinces, three territories. And that is, if you like, the long-term future for the Canadian mining industry.
Thank you to all the panel participants in this process, which I think is a very good process for the Government of Canada and for Parliament to be involved in. This has been ongoing since March, and certainly in this phase of our community consultations we're also picking up much more information. But it will continue afterwards, in Ottawa, as well.
I could weigh in on the environmental assessment process. I was one of the first members on the Mackenzie Valley board, and we conducted assessments of projects in good fashion. Whether it was the K-29 gas development in the Fort Liard region, or the BHP expansion project, all were done in a reasonable fashion.
It seems we have created a bit more of a problem, in that everybody wants in on this now. With the Mackenzie Valley project, they created a cooperation plan that brought in a lot of other elements outside the Mackenzie Valley Resource Management Act. We can't really blame the Mackenzie Valley Resource Management Act for the Mackenzie Valley project, because it went far beyond the scope of that act. We have to keep that in context.
What's happened now is not what was happening at the beginning. Certainly with the Prairie Creek project, I remember approving a project for a winter road that then went to the minister's office and disappeared for a number of years. I see you've now completed the winter road almost ten years later.
There are things about people in the north understanding how to get projects going that somehow loses context when they get into a larger frame of things. I think northerners are practical about development, but we're also very sensitive to the interplay of political issues that have to take place here.
Those are the things that I'll take a couple of my five minutes to talk about.
I want to speak to the Taltson project. With this project you're going to create an energy source for the mining companies. If the mining companies themselves were creating an energy source on their property, they would receive a great royalty break. When a mining company in the Northwest Territories invests in capital, it gets to write that capital down against the royalties. Here you're investing in a project that will serve to reduce the mining industry's costs. Do you see the same kind of benefit accruing to you from the federal government in the development of your project?
:
Thanks very much, Mr. Chair.
Thank you very much, gentlemen, for coming here this afternoon.
It's indeed an honour for me to be here as well to hear about some of the issues of the north. It's my first opportunity, as I'm new on the committee.
I have a couple of comments before I start.
The environmental concern messages get a lot more attention south of 60 than do your good news economic development stories. I know it's very difficult to get the message out when you seem to have other groups converging on anything that is done. I certainly think working with you in that regard is a good idea, but it's also something wherein you have to work with us to give us the pertinent information.
I have a couple of other comments. Concerning power, if you were purchasing it from some of the companies, you would also be paying for it. It would be an expense on your bottom line and would also be helping the others. There is a bit of a balance that comes out there as well.
The other is that when we were flying here last night, I had an opportunity to look at a magazine that indicated that the caribou herds have actually been increasing since 2006; some biologist had been looking at that. I thought I'd ask about that as a question as well, while I have the floor.
This morning when we were talking with the Government of the Northwest Territories, they said their major concerns were related to devolution and adjustments to the current regulatory system, especially as these pertain to environmental concerns. My question is, have you been able to work with the Government of the Northwest Territories? Have they been working with industry in the development of any new regulatory regimes?
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The mine was built in 1980-82, and I believe you may have photographs of the mine as it exists today. In 1980-82, $65 million was spent in building the mine, which is a couple of hundred million dollars in today's money. For financial reasons, the mine did not go into production. It was abandoned for a number of years in the 1980s. During this time, the old permits expired and weren't renewed.
When our company acquired the property in the late 1990s, we carried out explorations. The new act came into force in 2000, and we then had to get permits under the new act. Our old permits had lapsed and it was necessary to get new ones, so we went through a process of exploration.
Our first permit was a permit for exploration, our second one was for exploration, our third was for underground development, and the next one was for a road. We had to keep going back for permits at every stage of the process. Each stage of the process required an environmental assessment, and each one took a long time. It took much longer, in our view, than it should have taken, particularly as the mine was already built.
Unfortunately, we got caught in a legislative problem. The new act dealt pretty well with new projects. It dealt fine with projects that already had permits—they kept going. But we fell in the middle—we had a mine already built and no permit. We got bogged down in having to re-permit, and we're still have to re-permit.
Part of it was because of the proximity of our mine to the Nahanni National Park. We got that resolved in June of this year. The mine is not in the park—it is excluded from the park. This has changed the permitting environment. For four or five years, there was a debate about whether it was going to be a mine or a park. At one stage, people wanted to stop the mine and build the park. But finally, as a result of a lot of negotiation and compromise by everybody, including Parks Canada, we got to a good solution. I'm hoping that with this out of the way, with new legislation and settled policy, we will be able to move expeditiously through the remaining parts of the permitting process. But it's still a long process.
:
Thank you very much, and thank you for the invitation and the opportunity to present. You often hear it said in the NWT that the way to start a small business in the north is to start a big one and wait a couple of years. The statement perhaps unintentionally reflects the reality of the many barriers to business development in the NWT.
For discussion purposes, I've separated the barriers into two broad categories. The first one I'll discuss is the barriers that are experienced directly by businesses and communities when they attempt to develop, and the second is the barriers that are often faced by development organizations that try to provide assistance to those organizations.
First we'll start with the businesses in the communities. The obvious one, the elephant in the room, is that the cost of doing business is higher in the NWT than in southern Canada, not only direct costs such as materials and labour, but you also have to consider freight, transportation, heat, and power, which is a big one. We always hear about trying to make power rates similar across the NWT, but it's never happened, so it's a big disadvantage. Of course, increased costs can mean that businesses lose the ability to compete.The problems are not only evident when we compare the NWT as a whole to southern Canada, but even when you're comparing smaller communities or disadvantaged communities to larger, more populous communities.
One possible solution--and I assume this is the way you want me to present, barriers and solutions--is we just thought that you could possibly provide some kind of incentive, tax break, or subsidy to small business in the north, similar to those that are provided to individuals in northern areas, such as the northern living allowance that all government employees receive, or the northern residents tax reduction that's offered to all northern residents. That's in the short run. In the long run, of course, we can always ask you to continue to work with local and territorial governments in attempting to reduce the costs of operating businesses and living in the NWT.
Second is education. Many areas in the NWT still suffer from low levels of education. Many small and medium-sized enterprises lack the skills and capacity to take advantage of even small-scale opportunities, and often require intensive one-on-one assistance. One possible solution is to aid the business development organizations that are out there by providing funding, or more staffing somehow, so that we can improve the staff-to-client ratios, build better relationships, and try to bring that education to them.
They also need more training specific to the start-up and operation of business. There could possibly be a workshop series introduced, and if those types of things already exist, perhaps some medium to make businesses more aware of the training opportunities that do exist. Just in the last couple of years, the NWT has been linked up with Alberta, and we have access to video conference facilities now that provide some of that kind of material, so it doesn't always have to be in person.
Of course, we can always ask that entrepreneurs be made aware of the ramifications of not starting their business on the right foot. They always end up in trouble, especially with CRA, five years down the road.
Another one that was noted was the educational funding provided to employees of organizations and to tradespeople for upgrading and skills development, and that kind of stuff. Small businesses that have owner-operators who actually do the work, not just hire employees to do the work, are often not eligible for that type of funding and can't take advantage of the funds that are set aside to go to upgrade their services or perhaps get some specific training in a new area so they can broaden their service. Because of that, it's tough for them to compete, particularly against southern companies that might try to come in and tap markets once or twice a year and leave town with piles of cash in their pockets. The suggestion we had there was that perhaps changes could be made to existing training funds and programs to allow business owners to access them. We're probably all aware of the changes that were recently made to the EI program to allow self-employed people to now pay into EI and take maternity benefits, so why not broaden it a little more and allow small business owners to access training?
The final one under education is that many people in the NWT are not aware of the challenges and benefits of being self-employed, nor do they know anything about what it takes to be in business or how to get there. Perhaps educational efforts could be focused on senior high school and college students, and the schools could be asked if they wish to take advantage of a structured program to teach their students more about business. Perhaps business becomes not mandatory but a mandatory elective that schools have to at least offer to students and give them the chance to learn a bit more about business.
That covers off most of education.
Next is labour. If you'd been in Yellowknife maybe two to three years ago, this one would be plainly evident. New and existing businesses require a larger and better qualified workforce. Significant shortages of capable employees not only prevent new businesses from starting and existing businesses from expanding, but also make it very expensive and difficult for existing companies to maintain their current operations. I know restaurants here in Yellowknife, for sure, and Alberta too, were experiencing staffing shortages and had to cut back hours, increase wages, and hire younger and younger people to work in their businesses, and it made it tough to maintain staff.
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I'll just hit the highlights.
Lack of access to other resources--so they don't have access to lawyers and accountants on a daily or even a weekly basis, or other sources of private financing, which might be banks, venture capital, that kind of thing. We could inform businesses of the suitable business incubators. I understand there are virtual business incubators that operate online now, and if they don't work, perhaps develop suitable facilities.
One thing that was mentioned was to try to get representatives of INAC and ABC and other federal funding programs out into the communities more, so they better understand where those communities are coming from when they approach for funding.
There is a lack of targeted programming and funding. This has kind of been my axe to grind ever since I came to the NWT. Everywhere in Canada--different programs in different parts--the federal government provides funding for specific groups, whether it be youth, women, people with disabilities, and so on. Since I've been in the NWT, there has been no funding like that. I suggest that this be looked at and some needs identified and met.
Isolation is always a problem, largely due to the transportation and cost of transportation. Better roads and better access to roads can help there.
The second part was on the support services I mentioned. Community Futures organizations are out there. We're not funded to the point where we can provide all the services we're expected to provide. Staffing and recruitment is a problem for those organizations, as well as capital, although INAC has recently helped us address the capital issues somewhat.
We suggest all of those problems, along with training, could probably be helped with a possible federal-territorial partnership for Community Futures, rather than total territorial funding.
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Good afternoon, and thanks for inviting me to be part of your presentation. Thanks for coming to the north as well.
As the head of Canada's largest and oldest northern enterprise, and as someone born and raised in the north, I am keenly interested in development issues affecting the region.
By way of background, as you may know already, we're a Canadian-owned retailer based in Winnipeg. We're publicly traded. Our units are held on the TSX. We're owned by thousands of individual investors, over 600 employees, and several investment funds, including a few aboriginal capital funds.
Today we operate 227 stores across northern Canada, Alaska, western Canada, the Caribbean, and the South Pacific. In Canada, our stores trade under the names Northern, Northmart, and Giant Tiger. Internationally, they trade under the names AC Value Center and Cost U Less. Our annual sales are approximately $1.5 billion, and we have 7,000 valued associates.
About 75% of our business is derived from food sales and related everyday products. The remainder is spread across a very wide range of general merchandise, from housewares to hardware, sporting goods, outdoor gear, appliances, and electronics.
We also offer financial services and health care services, from pharmacies to doctor recruitment.
North West is a significant investor in the Canadian north. We are the largest private sector employer of aboriginal people in Canada. Our total capital employed in the north is approaching $300 million, and our employment base in the north is 3,400 people. In addition to this direct local investment and local employment, we spend approximately $75 million a year on local services, including local freight.
While size has its advantages, for us, the success of our enterprise depends on community partnerships. We're a partner with over 40 commercial enterprises in the north, mostly aboriginal entities. We've entered into similar arrangements in Alaska and in the south. The most common agreements are store leases, but we also have non-retail partnerships. The most notable might be our shipping joint venture with three regional Inuit corporations serving the eastern and central Arctic.
Our approach to retailing is community-based in other ways. Our newest stores feature innovative green technology—one in particular in Labrador has been recognized as a leader in cold weather construction technology as well as managing efficient operating costs.
Our sponsorship of healthy living initiatives has raised over $1 million in the past eight years, and we spearheaded northern marathon teams. The idea here is that we have teams of up to 25 runners that come from the north and enter international marathons. They're part of Team Diabetes Canada. Most of these runners and walkers return to their home communities and are ongoing role models of healthy, active lifestyles.
Turning to northern development as a whole and our own direct investments specifically, we consider three elements as being critical when we consider where we're going to spend our capital and how to expand our business. Those are capacity, infrastructure, and business climate.
By capacity, I refer to knowledge and skills of the local workforce. Our industry, like the broader service sector, is people-intensive, with increasing enablement by technology and new work processes. We don't mine for minerals; for us, people are diamonds, and finding the best ones is all about our ability to grow and sustain our business.
Recently, we analyzed the correlation between the stability and capability of our local store teams and our sales in these different communities. We found, maybe not surprisingly, that the more stable and qualified our staff, the larger the store, the more local sales, and the higher the value of the wages and employment that was being generated by that store, the greater the capture of dollars that would otherwise leak into the south.
I use this example as a proxy for the entire service centre in Canada's north, which in general is severely underdeveloped. With more capacity, we envision a myriad of import substitution services that are otherwise more expensive or inconvenient to source from the south. Some possibilities are environmental services; expanded financial services, including insurance lending and income tax preparation; and facilities services, including equipment maintenance and repair. Just as a side note on that, the cost for us to repair equipment in a place like Pond Inlet would range between $5,000 and $10,000. At one of our Giant Tiger stores in Winnipeg, it would be under $500 for the same repair. So there is a gap there that you could fill with local talent if the capacity existed.
Local prescription drug dispensing through technicians is another opportunity. There is legislation in B.C. that enables this. We don't have it in the north right now.
Nurse practitioners and other sub full-position, qualified but still approved, health delivery models are also a possibility.
When we look at infrastructure, as you can imagine, we're talking about transportation, water, power, roads, broadband, schools, and health facilities. The challenges, as you've heard already and you know, relate to cost, reliability, quantity, and quality. We understand as much as anyone that in this environment it's complex, it's remote, and the climate can be harsh. But too often we think that's an excuse to justify mediocre performance—and I'm talking about our own organization. We believe northern infrastructure has to be benchmarked against the world, not only against other remote areas of the world. As well, the region's high costs, whether measured by productivity or cost of living gaps, need to be continually highlighted for attention and not misconstrued as a way of life.
All-weather roads, improved seaports, airports, more frequent and reliable air access, and technology that enables more housing stock per dollar of investment, as well as greener living practices, are all practices that would have a direct impact on the cost and quality of life and on the capacity of the region to compete.
The business climate, lastly, refers to other policies that affect direct local investment. I'm going to highlight a couple of them here and then wrap up.
In general, we find it to be a hit-and-miss proposition in the north. As one example, in Nunavut Territory we have an investment on the ground of $100 million and we employ 900 people, but when it comes to bidding for government contracts, we are considered a southern company with practically the same status as having invested nothing. So you can imagine that's not a policy that encourages a company like ours, or any other non-Inuit-owned service provider, to invest more in the north. In fact, it's a decision that helps, we believe, non-investment in the north because you can compete from the south just as easily as we have in the north.
The second area that's under review now that I'll highlight briefly is the food mail system. We've entered into an alliance with the other two large retailers in the north—Arctic Co-operatives Limited and La Fédération des coopératives du Nouveau-Québec, or FCNQ—and proposed different rules that would help in terms of streamlining.
We've identified up to 20¢ a pound inefficiency by the product running through the post office system at select entry points instead of having us manage the freight efficiently. There is a lot of waste and spoilage, as you can imagine. A 40-pound case of bananas can cost up to $4 a pound. The case alone is $4 and the shrink wrap alone could be another $5, and you have to wrap it, etc. When you turn it over to the post office and leave it there for a few days, it's not the best system.
I just point that out because we'd like to see a good outcome. We're not sure what the best answer is, but we've proposed that we be compensated based on the weight that we ship, and there can be an audit procedure. What we're proposing, really, is simplification and letting the businesses run it as efficiently as possible.
I don't want to end my remarks talking about barriers to development. I would say with confidence that these challenges still open us up for much potential for growth in the northern economy. You'll hear a lot from the natural resource industry, but looking at the service sector specifically, our company itself is a business that started in the north many hundreds of years ago, but more recently in the past 20 years we've grown internationally.
We've taken and leveraged our skill and knowledge of community retailing, cultural adaptiveness, and our remote market logistics to grow around the world. The key, we believe, has been the capacity of the people, putting people first, and then sizing up the gaps in a global context, whether measured by education, infrastructure, or the fairness of the business climate.
That's the end of my presentation. I'd be happy to answer any questions.
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As was mentioned, my name is Andrew Robinson, and I am the executive director of the Arctic Energy Alliance. I grew up in Makkovik, in Labrador, which means I've been living in the north for most of my life.
I've been with the Arctic Energy Alliance for the last five years, the last two years as the director. We are a small, non-profit organization that gets most of its money from the territorial government. We have a vision that the NWT will become a leader in sustainable energy use. Our budget right now is around $2.5 million a year, so that gives you an idea of who we are.
I'm going to talk about working with people who live here. A lot of economic development focuses on big projects, which end up bringing in mostly people who live somewhere else. But our mandate is to focus on people who live here, so that's what I'm going to concentrate on.
Our mandate is also to look at energy costs and the environmental impacts of the energy use. So we look at how people heat their homes, how they heat their businesses, how they get the power to keep their lights on, and how they can move from A to B without affecting the environment too much or spending more than they can afford.
There is a high cost of doing business in the north. It is related to the high cost of heating oil, diesel, and gasoline. Down south you have a natural gas grid, which has relatively cheap heating energy in it, or you have cheap electricity. We don't have that. We're all on imported oil, and that makes things expensive.
It's the same with electricity. The costs here are much higher than they are anywhere else. This is related to the high cost of fuel, plus what you call economies of scale. Small communities have to pay for large numbers of generators to cover a small population. You end up having to pay a lot per person.
One of the biggest issues we look at now is climate change. When we started as an organization, our focus was on the cost of energy. Now it's on climate change, because we see it as becoming a bigger issue than the high costs. With the exception of Yellowknife, most of the Northwest Territories is built on ice. I don't know if you've ever been to Tuktoyaktuk, but there's a community freezer under the ground where they store frozen things. They can do that because it's ice. When you're down there, you can shine a light and see that the ground, the earth, is this much ice and this much dirt and then another layer of this much ice and that much dirt. It makes a nice pattern when you shine a flashlight into it, but it's ice. Tuktoyaktuk is built on ice, and so is most of the Northwest Territories.
When you look into the future, which is part of what we're mandated to do, you can see that with climate change the north is going to melt, and so is the ice that most of the north is built on. This is going to have a huge impact on the cost of business, the cost of living. You can imagine what happens when the ice melts under a tank farm. It's going to tip over or break and you're going to have a massive problem trying to clean it up. It's already happening. We've seen it with sewage lagoons, roads, airports, houses. Things are starting to tip over, and it's destroying the infrastructure. Whatever you do, when you invest in business, you're going to have to deal with that in the north.
These are the issues that I see, and we've tried to come up with some solutions. It's interesting, the Northwest Territories is leading the way in a lot of things. It would be a good idea to invest more in energy-efficient infrastructure. Too often we see things that have been built with a short timeframe in mind. You build something fast now because it's needed now. As an organization, we come in and deal with poorly built buildings and infrastructure that is not energy efficient and costs a lot to operate. When building infrastructure, it's important to take the time and spend the money to build for the long term. It's important to remember that the people who live in the place are going to have to pay for operating the equipment or infrastructure.
It's the same for the climate change that I mentioned. We're going to have to look at investing and building for an unknown future. Again, whatever infrastructure, whatever project is going to be built.... Climate change is not going to make this place a warm, sunny, happy place that's nicer to live in than it was before. It's going to be a wet, muddy mess, because everything is going to melt and you'll end up with mud. You're going to be trying to build in mud. That is going to be a challenge. We have to start to think about that if we're going to be doing projects in the north. How are we going to build on unstable ground as it is disappearing?
Likewise, as the others mentioned, in terms of the kind of stuff we're talking about, building basic infrastructure on the ground, the local people can do that. We don't need to import a lot of high-skilled people. We do need to invest in local skills, trades--and university education--but for local people. I think we do see that happening.
One example is that the housing corporation here has now adopted the EGH 80 standard for all new housing. They've also committed to bringing existing housing up to that standard, and that's excellent. Right now they're investing in new housing that's built well, and they're doing it with local people so much that most construction companies that we've seen are extremely busy.
There's a similar thing that's quite interesting. I don't know if you know this, but in North America, Yellowknife is the capital in using wood pellets for heating commercial buildings. There's nowhere else in North America that has this number of units. Again, that's credited to the Government of the Northwest Territories. They've started to switch to using wood pellets that come from northern Alberta to heat.
They're cheaper than heating oil. They're much less environmentally damaging if you have a spill. They're considered carbon neutral. They're basically made out of waste sawdust, so they don't have a climate impact. Here you have the north showing the rest of the country that it is possible to build an infrastructure that doesn't use fossil fuels, and it is cheaper to run.
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I didn't bring numbers with me today to be able to give that. I can probably provide it at a later date, if you want. If you get the clerk to send me a list of what you'd like to see, I'll try to get it to him.
There are seven Community Futures in what is now the NWT. In 1995, when the federal government offered Community Futures programs to the provinces and territories, the territorial government did take it on, and from what I understand, they had big plans for it. I wasn't here at the time. The territorial government has put more money in, and they have created more organizations. Of the seven, there were only two when the turnover happened.
We are providing services to all communities in the NWT. I think there are approximately 32 communities over so many million square miles. I can't remember the exact number, but it's huge.
I think there are a lot of success stories up here. I can speak mostly for my own organization. We have clients who come to us year after year for working capital-type things to be able to carry out their businesses, and we also help people finance equipment. In addition to our own financing, we help people access other financing, whether it be from Aboriginal Business Canada, the Government of the Northwest Territories, or other organizations that might be willing to fund particular ventures.
The Community Futures program is a success right across Canada, not only in the NWT. There are 268 to 270 organizations across Canada, and some have been around for 20 or 25 years. I think it's one of the federal government's crowns, or roses, whatever you want to call them. It a program that has been around for a long time, and it has had a lot of success.
I've been involved in Newfoundland and here, and I've managed three different organizations. They're pretty similar, but they all have their own differences. One thing about Community Futures programs is that you go from one place to the other and you might find they offer different services.
Because there are so many here, given the original funding that came from the federal government and what the GNWT has tried to do with that, it is not able to provide enough funding to provide comparable services to what a Community Futures typically provides down south. You have Community Futures programs in western Canada that are getting $250,000 to $300,000 in core operating money. We have Community Futures here that are getting less than $140,000 in core money, with salary costs probably being 20% to 40% higher than what they are down south, let alone the operating costs we've all been talking about.
That's why my suggestion was that Community Futures, the people of the north, and the businesses of the north would greatly benefit if the federal government would at least become a partner again.
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On the food mail issue, the total cost is not that much. I know there is a lot of concern within INAC on capping it at $55 million; I think it's $55 million to $60 million now.
By comparison, we have 35 stores in Alaska, and the bypass system they use is a subsidy system--somewhat similar. As well, the SNAP program—the supplemental nutrition assistance program—that the Obama administration has put in place is a much more significant combined nutritional health benefit to consumers; there is no comparison.
Having said that, we've also had to deal with perceptions about whether these are being passed on, whether the subsidy is actually taking place. Together with the other two co-op groups, we've given many examples, and I'll just cite some for you here. In places such as Pond Inlet, if we didn't have that subsidy, eggs would be $11.89 a dozen, not $3.89. Bread would be $10.29, not $3.39. Milk would be $28.89, not $7.25.
So it's important, but in the big picture, it's actually not that much compared with what other northern jurisdictions are doing—specifically, the United States.
What is the opportunity cost? If you were to pull it away, you could imagine what would happen to the consumption of these products. The substitution would be to pop and chips and other things.
I've looked at this closely, and I think the analysis is still somewhat incomplete. I realize a lot of people have been looking at it. Perhaps an electronic benefit card, as in the nutritional allowance program in the United States, is the way to go; it allows consumers to spend on a list of nutritious items. Whatever it is, it should be simplified, because now I think we have one or two too many regulatory, administrative pieces to the puzzle.
Greetings, everyone.
I must say that it's a privilege to be here. In our daily work with the arts council, economic development isn't top of mind. It's rather the creative industry. I am the manager of community programs, which is part of the culture and heritage division of the Department of Education, Culture, and Employment in the Government of the Northwest Territories. It is a multifaceted role and the administration of the arts council is one part of that portfolio. I've been administering for the arts council since 1995.
Before I address the workings of the NWT Arts Council, I thought it would be good to provide some context. The arts council functions as a partner in the NWT arts strategy. In 2004, after extensive consultation with NWT communities, the Government of the Northwest Territories developed a strategy to guide programs, services, and marketing efforts on behalf of the arts and cultural industries in the Northwest Territories.
There were two departments to lead this: the Department of Education, Culture, and Employment, which I represent; and the the Department of Industry, Tourism, and Investment. In this framework, the NWT operates with a mandate to promote the arts, and the NWT Arts Council operates with a mandate to promote the arts in the NWT.
I have some speaking notes that say a little more about the vision and goals of the NWT arts strategy, but I won't go into that at this point. I just wanted to give you a frame of reference so that you could see how we operate as colleagues with a sister department.
I hope I'm not going too quickly for anyone.
Specifically, the NWT Arts Council was established in 1985 as an advisory board to the Government of the Northwest Territories, and 2010 will be its 25th anniversary. This gives us pause for some reflection as well.
The mandate, as I said, is to promote the arts in the Northwest Territories, and the means to do this is by providing recommendations to the Government of the Northwest Territories' Minister of Education. The recommendations can be on creative projects in the visual, literary, media, and performing arts and funding for those projects, and on issues and policies associated with art and artists in the Northwest Territories.
There are five members who also act as jurors. They are political appointments. They are appointed to the arts council for terms of two years by the executive council of the government. The members are chosen for their expertise in an art form or their background in the community in fostering the arts, and from all five regions of our territories.
In terms of the demographics of service, as you are probably aware there is a population of a little over 40,000 in the Northwest Territories in 33 communities, and nine distinct aboriginal language groups, as well as English and French. The NWT Arts Council also recognizes that there is increasing growth of new Canadian residents from East Asia, Africa, and Eastern Europe in a number of our communities. Most communities in the territories are very small with populations of fewer than 1,000.
My office administers the funding program for the arts council. We have an annual review, and the budget for this program is $500,000. That is in direct contributions for arts projects. It is project-based funding and not core, sustaining support to organizations, however.
For assessment of artistic projects the arts council members meet and make their decisions based on artistic merit and also on community benefit. They are very strong about seeing the relationship of an artist or of an arts organization in each community and how those ripples swing outward in terms of promoting and engaging people in doing arts practices.
There are funding priorities set by the arts council. I will leave you to see those in my speaking notes. I'll carry on to describe some of the disciplines we serve, and maybe where the role in support to the cultural industry and the economic development portions would be.
The arts council supports audio recording of voice and music, performing arts in all categories of dance, music, storytelling, and theatre. Storytelling is a particularly evocative tradition that is natural to some of the cultural context of our territories, and the arts council recognizes this and supports it in a large way. Writing and publishing, visual arts, crafts, and film and media arts are also supported.
The arts council reviews applications from individuals or organizations through three different stages tied to the arts and learning mandate of our Department of Education. The first is creative development. That is to say, people need to acquire the skills to do their art form and they can achieve that through some forms of training, workshops, or self-study. Learning from others and mentoring are large in our smaller communities as well, as generations pass skills on to the next.
Creation and production are actually doing the work, creating the works, once you have acquired those skills. The purpose of arts council funding is to support the creation of those works and then to think about how they might be disseminated or achieve public access.
That brings the third tier, public presentation. Through travel support, arts council will support someone to present their art work or storytelling or to mount an exhibit of their work in another community in the NWT.
One of the barriers right now is that we don't support our artists outside of the territories, so touring is really not a program of support through the council. This is for budgetary reasons primarily. I think there could be a day where we will be able to help to sponsor our artists abroad.
I will close by saying that the arts council office and my office provide a lot of assistance in coaching through proposal writing and in helping organizations determine their strategic planning, all in the context of what project support might come through arts council, bearing in mind there are other funding agencies as well. This is where we cooperate with our sister department in the GNWT, with Canada Council for the Arts, with Heritage Canada, and with other agencies. We provide sample budget sheets and proposal templates and offer those alternate sources of support where they might be applicable.
I thank you very much for your interest in us, and I'm certainly interested in the conversation that will follow.
Thank you.
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Thank you very much, Mr. Chairman.
My voice is a little bit rough today, so I appreciate your bearing with me.
I'd like to thank you for the opportunity for the Federation of Labour to present our views on aboriginal affairs and northern development. As well, to the committee members, thank you for taking the time to travel to each of the three northern territories to hear from northerners about the concerns that we have.
I understand that my colleague Alex Furlong spoke to you in Iqaluit yesterday. Our Federation of Labour actually covers both the NWT and Nunavut, so I will be speaking primarily on those two territories.
No study of northern economic development would be complete without taking into account the socio-economic indicators that drive our northern reality. Building bridges, pipelines, roads, and mines won't improve the lives of northerners without a serious investment in social infrastructure.
While there are many aspects of northern living that require attention, today I will talk about three fundamental areas that need to be addressed immediately: unemployment, lack of housing, and the high cost of living.
I am hopeful that other presenters in your visits across the territories will outline the importance of settling outstanding land claims; the serious impacts of family violence, specifically the high rates of violence against women; escalating rates of suicide; the need for effective pay equity legislation; and implementing measures to reduce the wage gap between the rich and the rest of us.
On the issue of unemployment, from July 2008 to July 2009 the employment rate in the NWT fell to 66.3%. According to our bureau of statistics, this is the largest change in unemployment rate in any jurisdiction in Canada. Out of our potential working population of 31,500 persons, 1,500 are unemployed and 9,000 are not in the labour force, and they're not in the labour force largely because they've given up looking for work. This means that 33% of NWT residents are actually unemployed. And if you take into account that the NWT is actually the only jurisdiction in Canada that's losing population, this is a relatively conservative number.
The situation in Nunavut is much worse. According to the Nunavut Bureau of Statistics, the total potential working population in September 2009 was 18,600. Of those, 1,700 were unemployed and 7,100 were not in the labour force. This equates to 47% of Nunavummiuts are not working. And if you only take into account the Inuit population, this rises to over 56%.
The Northwest Territories and Nunavut, with the highest percentages of unemployment, are also the only jurisdictions in the country without our own EI board of referees. What happens when a resident of either territory wants to appeal an EI decision? They have to go to the board in Edmonton, Alberta. Workers and employers in the NWT and Nunavut do pay huge amounts of money into a federal EI system that is largely inaccessible to us. If a worker is laid off and lucky enough to access EI, the level of benefits are insufficient to live in the north, so they end up moving south, adding to the out-migration I spoke of earlier. There needs to be some form of indexing EI benefits to adjust for regional costs of living.
The other really important issue that relates to unemployment is education. Sadly, the number of students who graduate from high school is less than 70% in the NWT, and as low as 42.6% in Nunavut. Statistics Canada figures show that rates of graduation from post-secondary institutions are just as bad.
I know that education is technically a territorial responsibility, but the federal government does need to recognize that children cannot learn effectively when they are crammed into over-crowded houses, lack basic health and dental services, and have no access to affordable, nutritious foods. So funding in all these areas needs to be increased.
On the issue of the lack of housing, in 2004 the Right Honourable Adrienne Clarkson stated:
...the conditions in far too many aboriginal communities can only be described as shameful. This offends our values. It is in our collective interest to turn the corner. And we must start now.
Unfortunately, almost six years later, northern aboriginal and Inuit communities are no better off.
According to the Yellowknife Homelessness Coalition, in October 2008 Yellowknife had a vacancy rate of 0.7%, and 34% of households were spending more than 30% of their income on shelter.
My brief has a lot of other statistics about the serious rates of housing. I'd like to highlight in this area that in Nunavut there are situations where people aren't classed as homeless because they have shelter, but they're sharing shelter. They're living in shifts in one house. So if it's someone's time to go to work, they go to work, and when they come home they kick somebody else out of the house so they can have a space to sleep. There's just not enough room in the houses for them to even sleep.
One of the most disastrous outcomes of this lack of housing is poor health. Nationally, eight out of ten Canadians had contact with a medical doctor in 2008. In NWT it was one half of that, and in Nunavut only one out of ten residents had access to a doctor. In both of the territories the infant mortality rates are far greater and the life expectancy of those who do live is much less than the national averages. Northerners, especially our aboriginal and Inuit peoples, are plagued with health problems that put them on a par with some of the poorest parts of the world. In a country as wealthy as Canada, this is unconscionable.
:
I'm glad to be here. It was kind of short notice for me. I just got off the plane a little while ago, so I'm a bit jet-lagged, but I'm used to it.
Mary hit the nose right on the button about the cost of living and the shortage of housing. I find 20 people in one house, sometimes. It's a fact up there in Nunavut and in the Northwest Territories, right in our backyard.
The jobs that do come up there are few and far between. We're used to no work, sometimes, and then when the jobs come up with oil companies, it's all labour. They hire us as labourers because our education is limited. We don't want to move away from home. We want to be with family. Grandparents look after the children.
The cost just to go out on the land.... For instance, when I used to trap, it was a lot cheaper to go out, to charter a plane, to go 150 miles or so to where the marten are, southeast of our community. Just to charter a plane was $400. Now to go over there it's over $3,000, because we have to get a plane now just to go from Norman Wells to Inuvik and to Tuk and fly out from there.
We have two avid trappers out there still: Billy Jacobson and George Unalize. They've trapped all their lives and they're out there 24/7. Just as an example, just to go out there, it cost them $3,000 one way. They try to make ends meet by doing a little bit of trapping. These guys are in their seventies, and they're trying to make a living at it. Just to break even, they get a little bit of fur, which costs the price of gas to fly out. There used to be a trap funding for that. We have that, but it's about $3,000, and it goes out to those guys to try to help them with the cost of chartering a plane. You can see that they want to come home for Christmas and sometimes they can't. It's hard for them to get the marten sometimes because of the weather and global warming, as they say, the climate change. It's hard just to go out because the lakes are not thick enough sometimes. There's too much overflow.
That's about all I have to say.
In my presentation I'll bring a lot of the experience I have, partly as a negotiator on the Tlicho land claim agreement, so I might bring some self-government elements to it.
With regard to taking opportunities and dealing with the barriers to economic development in some of our smaller communities, the northern communities are no different from any other aboriginal community across Canada. We all have social problems. We're dealing with alcohol and drugs and gambling. That leads to a lot of other problems with younger people being left home alone and not having the advice they need to further their education.
Of course they'll have to go through a fairly large healing process, and that is usually very expensive. I'm from one of the Tlicho communities, so when we run into these problems we approach the territorial government for counsellors to come to our communities. But there's no money for it. So because of the opportunities and benefits that flowed from BHP, for instance, we trained 30 alcohol and drug counsellors and we now have 30 alcohol and drug counsellors in our four communities. So we've had to take our own initiative to try to deal with some of the healing in our communities.
All the social problems we encounter in our communities follow the education problems we have. It's true we have growing numbers of graduates every year. Fifteen years ago we only had three people in post-secondary education. We now have over 100, and that's because since the settlement of land claims we've been able to set up a scholarship committee and subsidize students to go to post-education institutions.
Over 85% of those students graduating are young ladies, and just about 100% of them want to come back and either work for Tlicho government or one of our businesses. So I think that's money very well invested.
We're also finding that even though students are graduating, there's still a low literacy rate. They're not quite meeting the Alberta standards in English, for instance. Therefore, as the vice-chairman of Aurora College, I'm also dealing with that, in terms of students having adequate training to take on some of the courses.
Also, with the opportunities available to us, particularly with the diamond mining companies and the tourism business in our area, there seems to be a lack of opportunity for career exploration and counselling. Right now a lot of students become secretaries, bookkeepers, teachers, and social workers. There's nothing wrong with all of that, but a lot of the careers in the mining companies, like engineering and higher positions in the mining companies, or even business, require the matriculation courses: English and math 10, 20, and 30. A lot of them take some of the weaker courses, and therefore they can't take the courses that are required to take on the jobs that really do pay well.
That also has an effect on the training. There really is a lack of business training--upgrading is required--literacy, and life skills; therefore, we have a long way to go before we start putting on some business courses.
But a lot of people are very interested in it. There's no shortage of experience in the communities. A lot of people have worked in various areas because they take whatever jobs become available. We just have to build on that experience.
Running a Tlicho government makes you realize that when you run a government people require a lot of services. To fund these services, every activity costs money. Therefore you have to put some thought to the economic arm of the government. So dealing with these barriers to economic opportunities is something close to our minds, at the forefront.
As people come forward to the territorial government and the federal government they say they need training for mining, they need more teachers, they need more people trained in the language area. Funding does come, but it usually comes for specific types of programs, and in the communities the solutions are not vertical, they are horizontal. Therefore, none of the courses that are required are stand-alone; they all sort of play a part, flipping over one another.
:
I'd be happy to answer that.
Since 2004 we have assessed 932 individuals, trained 632, and 500 of those got employment. The reason it is successful is, one, that it's a partnership approach between industry, aboriginal governments, and public government. It's one place were politics are dropped at the door and there's the focus and the mandate to get aboriginal people and northerners into long-term, sustainable employment.
Part of the success rate is because of the way we have incorporated tenets of the medicine wheel into our training. We deal with the learner as whole person, as opposed to just a brain that's learning some stuff. When we do our training we try to start it in the community, because people are in their comfort zone.
Our program for underground miners, which is the biggest need for the mining industry right now here in the north, has actually won a premier's award for collaboration and excellence. It's in three different phases. It starts in the community, and all the people there are introduced to the concept of mining. Some people have never seen mine equipment, but we bring in simulators to show that, and we talk about job-rating their skills, and we also do an introduction to underground mining.
Then we bring them into Yellowknife, and we always make sure that two people from one community come, so you have that safety guard right there with you. You have someone who has your common experience. We do training with our partners at Aurora College. We've had investment from the federal government in our program in buying a mine simulator. Aurora College is the only public institution that actually has a mine simulator where we can do safety training. It's like the things you'd use to teach pilots how to fly planes, but now we're teaching people how to drive haul trucks underneath the ground in a very safe environment.
:
Good evening. I was going to say “ladies and gentlemen”, but it looks like it's all gentlemen at this point.
Bonsoir, mesdames et messieurs. As was pointed out by my parliamentary intern, there are other ladies in the room. Thank you very much.
Ladies and gentlemen, it's been too long of a day. One tends to slip up on these things as we get into hour number nine, as we finish up our day today.
We're delighted to have you with us, and we'll get to introductions in a moment.
We are essentially taking up, as you probably realize, consideration of the advancement of economic development in Canada's north, principally the three territories.
This is the second of three stops we're making in each of the territorial capitals. We were in Yukon on Tuesday and yesterday, we are here in Yellowknife today--and we'll be on a tour tomorrow before we depart--and next week we'll be in Iqaluit. These three visits are part of a larger and longer study on the whole topic. Most of the witnesses we'll hear from on this question we'll be hearing from in Ottawa. But we are delighted to be here in the territory, hearing from people and getting a true flavour of some of the issues that are in front of them in advancing this question.
We have a total of three organizations here tonight. As is customary, we'll ask for presentations from each of the three organizations, after which we'll go to questions from members, and there will be time limits on the questions.
I think some of you may have even been here, perhaps, witnessing how the last session went.
We'll begin with a director, Mr. Fred Koe, from Northwest Territories Métis-Dene Development Fund Ltd.
Mr. Koe, you have five minutes, or thereabouts. If it stretches to six or six and a half minutes, that's okay too, but in the interest of time we'll try to hold it at that. That will apply also to our other presenters here tonight.
Mr. Koe, you have the floor.
:
Merci, Mr. Chair, and welcome, committee, to our north.
Drin qweenzee.
I quess I can say I'm a true northerner from the Gwich'in Nation in the western Arctic, and I represent the Métis-Dene Development Fund, of which I am a director. We've submitted a brief to your clerk, and they will get them interpreted and passed around.
I just want to highlight some of the main points in the brief and focus on what we consider to be some of the barriers and some of the solutions, which I believe is your focus.
The Métis-Dene Development Fund, and I'll just use the acronym MDDF, was formed in 1991 under the Canada Business Corporations Act. We have two shareholders, the Denendeh Development Corporation and the NWT Métis Development Corporation. Over the years, we have lent out in excess of over $12 million to more than 200 Métis and first nations businesses in the north. Currently we have about 60 active clients, and we cover just about all sectors of the economy.
In the last year we've signed a new agreement with the Department of Indian and Northern Affairs called SINED, and that's a new one where we're now expanding our lending to non-aboriginal businesses in the Northwest Territories. The total loan capital for our corporation is now about $6.5 million. That's quite a leap from when we started, with just over $2 million.
Again, I'm just very quickly going through some of the highlights. I'd like to focus on some of the barriers to economic development, and I'm sure you've heard these. I've seen some of the briefs that were presented, so I'm sure there will be some repetition.
Underfunding, the ability to get equity to start up businesses, is one of the issues for organizations such as ours and others that are in the business, and it affects their ability to service and be in the smaller communities where people can access the services. After care is a huge issue because of the limitation of trained and expert people in smaller communities.
Another area is mentoring and job shadowing.
Bookkeeping is one of them as well. Again, businesses tend to centre in the larger communities and they try to service everywhere from places like Yellowknife, Inuvik, and Fort Smith, and of course they don't get into the communities where we want to keep our business people.
Technology again is an issue, such as high-speed Internet, e-mail, cell service. All that is a boon to having good business, the access to information and access to banking services that we in bigger communities get very used to. It's very difficult.
Procurement is another area where we feel there's a bit of a barrier because in the north we usually go south to get cheaper goods and services, which doesn't really develop the manufacturing or supply end of things in the Northwest Territories. And there are your freight costs. You guys have been travelling, and you're going to go to Iqaluit. You know the distances you have to travel; we do that as a matter of course.
Seasonality, with our short construction season, is another issue for many businesses that are in construction, and especially for ones that rely on government contracts and have to do their work in two to three months. Again, the profitability of trying to do that or do rush jobs is very difficult.
Banking is another one, getting access to capital or even payroll services. You need cash to do some of your business. Most places have a northern store or a Co-op store, and it's very difficult to access cash. So banks or other types of services that provide cash are a necessity. We talked about human resources a bit, the need for trained people and skilled people. You heard from the mining industry about the lack of skilled people and the need to train people to do work for them.
Government is an area where...there are a lot of agencies involved in economic development, both federal and territorial. Again, they do a lot of good work, put out a lot of good brochures, but really, at the end of the day, it's what gets down to the business level, and we find that a bit lacking. We need governments to not only talk the talk, but also walk the walk.
I'll talk bit on some of the solutions that we feel could help. One is funding for start-ups, equity funding or loan guarantees to assist businesses getting started. It's always an issue. You have lots of good people who want to start a business, good tradesmen especially. It's very hard to get funding to start up. Our aboriginal finance institutions and our Community Futures in the north have very limited funding. We're trying to service a large area--a small population but a large area--and we're always stretched thin. A lot of our money seems to go towards administration, which means less money for the actual customers.
:
Mahsi cho, honourable members of Parliament. Welcome to Akaitcho territory. As a former member of the Government of the Northwest Territories and the legislature and as a former chair of standing committees that travelled throughout the territories giving public hearings, I understand the challenges that are faced by the honourable members here today.
My name is Steve Nitah. I'm the chief of the Lutsel K'e Dene First Nations. I'll be making a presentation on behalf of the Akaitcho Dene First Nations that are negotiating the implementation of the treaty of 1900.
With me today, along with Chief Ted Tsetta, is Sharon Venne, our technical advisor to the process.
There is a large workshop going on in my community right now—a governance workshop. We flew out of there at five today, and we'll be flying back to Lutsel K'e this evening to continue the workshop tomorrow. So we all have very busy schedules.
The presentation I will give this evening is in two parts: one on economic development, and another on political development that speaks to decision-making in the jurisdiction.
Thanks for giving us this opportunity to speak. We have prepared a statement, which is in the package of materials. I'll give a short summary of the presentation. To the members who are French-speaking, we apologize. We did not have the time to prepare our documents in the French language, but we will provide documents in that language. As Dene speakers, we understand the importance of communicating in the language we are comfortable in.
As I indicated, we are Akaitcho Dene. We number nearly 4,000. There's a map in our presentation. We have an approximate land mass of 468,000 square kilometres, which is, by the way, larger than the state of France. We have the largest non-Dene population living within our territory—that is, the city of Yellowknife—which presents unique challenges and opportunities for us in Akaitcho.
Our forefathers negotiated and concluded a peace and friendship treaty with the crown in 1900. At this time, we are in the process of negotiating with Canada on the understanding and clarification of rights within our territory for Dene and non-Dene alike. We are preparing 17 chapters of the proposed 23 chapters of the Akaitcho agreement. We will table these chapters with the federal government in March 2010. I will return to this later in my presentation.
While we have been busy trying to find solutions, Akaitcho has not experienced a similar benefit. At this time, our territory contributes more than 51% of the GDP of the Northwest Territories. We are the economic engine of the Northwest Territories, but we do not see tangible outcomes from our contributions.
Let me review very briefly, gentlemen, some of the efforts Akaitcho has been engaged in for the development of solutions that support economic development in the Northwest Territories.
In March 2001 we negotiated an interim measures agreement with Canada and the Government of the Northwest Territories. Then there was a ministerial directive to clarify the operation of the interim measures agreement and give further guidance on the issue of permits and licensing within Akaitcho territory.
In November 2006 there was an order to withdraw 1,034 hectares within the city of Yellowknife. It was a unique withdrawal within a municipality. Akaitcho believes that this was the first such withdrawal within a municipality in Canada. In addition, there was a special feature of the withdrawal. There is an opportunity to have an economic project on some of the withdrawn lands. In the three years since the withdrawal, we have not been able to take advantage of this unique feature, since we are unable to get an interim economic package from the federal government, which we were negotiating as a companion to this withdrawal. Unfortunately, there was a change in government and a change in direction.
We would like support from the committee members for an interim economic package so we can take advantage of the specific and unique language of the land withdrawal within the city of Yellowknife. In November of 2007 we withdrew lands for a proposed national park and other lands. This is a further indication of Akaitcho's attempt to provide Canada with a level of comfort within our territory.
The Akaitcho Dene have developed mineral exploration guidelines for companies wishing to conduct mineral exploration activities wholly or partially in Akaitcho territory. The Akaitcho Dene took this step following the Supreme Court of Canada decision in the Taku Tlingit case. In that case, on the issue of consultation, the Supreme Court of Canada said that first nations should indicate the level of consultation they would like to see within their territory.
Well, Akaitcho has been trying to work with industry and government. The federal government put in place a northern economic strategy with the creation of a northern economic development agency. As Dene, we want to be involved in these kinds of discussions when we are providing the stable environment for industry to take place within our territory. We have a lot of questions concerning the new agency set up by the federal government, and we raise three at this point. There are other questions in the presentation package.
First, what was the level of consultation with the constitutional rights holders prior to the government's announcement? None.
Dene chiefs should have been involved from the beginning in shaping the structure and the policy and priorities of this new agency.
Three, it is totally economically driven by the needs of the south. What about the needs and aspirations of the Dene in the north? The development of the agency is in marked contrast to the findings of the Harvard Project. We are raising it in our presentation as it has direct relevance to your work and our work.
Let us turn to some of the key indicators and findings of the study.
One, control of decision-making is essential to economic development. Let me emphasize this point. When a body outside of an indigenous nation makes the decisions, economic development does not work. This cannot be overemphasized.
Two, self-governance alone is no guarantee of success. The Harvard study found that sovereignty was essential. What did sovereignty mean for the study? Sovereignty meant the ability to make your own decisions. The most successful indigenous nations were the ones that could create the environment in which investors felt secure.
Three, what is a good governance structure? There must be a strong dispute mechanism that guarantees people that their investment will be secure. In the Akaitcho negotiations, we looked at nine agreements with chapters on dispute resolutions. Our conclusions were that these chapters are not workable since the dispute mechanisms were not built on indigenous values but rather on non-indigenous values. An Akaitcho independent study came to the same conclusion as the Harvard study.
Four, good governance requires human input at all levels of institutional development. There must be people within the indigenous leadership who can articulate a new vision for the nation's future based on Dene values and beliefs. There must be a willingness to understand and encourage the foundational changes that such a vision requires. There needs to be strategic thinking to move away from crisis management and opportunistic quick fixes toward long-term decision-making that incorporates community priorities, concerns, circumstances, and assets. That means looking at all the indicators and making strategic decisions rather than quick fixes.
Our elders understood the process of strategic thinking, which allowed them to survive in Denendeh. These values must be used and incorporated into the daily decision-making of the Dene.
The Harvard study found that the most successful indigenous nations have good governance structures. The governance models must match indigenous concepts of how authority should be organized and exercised. Institutions and models designed for non-indigenous people and imposed on indigenous nations are a recipe for disaster. The Harvard study found that quick fixes do not work.
What is a quick fix? A quick fix is where decisions are made to solve all indigenous nations' problems rather than building a strong, basic, incremental economy. Most of the quick-fix solutions that were investigated had common problems. Indigenous nations let the federal government make this decision for them. The federal government decided what projects would be funded and what projects would not be funded. This effectively removed the development agenda from the indigenous nations.
There was no strategic work with indigenous nations by the federal government so that the indigenous nations could set their own priorities and think carefully about them.
:
Just before I start, again, thank you for giving me the opportunity to share some of the concerns and the barriers and proposed solutions for economic development here in the Northwest Territories.
Denendeh Development Corporation is 100% owned by all 27 first nations communities in the NWT. We work to create long-term Dene economic self-sufficiency, and we hold interests in not-for-profit investments in—and you heard the first presenter, Fred Koe—the Métis-Dene Development Fund and a fine traditional art store. If you stay at the Explorer Hotel, you'll notice that Arrowmakers Fine Traditional Art is there. It supports northern aboriginal artists. We hold investments in oil and gas drilling, communications, real estate, power generation, and pipeline construction.
I'm just giving you a brief background of where we're coming from; then I'll give you a brief background on NABA and where it's coming from.
Getting right into it, you may have seen a recent TD Bank study that concluded that increased mutual economic cooperation between aboriginal people, business, and government was having a positive impact on the social well-being of aboriginal people across Canada. I believe that report was recently sent right throughout the nation. This is echoed in Calvin Helin's best-selling book, Dances With Dependency. I'm sure many of you have seen or heard of the book, and I believe Calvin sits on the social committee with the Minister of Finance.
As first nations complete land and self-government agreements with Canada, they're emerging as economic forces, with land bases and control of the resources and capital. With that as background, we at DDC and NABA hold an annual aboriginal business conference. The theme of that conference is establishing economic cooperation. Next year we will be jointly holding it with the NWT Chamber of Commerce, again under the theme of establishing economic cooperation. Annually we have resource development corporations, whether in the mining industry or the oil and gas industry, and governments, the private sector, and aboriginal businesses come together to share some of their knowledge and to look at creating partnerships and investments, etc.
I'm going back and forth a little bit, so bear with me.
In the NWT, aboriginal people have or will have direct control over more than 360,000 or 400,000 square kilometres of land, with both surface and subsurface rights. Right now, I believe, the Inuvialuit have over 90,000 kilometres, the Gwich'in have about 56,000 square kilometres, the Saulteaux about 40,000 square kilometres, and the Tlicho about 39,000 square kilometres. Right now, for the Dehcho and Akaitcho, which haven't completed their processes in treaty implementation and the Dehcho process, I have numbers, but they were sourced by Indian Affairs, so I don't know whether they're right or not and so won't verbalize them here, because those two are still under negotiation.
Turning to economic statistics, again as a background, the GDP growth rate here is over 13% compared with Canada's 4%. The economy has grown from almost $2.5 billion in 1999 to a little over $5 billion in 2008. That's an increase of about 136%. The per capita GDP in the NWT is about $125,000, over twice the national average of $48,000.
Again, this was last-minute, so I sourced this information from the GNWT, just so you're aware, if it wasn't brought out before.
Going back to NABA and aboriginal business in the Northwest Territories as a background, in 1982 there was a handful—maybe about 20—of aboriginal businesses registered in the NWT. In 2006-07 the Denendeh Development Corporation compiled a database. We did a study and found that there were well over 561 aboriginal businesses operating in the Northwest Territories. That's a huge growth. If you look at the NWT business registry, there are 5,000 operating businesses registered here, of which 2,500 are non-resident and 2,500 are resident. Of the 2,500 that are resident, over 500 are aboriginal businesses. I wanted you to see it in that context.
The question is, are the NWT aboriginal businesses benefiting from the strong NWT economy that I spoke of earlier? I think that's the question we need to keep in our minds in looking at the numbers. We have all these numbers--$2 billion from one mine being sold, so much for the oil and gas industry....
I want to get to the barriers now.
:
Thank you for those questions.
The interim measures agreement is just that, an interim agreement that allows for Ottawa to give us some financial resources to set up an Akaitcho screening board, which doesn't have the same authority or legislative backing as the Wek'èezhìi or other boards created in the Mackenzie Valley. This board consists of two members from each of our first nations, working with administrative staff. It centralizes as a one-stop shop the ability of interested companies that want to do exploration or other activities in the Akaitcho territory.
The office receives the permit applications and reviews them in terms of their technical aspects and determines which of the first nations would be impacted the most. It then sends the application to the affected first nations with recommendations of how to respond. It simplifies exploration activities in the Akaitcho territory.
The 17 chapters that I speak about are out of the 23 chapters that will make up the Akaitcho agreement and the implementation of the treaty as we agreed to at the time. What has happened there is that the federal negotiating team gave us an offer, back in March of this year, saying the progress being made at the main table was not sufficient and suggesting therefore that we develop our own language to these chapters.
We agreed to do 17 chapters. We started the work, effectively, in August of this year. We're working towards finalizing those chapters by the end of this calendar year so that we can take those chapters to our membership for their review and approval. Once they approve it, we will submit that to the negotiating team, the federal government. We can provide the committee members with copies of the chapters. Once the federal government receives the chapters, they will review those chapters and determine whether there's enough common ground between the Akaitcho and the federal negotiating team to see if there's a willingness to pursue further negotiations. If there's a willingness, the negotiations will continue.
Hopefully we'll finalize the other five chapters to have an agreement in principle by the end of fiscal year 2010 and an Akaitcho agreement shortly thereafter. If that doesn't happen, the work we've been doing in creating a positive investment plan in the Akaitcho territory would be jeopardized.
As I indicated, the Akaitcho territory is the economic engine behind the Northwest Territories. Three of the diamond mines are within our territory. The fourth one that's under consideration, the Gahcho Kué De Beers project is in our territory. Avalon Rare Metals is in our territory. There's more to the west. There's uranium to the east and gold around here. The only commercial fishing in the Northwest Territories is happening in our territory, and we haven't benefited one cent from Canada yet.