Northern Public Affairs

Irlbacher-Fox: Northern Governance and the Economy — Thinking About the Big Picture

Our Northwest Territories correspondent, Stephanie Irlbacher-Fox, on the Northern Governance and Economy Conference, the continuing devolution negotiations, and the “big picture” for communities.

 
The NGEC 2012 Conference as Muse
 
[dropcap_1]F[/dropcap_1]rom October 10-12, 2012, approximately 170 academics, Northwest Territories residents, and representatives of business, government, Indigenous, social, economic and environmental organizations met together to discuss how social and economic issues affect one another and how the NWT economy turns on these interrelationships. The major sponsor of the Pathways to Prosperity conference was the Social Sciences and Humanities Research Council, for the purpose of sharing academic research results with Northerners. The conferences complete program is available here.
 
“I had never thought about all these things as connected before,” wrote one participant in their conference evaluation. “This conference helped me understand the big picture.”
 
The Big Picture is often missing when NWT residents are confronted with having to make decisions — or live with decisions about — major social and economic issues: devolution, regulatory reform, resource revenue sharing, infrastructure spending, resource extraction, exploration and their social, cultural  and environmental impacts. This conference was in part about creating the time and space for residents from places like Tulita and Paulatuk, Lutsel’ke and Hay River, to listen to and question industry leaders, academics, social activists and community members’  analyses on such big issues. And more importantly, challenge research findings and conventional wisdom through the prism of lived experience that tends to complicate both policy choices and critiques of those choices.
 
“Government and industry come to our community and want to meet with us about these resource development projects. But people don’t want to meet with them, we are fed up. We don’t have houses.  It’s too expensive to buy food for our families.” Such powerful sentiments as these, spoken by a Paulatuk resident, forced participants to think about what larger issues look like from the other end. And also forced us to think about: what do we want as a society? Right now, and in the long term?
 
Both the Premier and the Minister of Industry were good enough to come to the conference and give keynote speeches on the NWT government’s vision for the economy and society. Strong growth predicated on resource extraction — an industry valued at 1/3 of the NWT’s yearly GDP  — was a key message. In their view, this territory’s present and future is being built largely on resource extraction.
 

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The Big Picture
 
[dropcap_1]B[/dropcap_1]ut other things are happening that complicate how growth in that sector will impact residents of places such as Paulatuk and Tulita.
 
One of the key themes of the conference that emerged was that the big picture — how different policy elements and events work together — will shape the future over the long term. Right now we have a heavily indebted government, constrained by previous infrastructure spending commitments on projects such as the Dehcho bridge that is, to say the least, questionable. The GNWT is currently completing negotiations on a devolution agreement. While everyone agrees that devolution — the transfer of authority over Crown lands and resources to Northern governments (read: Indigenous governments and the GNWT) — is desirable, the deal being negotiated has garnered considerable criticism by Indigenous governments and independent observers. The resource revenue sharing deal associated with that devolution agreement allows Canada to keep most resource revenues under a resource royalty regime that sells oils and minerals far too cheaply. And when you sell it that cheap — you cannot share, it would seem. So while Northern governments will see small benefits from that deal, they are a pittance compared to what Canada gets to keep. Those who observe that the NWT receives a huge transfer payment from Canada every year are correct — but that criticism incorrectly forgets to take into account how much less the NWT would cost Canada if only the resource royalty regime would be changed. (For more on this issue, see my previous blog post).
 
But before Canada hands over some authority to the NWT it has decided to “streamline” the patchwork, incomplete regulatory system here. The efforts to streamline include shutting down the hard-fought regional resource management boards established through the Dene/Metis land claims. As Willard Hagen observed at the conference: “In small communities, one job can feed more than one family. It supports other people to go hunting and be on the land.” So in places like Fort Good Hope, cutting those few jobs will make a big difference. Instead of having a sense of local control, a single board located in Yellowknife will make decisions.  Efforts to streamline do not include putting more effort into reaching land claim deals with Akaitcho and Dehcho, and so completing the regulatory system through provisions in those agreements addressing Akaitcho and Dehcho resource management participation. Nor does streamlining seem to involve making changes for a more expedited decision making system within Aboriginal Affairs and Northern Development Canada (AANDC). The frustration with AANDC delays has reached an unprecedented level with industry: in the November 2012 issue of Up Here Business magazine, the President of Fortune Minerals is quoted as saying, in reference to a AANDC Ministerial decision on its NICO mine project: “I’d like to think the Minister is not going to fuck the dog on this one.” This is important stuff — because under Devolution the GNWT is now talking about leaving some of the responsibilities under the Mackenzie Valley Resource Management Act with Canada.  Possibly leaving decision-making power or environmental assessment responsibilities with the federal Minister does not bode well for fixing any of the substantial issues with the regulatory system.
 
And as of writing, the Harper Government ™ has introduced NWT Surface Rights Board Act. Contemplated in land claims, creation of the board was allowed to languish – until the regulatory reform process opened an opportunity to create yet another structure pulling away authority from the regions. Legislation for implementing this particular element of land claims was introduced without adequate funding for land claim organizations to take the time to consider the matter, at a time when regulatory reform and devolution negotiations were at critical moments and required attention. The board will consist of federal appointees, of whom only one must be from the region where a dispute is being heard. As final arbiters of access rights, its’ decisions may trump the wishes of Indigenous governments and land owners. According to conference attendee Hayden King, a Professor at Ryerson University, speaking to CBC North News: “If the Gwich’in or the Tlicho say ‘We’re not really interested in fracking or a diamond mine, the company could theoretically take the community to the surface rights board, which could overrule the community.”
 

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Creating Haves and Have Nots
 
[dropcap_1]Y[/dropcap_1]ellowknife too, will be the location for the more than 170 jobs being transferred from Canada to the GNWT under devolution — these are the officials who now administer Crown lands and resources on behalf of Canada, employed by AANDC. There are no plans that have been made public that indicate any of those jobs will be located outside of Yellowknife. This is despite repeated calls from Indigenous governments at the devolution negotiating table now — and during devolution discussions over the past decade — to see some of those jobs and their important economic knock-on effects in the smaller communities. In addition, having some of those jobs located in smaller communities would establish to some extent a measure of legitimacy of their responsibilities: officials living near the lands they are administering and making decisions about.
 
So the picture is shaping up to be one where land claim-established resource management boards are being shut down, over the protests of the Indigenous governments. Power within their regions, and a sense of control that they have over lands and resources is being eroded by this move. Establishing a Surface Rights Board, poised to overturn community decisions on land access that might get in the way of projects, adds to a sense that regions have less of a say in decisions over resource and land use. The power is instead moving to Yellowknife, and the implications of that intensified by the fact that devolution-related jobs will also likely remain in Yellowknife. This centralization of power in a resource extraction based economy is a phenomena that Diana Gibson, former Executive Director of the Parkland Institute, warned about during the conference: resource extraction based economies often lean toward such centralization, in a context where the larger centers — in our case Yellowknife — see the most positive economic benefits from resource extraction spending and the smaller communities see the least economic benefits yet bear the greatest negative social and ecological costs.
 
And then there are political ramifications of all this. Indigenous governments are expected to work closely with the GNWT in a resource management arrangement required under the devolution agreement. The experience of land-claim based resource management conventions overturned unilaterally by Canada (a move that the GNWT has confirmed they will not change), and denying the psychological and economic benefits of land and resource administrators and decision makers resident in smaller NWT communities are factors that will likely undermine the potential of a cooperative resource management forum. This sense of alienation may well frustrate companies seeking a stable environment for resource projects. Communities feeling a loss of control over their lands, and forced to abide by decisions made in Ottawa or Yellowknife may be rather more cynical about benefits of potential projects, while at the same time gripped by growing poverty, housing and social crises.
 
At the conference, the question arose, what do we have to show for the huge resource extraction projects in the NWT? Some communities in the immediate vicinity of projects have Impact Benefit Agreements. The difference between the ability of Akaitcho and Tlicho regions to see benefits from resource extraction on their lands compared to the Sahtu for example, is quite stark.
 
But no matter what the local benefits, these do not seem to translate into large scale social, cultural or infrastructure benefits. In many communities, dirt roads, boarded up buildings, housing shortages, and schools badly in need of repair dominate the landscape. Not so in Yellowknife. And in Yellowknife, where average household incomes are over $100,000 per year, it’s the cheapest place to feed a family.  Compare that to places like Paulatuk or Deline, where jobs are fewer, wages are much lower, and food prices are far higher. So much so that in such places, the ability for people to live off the land is becoming increasingly important: it is how a growing number of people must feed their families. So whether a mine will shift the migration path of caribou or reduce habitat for moose — those environmental impacts are now vitally important both culturally and economically for people living in those places. And that importance underpins the broader economic trend common in resource based economies: the gap between the rich and poor is growing, and the benefits reaped by the centre come at the costs borne by smaller communities. And this is not sustainable.
 

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Solutions
 
[dropcap_1]W[/dropcap_1]hile the problems are significant they are not insurmountable. Here are some examples of solutions based thinking coming out of conference discussions:
 
Creating Stabilization and Permanent Funds — once these resources are gone, they are gone. In the short term, the economy is subject to boom and bust cycles; in the long term: nothing left to live on. A Stabilization Fund could be created out of resource revenues, and drawn upon to promote economic diversification, and smooth out the ups and downs of government income in the form of royalties and taxes. One sure way to ensure that future generations will have something left to them is to create a Permanent Fund that is there exclusively for the future. For models — look to places like Alaska, Norway, Alberta under the Lougheed government. Not putting away part of the value of resources now for the future, is simply irresponsible;
 
Sharing economic benefits and mitigating social and economic impacts: a Mackenzie Gas Impact Fund was created in recognition of the fact that the project would come with social and environmental costs — a hard won element of an overall deal, intended to protect communities outside of Yellowknife. While it, like the Mackenzie Gas Project proposal, was not perfect, it stands as an example of possible ways to deal with the implications of hard decisions relating to resource projects;
 
Decentralizing — sharing — decision making: This has huge potential — as much potential as there are creative ways to ensure it. From refusing federal attempts to “streamline” the regulatory system while leaving it incomplete and still plagued with operational problems, to engaging with NWT Constitutional Reform, there are a variety of ways decision making processes can create a positive functional and political relationship between Northern governments. Land claim and devolution agreements are creating a series of ad hoc decision making systems based on Aboriginal rights, while the Legislative Assembly has no mandate to represent Aboriginal rights on behalf of their holders. This situation promises to foster growing instability between decision and governing bodies in the territory (a topic for a forthcoming blog post!);
 
Economic diversification: Currently a highway to Inuvik from Wrigley is being contemplated, to assist with resource extraction needs, with various other spin-off benefits that could result. Meanwhile a golden opportunity for both economic diversification and social impact mitigation exists in the Mackenzie Valley Fibre Optic line project, and its potential economic impacts for Inuvik and the region. Both the highway and fibre optic projects are examples of ways the GNWT can start creating conditions where a boom and bust resource economy can be weathered — at least partly — by supporting infrastructure that opens up other economic options;
 
Figuring out what we want: When resource extraction companies put proposals in front of communities, there is often little time or opportunity for the community to think about what it wants in the short term and long term. At the conference, former NWT Premier Stephen Kakfwi talked about negotiating with oil companies over access for the Mackenzie Gas Project, seeking their contributions to infrastructure in the community of Fort Good Hope. Industry balked, backed by the government. But while resources are used up, royalty rates continue to reflect 19th century money values, and government debts increase, communities need to start thinking about what they want their communities to look like physically, socially and culturally. Do we want our community to have boarded up buildings and dirt roads? Do we want a lack of jobs? Or do we want decent jobs, roads, schools, and people supported being on the land? What do we want? The ultimate solution to issues facing communities starts with in part, visioning what we want to be. Once that is in place, the getting of it becomes the agenda for anyone wanting to work with a community. And that agenda will have positive knock on effects from the ground up, to the large scale policy decisions, such as the ones being taken now.
 
Photo credit: ElecticBlogs under a creative commons license.

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