May 2013

The North comes of age

Federal and territorial government initiatives to increase northerners’ say in resource development

By Vivian Danielson

New legislation and a major power transfer agreement are set to transform the investment climate in Canada’s North. In March, after decades of negotiations, the Northwest Territories came to an agreement with the federal government to set devolution day for April 1, 2014. The deal effectively transfers management of land, water and resources to the territory, more than a decade after Yukon welcomed devolution and greater control of its land and resources in 2003. Nunavut has also hired a negotiator to begin its devolution process. At the same time, Bill C-47, the Northern Jobs and Growth Act, has passed Canada’s House of Commons and is poised for Senate approval, setting the stage for northerners to control their own economic destiny.

Tom Hoefer, executive director of the NWT & Nunavut Chamber of Mines, said Bill C-47 is one of several initiatives targeted to improve northern regulatory regimes. “It also fulfills outstanding government obligations under land claims and that’s a good thing,” he added.

Along with amendments to Yukon’s Surface Rights Board Act, Bill C-47 creates the new Nunavut Planning and Project Assessment Act (NUPPAA) and the Northwest Territories Surface Rights Board Act. The Nunavut Planning Commission will serve as the single entry point into a more streamlined regulatory process. In the N.W.T., the new surface rights board should help resolve contentious land-access disputes.

The new legislation is a necessary step as the federal government devolves non-renewable resources and land management to northern jurisdictions, said Hoefer, adding that there is more work to be done. Both the Northwest Territories and Nunavut are viewed less favourably by industry than Yukon – which has gone from no mines to three since devolution and has experienced an exploration boom - due to less perceived risk associated with regulatory and permitting processes.

Chris Hanks, vice-president of environmental affairs for Newmont Mining Ltd., was involved in industry consultation for Bill C-47 and views it as a major step forward. “None of us got everything we liked, but Canada listened to our concerns,” he remarked. Hanks worked most recently in Nunavut at the Doris gold project near Cambridge Bay.

The NWT & Nunavut Chamber of Mines and the Prospectors and Developers Association of Canada support Bill C-47 with six proposed amendments: ensuring assessments are completed within 24 months; defining types of work exempt from screening; choosing a flexible approach to deal with minor variances; deleting offences under land-use plan provisions since they are more appropriate in permit issuing stages; clearing up how existing licences or permits are grandfathered into the new system; and the planning of a five-year review of NUPPAA.

Ensuring clear timelines is essential, said Hanks, as northern projects face high costs and logistical and weather-related challenges that require diligent scheduling. “If you’re getting ready to mobilize and miss the schedule even by a few weeks, it could cost several million dollars and a year of time,” he explained. Hanks also said the offences provision should be resolved as existing regulations already provide penalties and remedies for environmental offences. “We could not find another jurisdiction where it is an offence to be in violation of a land use plan.”

With C-47 in place, Hoefer said amendments to modernize the Mackenzie Valley Resource Management Act (MVRMA) are needed to improve the N.W.T.’s investment climate. “It’s the missing piece, but it’s in process, and we’re anxious to see it improved.” Currently, four regional boards grant permits to resource companies, all under MVRMA. Smaller panels tied to land claim settlements also exist, and the number of panels could grow as unresolved land claims are settled. (Nunavut, in contrast, has a single land claim settled years ago). Aboriginal Affairs and Northern Development Canada proposes to consolidate the regional boards into one large all-encompassing board, although some N.W.T. Aboriginal groups are resistant.

Hoefer believes that regulatory reforms are necessary to sustain mining as the largest private sector contributor to the northern economy, and the largest employer of Aboriginal Peoples. Meadowbank, Nunavut’s only mine, contributes 15 per cent of GDP, while mines in the N.W.T. contribute 30 per cent of GDP (or 50 per cent indirectly). Since 1998, diamond mines alone have contributed $8.5 billion to northern and aboriginal businesses.

“But people see these mines coming to an end,” Hoefer said, noting that the first closure, the Ekati diamond mine, is set for 2019. “They understand why we need to look to the future.”

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