aboriginal communities and non-renewable resource development

S t a t e o f t h e D e b a t e

ABORIGINALCOMMUNITIES ANDNON-RENEWABLERESOURCE DEVELOPMENT

ABORIGINALCOMMUNITIES ANDNON-RENEWABLERESOURCE DEVELOPMENT

National Round Tableon the Environment

and the Economy

Table ronde nationale sur l’environnement et l’économie

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The National Round Table on the Environment and the Economy (NRTEE) was createdto “play the role of catalyst in identifying, explaining and promoting, in all sectors ofCanadian society and in all regions of Canada, principles and practices of sustainable

development.” Specifically, the agency identifies issues that have both environmental and economicimplications, explores these implications, and attempts to identify actions that will balance economicprosperity with environmental preservation.

At the heart of the NRTEE’s work is a commitment to improve the quality of economic andenvironmental policy development by providing decision makers with the information they need tomake reasoned choices on a sustainable future for Canada. The agency seeks to carry out its man-date by:

• advising decision makers and opinion leaders on the best way to integrate environmental andeconomic considerations into decision making;

• actively seeking input from stakeholders with a vested interest in any particular issue andproviding a neutral meeting ground where they can work to resolve issues and overcome barriersto sustainable development;

• analysing environmental and economic facts to identify changes that will enhance sustainabilityin Canada; and

• using the products of research, analysis and national consultation to come to a conclusion onthe state of the debate on the environment and the economy.

The NRTEE’s state of the debate reports synthesize the results of stakeholder consultationson potential opportunities for sustainable development. They summarize the extent of consensusand reasons for disagreement, review the consequences of action or inaction, and recommendsteps specific stakeholders can take to promote sustainability.

M a n d a t eM a n d a t e

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ChairDr. Stuart SmithChairmanENSYN Technologies Inc.

Vice-ChairLise LachapellePresident & CEOForest Products Association of Canada

Vice-ChairElizabeth MayExecutive DirectorSierra Club of Canada

Paul G. AntleVice-PresidentThermal OperationsM-I Drilling Fluids

Jean BélangerOttawa, Ontario

Lise BrousseauLa Prairie, Québec

Patrick CarsonNobleton, Ontario

Douglas B. DeaconOwnerTrailside Café and Adventures

Terry DuguidChairmanManitoba Clean Environment Commission

Sam Hamad, P.Eng.Vice-President, IndustryRoche Ltd., Consulting Group

Michael HarcourtSenior AssociateSustainable Development Research InstituteUniversity of British Columbia

Raymond E. IvanyPresidentNova Scotia Community College

William H. JohnstoneMoose Jaw, Saskatchewan

Cindy Kenny-GildayYellowknife, Northwest Territories

Emery P. LeBlancPresidentAlcan Primary Metal GroupExecutive Vice-PresidentAlcan Aluminium Limited

Patricia McCunn-MillerManaging DirectorEnvironment and Regulatory AffairsPanCanadian Petroleum Limited

Ken OgilvieExecutive DirectorPollution Probe Foundation

Joseph O’NeillHanwell, New Brunswick

Florence RobartPointe-du-Chêne, New Brunswick

Angus RossScarborough, Ontario

Irene SoVice-President & Associate Portfolio ManagerRBC Dominion Securities

John WiebePresident & CEOGLOBE Foundation of Canadaand President & CEOAsia Pacific Foundation of Canada

Judy G. WilliamsPartnerMacKenzie Fujisawa Brewer Stevenson

Executive Director & CEODavid J. McGuinty

M e m b e r s h i pM e m b e r s h i p

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Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i

Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iii

Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xi

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiii

NRTEE Task Force on Aboriginal Communities and Non-renewable Resource Development . . .xiii

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xv

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

Non-renewable Resource Development in the NWT — The Magnitude of the Opportunity . . . . . .6Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Oil and Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Summary — A New Era for Non-renewable Resource Development . . . . . . . . . . . . . . . . . . . .10

Aboriginal Communities in the NWT — The Environmental, Cultural, Social and Political Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11

Aboriginal Communities and the Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11Cultural Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13Social Issues in Aboriginal Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14Political Evolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15Summary — Non-renewable Resource Development as Viewed by Aboriginal Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

The NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program — Origins, Development and Goal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

2. Toward Sustainable Aboriginal Communities — A Vision for 2010–2025 . . . . . . . . . .19

A Checklist of Sustainability Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21Status Report on Sustainability Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22The Role for Non-renewable Resource Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24Specific Elements of the NRTEE’s Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25Partnerships and Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26Strategic Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27Implementing the Vision — The Political Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

3. The Northwest Territories in Transition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

T a b l e o f C o n t e n t sT a b l e o f C o n t e n t s

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Land Claims and Self-Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33Devolution of Power to Northern Governments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34The Need For Immediate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

4. Cumulative Effects Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

The Importance of Cumulative Effects Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40Obstacles to Cumulative Effects Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41Requirements for Successful Cumulative Effects Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

Coordinate and Consolidate Existing Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41Respect Boards and Processes Established Through Land Claim Agreements and Implementing Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42Incorporate Traditional Aboriginal Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42Address Socio-Economic Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42Identify Objectives, Benchmarks and Thresholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Recent Proposals and Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43Implementing Cumulative Effects Management in the NWT — NRTEE Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44

Funding for the CEAM Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44Continuity for the West Kitikmeot/Slave Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46

5. The Investment Climate for Non-renewable Resource Development . . . . . . . . . . . . . .47

The Importance of a Favourable Investment Climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49Obstacles to Investment in Non-renewable Resource Development . . . . . . . . . . . . . . . . . . . . . . . .49Improving the Climate for Investment and Economic Development — NRTEE Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50

Additional Funding for Boards Under the Mackenzie Valley Resource Management Act . . . . . . . . .50Enhancing Northern Capacity in Geoscience and Geological Mapping . . . . . . . . . . . . . . . . . . .53A New Funding Formula for Infrastructure Development . . . . . . . . . . . . . . . . . . . . . . . . . . . .55A Northern Investment Tax Credit — Differing Views Among Key Players . . . . . . . . . . . . . .57

6. Capacity Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61

The Importance of Increased Aboriginal Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63Obstacles to Capacity Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64Requirements for Successful Capacity Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65

Provide Human Resource Inventories and Needs Assessments . . . . . . . . . . . . . . . . . . . . . . . . .65Define Roles and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65Ensure Timely Capacity-Building Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65Provide Community-based Education and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66Reinforce Aboriginal Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67Link Capacity Building with Industrial Benefits Requirements . . . . . . . . . . . . . . . . . . . . . . . . . .67Make Strategic Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

Recent Proposals and Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68Renewed Leadership for Capacity Building — NRTEE Recommendations . . . . . . . . . . . . . . . . . . .70

A Territorial Champion for Aboriginal Capacity Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70

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Promoting Regional and Community-based Capacity Building Through the Intergovernmental Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72An Awareness Program to Place Education and Training on a “Pedestal” in Aboriginal Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73Enhancing Adult Literacy, Education and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74An NRTEE-Sponsored Capacity-Building Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76

7. Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

The Importance of Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79Obstacles to Effective Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79Requirements for Successful Consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80

Consult Early and Consult Often . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80Clarify Expectation Between the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80Address Differences in Culture and Language . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81Provide Funding for Aboriginal Participation in Consultation . . . . . . . . . . . . . . . . . . . . . . . . . .81

Recent Proposals and Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82Funding Participation in Consultation Processes — NRTEE Recommendations . . . . . . . . . . . . . . .82

Continuation of the Interim Resource Management Assistance Program . . . . . . . . . . . . . . . . .82Funding Mechanism for Consultation on Major Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83

8. Sustainable Aboriginal Communities in the Long Term . . . . . . . . . . . . . . . . . . . . . . . . . .85

Distribution of Benefits, Economic Diversification and Resource Depletion . . . . . . . . . . . . . . . . . .87Economic Diversification and Long-Term Benefits from Non-renewable Resource Development — NRTEE Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88

Savings and Economic Diversification Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88Aboriginal Equity Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90

9. The “Free Entry System” — Divergence Among Key Players . . . . . . . . . . . . . . . . . . . .93

The Criticisms of Free Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96The Response . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98Aboriginal Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99Free Entry — The NRTEE’s Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99

10. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101

Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105

A. Program Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107B. Background Research Papers Prepared for the NRTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113C. Important Complementary Initiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115

Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119

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Photo Credits

Page Photo Credit

4 Government of the Northwest Territories(NWT)

5 Government of the NWT

7 Kevin O’Reilly, Research Director,Canadian Arctic Resources Committee(CARC)

8 Kevin O’Reilly, Research Director, CARC




16 Siobhan Arnott, Policy Advisor, NRTEE

23 Siobhan Arnott, Policy Advisor, NRTEE












57 Carolyn Cahill, Policy Advisor, NRTEE







72 Joe O’Neill, Member of the NRTEE









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The National Round Table on the Environment and the Economy (NRTEE) established theAboriginal Communities and Non-renewable Resource Development Program to examine thekey issues affecting the sustainability of Aboriginal communities involved with, or impacted by,

mineral, oil and gas exploration and development in Canada’s North. As Chair of the NRTEE, I ampleased to introduce this State of the Debate report, which details the program’s findings. The report isbased on consultations with over 300 key players in the field and on research that a) examined themagnitude of opportunity for mineral, oil and gas development in the Northwest Territories (NWT)and b) explored the regulatory, social, environmental, policy and fiscal challenges and opportunitieswithin the NWT.

The NRTEE adopted a case study approach for the program, focusing on the NWT because thisterritory illustrates particularly well a set of complex issues that affect Aboriginal communities acrossCanada. The case study approach serves to sharpen the focus of the NRTEE’s work, rather thanrestricting its applicability. The NRTEE expects that its findings and recommendations will resonate inall three northern territories and, indeed, elsewhere in Canada where opportunities exist to promote theeconomic, social, cultural and environmental sustainability of Aboriginal communities through the pru-dent development of non-renewable resources. A strong presence in Canada’s North will ensure thatCanada can directly address threats to its sovereignty by upholding its commitments to protect the frag-ile Arctic ecosystem, enhance northern security, promote sustainable economic development in thisregion and address the social problems facing Aboriginal people in the North.

The background material and recommendations presented here are designed to help raise awareness ofthe environmental, economic and social issues that key players must address over the next 10 to 25 years,if they are to help build economically viable Aboriginal communities while ensuring the ecologicalintegrity of the environment and the preservation of Aboriginal social structures and culture.

Stuart L. Smith, M.D.Chair, NRT E E

F o r e w o r dF o r e w o r d

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This report, Aboriginal Communities and Non-renewable Resource Development, is the sixth in the National Round Tableon the Environment and the Economy (NRTEE)’s State of the Debate series. Based on research and consultationsamong key players in the Northwest Territories, the report outlines five important policy areas in which these

players may take action to ensure that non-renewable resource development contributes to building sustainableAboriginal communities over the next 10 to 25 years. The report has been prepared as a reference tool for all concernedwith policy and decision making affecting non-renewable resource development and the sustainability of Aboriginalcommunities throughout Canada’s North.

P r e f a c eP r e f a c e

NRTEE Task Force on AboriginalCommunities andNon-renewable Resource DevelopmentTask Force Co-ChairCindy Kenny-GildayYellowknife, Northwest Territories

Task Force Co-ChairJoseph O’NeillHanwell, New Brunswick

Larry AknavagikChairpersonNunavut Environmental Impact Review Board

Ted BlondinLand Claims NegotiatorDogrib Treaty 11 Council

Allan BruceAdministratorOperating Engineer’s (Local 115) Joint Apprenticeship and Training Plan

Violet Camsell-BlondinFinancial ControllerDogrib Treaty 11 Council

Bill CarpenterNWT Regional DirectorArctic RegionWorld Wildlife FundEndangered Spaces Campaign

Randy Dahlman(previously) ManagerExploration & Development — Liard BasinChevron Canada Resources

Jim ExcellPresidentEKATI™ Diamond Mine

Charlie FurlongChiefAklavik Indian Band

Andrew Gamble(previously) Secretary to CabinetGovernment of Northwest Territories

Robbie KeithElora, Ontario

Pierre LeBlancDiavik Diamond Mines Inc.

L ynn LehrSenior LandmanWestern Canada Business UnitChevron Canada Resources

Patricia McCunn-MillerManaging DirectorEnvironment and Regulatory AffairsPanCanadian Petroleum Limited

David J. McGuintyExecutive Director & CEO, NRTEE

James R. MooreAssistant Deputy MinisterDIAND

Gabriela SparlingAssistant Deputy MinisterIntergovernmental AffairsGovernment of the Northwest Territories

Harley TrudeauActing/Assistant Deputy MinisterIntergovernmental AffairsExecutive Council OfficeYukon Government

Leslie Whitby (alternate)DirectorEnvironment and Renewable Resources DirectorateDIAND

Doug Willy(previously) Vice-PresidentCommunity and Government AffairsDiavik Diamond Mines Inc.

Scott WoronuikChief Operating OfficerBP Gas and Power Canada

StaffSiobhan ArnottPolicy Advisor

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E x e c u t i v e S u m m a r yE x e c u t i v e S u m m a r y

Executive Summary

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Aboriginal Communities and Non-renewable Resource Development Executive Summary

The economic benefits from non-renewable resourcedevelopment in the North will be spread throughoutCanada. The potential for direct employment, indirecteconomic opportunities and revenue flow to govern-ment is particularly significant for residents of thenorthern territories. While the magnitude of opportuni-ty is not enough to solve all the North’s economicproblems, there is no doubt that non-renewableresources can generate economic development in aregion that is chronically underdeveloped and heavilyreliant on the public sector.

Along with these opportunities, however, comepotentially high risks. These risks are especially frighten-ing for Aboriginal communities that continue to livewith the legacy of environmental damage and socialdislocation from past projects and resource booms. Alltoo often, the benefits flowed south, while the long-termcosts remained behind in the North.

Aboriginal communities have a profound social,cultural and spiritual attachment to the land. ManyAboriginal people also engage in renewable resourceharvesting and rely on the land for subsistence purposes.The potential threats to the environment from non-renewable resource development are therefore takenvery seriously in Aboriginal communities.

From a cultural perspective, Aboriginal communitiesfeel torn between two worlds as they confront the prospectof increased non-renewable resource development.Aboriginal people see their traditional culture, languagesand way of life as unique and valuable. Preserving thesetraditions is essential to individual and community well-being. At the same time, many Aboriginal people wantdevelopment and the opportunities that accompany it.They see the need to return to traditional roots as asource of strength, while reaching out to embrace thenew challenges that come with closer economic, socialand cultural contact with non-Aboriginal society.

Aboriginal people also face a daunting set of socialchallenges as they consider a future involving non-renewable resource development. Aboriginal communitieshave high levels of drug and alcohol abuse, gambling,spousal violence and child abuse. Levels of basic literacyand educational attainment are well below nationalaverages. Unemployment is high, particularly amongyoung people, and income levels are correspondingly low.These problems are major obstacles to full participationin the economic opportunities offered by non-renew-able resource development. They are also symptoms ofthe social and cultural disruption and the economicmarginalization that have resulted from contact with non-Aboriginal society.

Non-renewable resource development in northern Canada presents

Aboriginal communities and other northerners with tremendous opportunities. In the Northwest

Territories (NWT), for example, there is every indication that diamond mining and the production of

natural gas have opened a new era for resource development. Market conditions and the NWT’s proven

and potential resource endowment suggest that long-term production of both commodities is likely.

Diamonds in particular will generate significant direct and indirect employment for northerners.

The potential for gas development will take a further leap forward with the construction of a pipeline

to ship gas from the Mackenzie Delta to southern markets. Both gas and diamonds will produce

multi-billion dollar revenues from taxes and royalties over a 10- to 25-year time frame.

Aboriginal Communities and Non-renewable Resource Development

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Executive Summary

In 1998, the National Round Table on theEnvironment and the Economy (NRTEE) launched theAboriginal Communities and Non-renewable ResourceDevelopment Program. The purpose of the programwas to explore the relationship between Aboriginal com-munities and non-renewable resource development fromthe perspective of sustainability. The NRTEE’s mandateto identify, explain and promote the “principles andpractices of sustainable development” was clearly a goodfit with the aspirations of Aboriginal communities —Aboriginal communities in the North are there for thelong term. For these communities to remain true to theirorigins and their destiny, they must be sustainable. Thechallenge they now confront is to achieve sustainabilitywithin the social, economic and political realities ofnorthern Canada. Since non-renewable resource devel-opment plays a central role in shaping all of theserealities, the challenge of sustainability for Aboriginalcommunities is inseparable from the challenge of defininghow they will relate to resource development now and inthe future.

The NRTEE’s examination of non-renewableresource development and the sustainability of Aboriginalcommunities draws heavily on the experience ofAboriginal people, governments, resource developersand other key players in the NWT. The underlying issuesare not, however, restricted to one part of the country.The NWT was selected as the focus for a case studybecause it illustrates particularly well a set of complexissues that affect Aboriginal communities across Canada.The use of a case study approach serves to sharpen thefocus of the NRTEE’s work, not to restrict its applica-bility. The NRTEE expects that its findings andrecommendations will resonate in all three northern ter-ritories, as well as elsewhere in Canada whereopportunities exist to promote the economic, social, cul-tural and environmental sustainability of Aboriginalcommunities through the prudent development of non-renewable resources. More specifically, the NRTEEbelieves that the principal issues addressed in this reportare equally pressing in the Yukon and Nunavut. Formost if not all of the recommendations in this reportthat relate specifically to the NWT, compelling argu-ments can be made that parallel initiatives should beestablished and funded in the other two territories.Finally, it can be argued that Canada’s building of astrong presence in the North will allow it to directlyaddress threats to its sovereignty by upholding its com-

mitments to protect the fragile Arctic ecosystem, enhancenorthern security, promote sustainable economic develop-ment in this region and address the social problemsfacing Aboriginal people in the North.

The starting point for the NRTEE’s intensive exami-nation of these critically important issues is its vision ofsustainable Aboriginal communities. This vision identifieseconomic vitality, environmental integrity, social andcultural well-being, equity and control over naturalresources as the key indicators of sustainability. When thecurrent status of Aboriginal communities in northernCanada is evaluated using these indicators, the need forsignificant progress is evident.

The NRTEE also gave careful consideration to therole of non-renewable resources in furthering its visionof sustainable Aboriginal communities. Non-renewableresource development is clearly not a panacea for theNorth in general, or for Aboriginal communities in par-ticular. Initiatives to promote activity in thenon-renewable resource sectors should be situated withina broader strategy directed toward economic diversifica-tion and the careful management of the North’s precious— and potentially inexhaustible — endowment of renew-able resources. Nonetheless, the NRTEE’s decision tofocus on non-renewable resource development reflects ajudgment that, at this point in the history of northernCanada, the mining and oil and gas sectors can providekey economic support for the long-term sustainability ofAboriginal communities.

If non-renewable resource development is to lever asustainable future for Aboriginal communities, specificimprovements in all the NRTEE’s sustainability indicatorsare necessary. The NRTEE’s recommendations aredesigned to achieve this objective. More generally, theyreflect two themes that were raised repeatedly throughoutthe Aboriginal Communities and Non-renewableResource Development Program. First, the conditionsrequired for sustainable Aboriginal communities can onlybe put in place through the coordinated efforts of gov-ernments, Aboriginal people, industry and other keyplayers. Formal partnerships and informal cooperationare essential. Second, strategic investment is needed in anumber of key areas. The use of this term to describefunding initiatives is no accident. The economic potentialof non-renewable resource development and the focuson areas where tangible benefits can be achieved shouldensure that the expenditures recommended by theNRTEE generate net positive returns for northernersand all Canadians.

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The NRTEE’s vision of sustainable Aboriginalcommunities provides the basis for a series of specificrecommendations. The NRTEE is fully aware that theseproposals must be viewed against the backdrop ofmonumental changes in the political landscape ofCanada’s northern territories. Developments in twoareas in particular will define the context within whichthe NRTEE’s vision will be implemented. First, thenegotiation and implementation of land claim and self-government agreements are of fundamental importanceto Aboriginal communities throughout the North andwill have direct political and economic consequences forall northerners. Second, profound changes in governancewill follow from the devolution of powers by the federalgovernment to territorial and Aboriginal governments.The NRTEE strongly endorses the direction of currentinitiatives in both of these areas and urges all the partiesinvolved to get the job done as quickly as possible.These ongoing changes should not, however, stand inthe way of immediate action on specific policy issuesrelating to non-renewable resource development and thesustainability of Aboriginal communities. The NRTEErecommends immediate action in five key areas.

1. Cumulative Effects ManagementCumulative effects management was identified throughNRTEE consultations as essential for the sustainabilityof Aboriginal communities in northern Canada. Themost significant risks from non-renewable resourcedevelopment in the future are likely to arise from thecumulative environmental, social and cultural impactsof multiple exploration programs, mines, oil and gasfacilities and pipelines, along with the roads and otherinfrastructure required to support these projects.Ensuring sustainable Aboriginal communities requires acoordinated strategy to address these cumulative effects.

Cumulative effects management is not a simple task.By definition, it requires attention to the impacts of mul-tiple projects and activities that may occur within a largegeographic area over an extended period. These projectsand activities, in turn, are often subject to a variety ofplanning and regulatory processes. Insufficient data andscientific uncertainty regarding cause-and-effect relation-ships are common problems for cumulative effectsmanagement. Uncertainty regarding the objectives to beachieved is also common. Mechanisms may not exist to

identify and reconcile the sometimes competing intereststhat may be affected by management decisions.

Cumulative effects management in the NWT mustaddress all these general problems. In addition, theenvironmental sensitivity of northern regions and thedistinctive social and cultural characteristics of theNWT present particular challenges for cumulativeeffects management. The institutional context is alsorapidly evolving. New agencies and processes forresource management have been created and are onlybeginning to develop the institutional capacity requiredto fulfil their mandates. More generally, the settlementand implementation of land claim and self-governmentagreements and the prospect of increased devolution arebringing important changes to the overall structure ofgovernance. The NWT thus presents a complex andfluid environment for cumulative effects management.

Successful cumulative effects management in theNorth will require measures to coordinate and consoli-date a broad range of existing programs and processesrelating to baseline data collection, monitoring, land useplanning, resource management and project-specificregulation. At the same time, it must respect the institu-tional arrangements and decision-making processesestablished through land claim and self-governmentagreements and implementing legislation. TraditionalAboriginal knowledge must be incorporated intocumulative effects management, and socio-economiceffects must be addressed. Objectives, benchmarks andthresholds are required to guide research, monitoringand decision making.

A number of important initiatives relating tocumulative effects management are currently underwayin the NWT. The most significant of these initiatives isthe joint effort by the federal and territorial governments,Aboriginal organizations and governments, industry,environmental groups, and the Mackenzie ValleyEnvironmental Impact Review Board to develop theCumulative Effects Assessment and Management(CEAM) Framework. Work is underway to design thisframework; however, the target date for implementation(April 2001) will not be met due to insufficient funding.The NRTEE strongly endorses the CEAM Frameworkand makes two recommendations to support its successfulimplementation. These recommendations are as follows:


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Executive Summary

The Government of Canada should allocate atotal of $25.8 million, over six years, to theDepartment of Indian Affairs and Northern

Development and the Department of Environmentto complete the development and implementation ofan integrated policy framework for cumulativeeffects management in the NWT. This fundingincludes:

i. a total of $800,000 to enable the NWTCumulative Effects Assessment and ManagementWorking Group to submit a completed and com-prehensive CEAM Framework and action planby the end of the fiscal year 2001–2002 to theministers of Indian Affairs and NorthernDevelopment and Environment; and

ii. a total of $5 million annually for five years, start-ing in 2002–2003, to fund the implementation ofthe CEAM Framework — including theMackenzie Valley Cumulative ImpactMonitoring Program (at a cost of $3 millionannually), the action plans for the North Slaveand Deh Cho regions, and five-year audits(including state of the environment reporting) —and to meet the needs of the agencies that havekey roles in monitoring and managing cumula-tive effects. This funding level should bereassessed after five years.

The partners in the West Kitikmeot/SlaveStudy (WKSS) should ensure the continuationof research being undertaken by the WKSS in

support of cumulative effects assessment and monitor-ing by providing the necessary funding during thetransition period between the end of the WKSSmandate (April 2001) and the establishment of asuccessor organization or initiative that is able tocontinue this research. The successor organizationor initiative should be identified through consulta-tions among the WKSS partners, the CEAMFramework partners and the Nunavut GeneralMonitoring Program.

2. The Investment Climate for Non-renewable ResourceDevelopment

A major challenge for a strategy that relies on non-renewable resource development to promote sustainabilityis to ensure that economic activity in the resource sectorscontinues over the long term. It is true that strongcommodity prices and the North’s mineral potential havebeen powerful incentives for exploration and develop-ment in the diamond and oil and gas sectors in recentyears. The fact remains, however, that northern Canadamust compete in a global market for the investment cap-ital required for non-renewable resource development.The NRTEE believes that significant policy measurescan and should be taken to help ensure the continuedvitality of the North’s non-renewable resource sectors.The bottom-line consideration is that unless companies arewilling to invest in the North, the promise of long-termbenefits remains simply a promise.

The actions required to overcome current obstaclesto investment in non-renewable resource developmentare of two types. First, there is an urgent need for thefederal government, the territorial governments,Aboriginal organizations and governments, industry andother key players to work together to improve the effec-tiveness and efficiency of the regulatory regimesgoverning non-renewable resource development innorthern Canada. Second, there is a need to level theplaying field in a number of other areas where theNorth is at a disadvantage compared with other jurisdic-tions when competing for investment. To address theseissues, the NRTEE proposes four recommendations toimprove the climate for investment in the NWT andthroughout northern Canada. This report also summa-rizes competing points of view on a fifth option, theestablishment of a northern investment tax credit. TheNRTEE’s four recommendations are as follows:

The Government of Canada should allocate atleast $2.2 million per year (including $500,000per year for intervener funding) to enable the

Department of Indian Affairs and NorthernDevelopment to provide the Mackenzie ValleyEnvironmental Impact Review Board with a secure,multi-year funding commitment that will ensurethat the Board can effectively carry out its mandateand can provide intervener funding during environ-

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mental assessments and environmental impactreviews. This funding level should be reassessedafter five years.

The Mackenzie Valley Resource ManagementAct should be amended to include a specificrequirement for intervener funding.

The Government of Canada should commit $10 million per year, for 10 years, to theDepartment of Natural Resources (Geological

Survey of Canada) and the Department of IndianAffairs and Northern Development (for allocationto the C.S. Lord Northern Geoscience Centre) to cre-ate a modern, integrated and accessible geosciencedatabase for the NWT.

Recognizing that strategic investment in north-ern infrastructure benefits not only northerners,but also all Canadians, the Government of

Canada should not use a per capita allocation formu-la as the basis for infrastructure funding to addressthe urgent needs of the North. Specifically, theNRTEE recommends that the Government ofCanada set aside a block of funding for use as a min-imum threshold allocation and then divide theremaining infrastructure funding on some other basis,such as a per capita allocation formula.

3. Capacity BuildingCapacity building is the most important challenge facingAboriginal communities in the North. The NRTEE’sconsultations consistently identified a lack of Aboriginalcapacity as the principal impediment to maximizing ben-efits from non-renewable resource development.

Building Aboriginal capacity begins with improve-ments in basic literacy and educational achievement.Aboriginal people also need skills training andapprenticeship programs in order to benefit from manyof the opportunities offered by the non-renewableresource sectors. Administrative, management andentrepreneurial skills are essential to economic self-sufficiency, political self-determination and the ability tomanage both opportunities and risks associated withresource development. Life skills in areas such asmoney management, career planning and cross-culturalcommunication are also required as Aboriginal peoples

make the transition to the wage economy. Finally, thetransferability and diversification of skills is important toensuring long-term community capacity, particularly sinceindividual projects have finite lifespans, non-renewableresource sectors are subject to boom-and-bust cycles, andnot all people wish to work in the non-renewableresource sectors.

There are six principal obstacles to increasing thecapacity of Aboriginal communities in the North. First,coordination among programs and initiatives is inade-quate. Second, many existing capacity-building programsdo not place enough emphasis on the opportunitiesoffered by non-renewable resource development. Third,all too often the needs and circumstances of individualsliving in Aboriginal communities are not adequatelyaddressed. Fourth, funding levels for capacity buildingare insufficient to meet current and expected needs.Fifth, the value of formal education and training remainsunderappreciated in many Aboriginal communities andamong some Aboriginal leaders. Finally, a large propor-tion of the adult Aboriginal population lacks the basicliteracy and education to compete effectively in the wageeconomy, even for entry-level positions.

These obstacles suggest a number of general areasfor improvement in capacity building. Human resourceinventories and needs assessments should be developedon a regional basis. The roles and responsibilities ofgovernments, industry, educational institutions andAboriginal communities could be better defined. Fundingand access to training programs should be provided toAboriginal communities as far in advance as possible ofthe start of non-renewable resource development.More emphasis should be placed on community-basededucation and training. Capacity-building programsshould reinforce the values of Aboriginal culture, as wellas assisting with the transition to the wage economy.Linkages should also be made between government’scapacity-building initiatives and private sector programsestablished in accordance with impact-benefit or socio-economic agreements.

The NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program did notattempt to address the full range of issues raised bycapacity building or to develop a comprehensive capacity-building strategy. The NRTEE is, however, proposingfive key initiatives in this area to promote sustainableAboriginal communities. The NRTEE’s recommendationsare as follows:

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xxii

Executive Summary

The Intergovernmental Forum, in consultationwith industry and other interested parties,should appoint an independent champion for a

two-year term to evaluate the current state ofAboriginal capacity building in the NWT, encour-age greater cooperation and integration amongcapacity-building programs, ensure synergies (i.e., interms of existing funding sources), identify newsources of funding, and develop and promote newinitiatives.

The Intergovernmental Forum should promotea regional and community-based approach tocapacity building in the NWT by playing a

lead coordination and support role in the develop-ment and implementation of regional humanresource development plans.

The Government of Canada should con-tribute $5 million toward the creation of athree-year awareness program, headed by the

Premier of the NWT, to raise the profile of educa-tion and training in all Aboriginal communities inthe territory. The Premier should involve theIntergovernmental Forum, the independent champi-on, the National Aboriginal AchievementFoundation (including 24 outstanding Aboriginalachievers from across Canada), industry and busi-ness in this awareness project.

The Government of Canada should contribute$60 million for a state-of-the-art 10-year adulteducation program, which would begin fol-

lowing the successful launch of the awarenessprogram proposed in recommendation 9, to enhanceliteracy, high-school upgrading, and computer train-ing and basic skills among Aboriginal men andwomen in the NWT between the ages of 18 andapproximately 48. This program should be designedby the most successful Aboriginal adult educatorsin Canada and be administered by expertsemployed by the NWT Department of Education,Culture and Employment in accordance with thehighest Canadian standards for literacy and high-school achievement levels.

The NRTEE should convene a capacity-build-ing forum within three months of the release ofthis report to raise the profile of capacity-

building issues (including the importance of basicliteracy and adult education), promote partnershipsand provide specific guidance to theIntergovernmental Forum on the mandate of theindependent capacity-building champion, the meas-ures to be taken in support of regional humanresource development planning, and the identifica-tion of existing and new funding sources.

4. ConsultationThe need for effective consultation with Aboriginalcommunities is a common thread that runs through allefforts to maximize benefits and minimize risks from non-renewable resource development. Consultation opensthe door to meaningful participation by Aboriginal com-munities in decision making. For industry andgovernment, consultation with Aboriginal communitiesis a legal and practical requirement for non-renewableresource development in the North. Consultation is alsothe first step in building the trust and partnerships thatbenefit everyone involved in resource development.

There are several important obstacles to effectiveconsultation in the North. Consultation is often too latein the decision-making process for resource developmentas well as too rushed, putting undue pressure on Aboriginalcommunities and undermining the trust required formutually beneficial relationships. This problem is com-pounded by the fact that Aboriginal communities oftenlack the human and financial resources to participateeffectively in consultation. The roles and responsibilitiesof industry, government and Aboriginal organizations inconsultation processes are often ill defined, leading touncertainty, delay and frustration. Finally, Aboriginal cul-ture and language are sometimes given insufficientrespect in consultation processes.

The NRTEE has identified four principles toguide successful consultation. First, consultation shouldoccur early in the planning for non-renewable resourcedevelopment and should continue frequently thereafter.Second, parties should clarify their expectations andneeds at the outset. Third, consultation processes musttake account of differences in language and culture.Fourth, adequate funding for Aboriginal participation in

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consultation processes is essential. The NRTEE’s rec-ommendations, directed primarily to this fourthprinciple, are as follows:

The Department of Indian Affairs andNorthern Development should continue theInterim Resource Management Assistance

Program until all land claims are settled within theNWT. The Department should conduct a yearlyreview and adjustment of this program’s budget toensure that it can adequately fulfil its mandate ofsupporting Aboriginal participation in consulta-tions and other processes in non-settlement areas.

The Government of Canada should establisha $15-million funding mechanism over threeyears, to be administered by the Department

of Indian Affairs and Northern Development, tofacilitate the participation of Aboriginal organiza-tions and Aboriginal governments in consultationprocesses associated with large non-renewableresource development projects in the three northernterritories. This funding should be available priorto the intervener funding that is provided under theenvironmental assessment and regulatory processesthat apply to these projects.

5. Sustainable AboriginalCommunities in the Long Term

Aboriginal people view their relationship with the landas extending across seven generations. Ensuring thatAboriginal communities are truly sustainable thereforerequires a long-term perspective. While non-renewableresources currently offer tremendous potential to sup-port the development of sustainable Aboriginalcommunities, the NRTEE’s consultations have identifiedthree principal concerns for the longer term. These con-cerns focus on the distribution of benefits, economicdiversification and resource depletion.

The NRTEE’s indicators of sustainable Aboriginalcommunities include explicit reference to equity — thefair distribution of costs and benefits within and amongcommunities, between communities and developers, andacross different economic interests and generations.Non-renewable resource development is not consistentwith the NRTEE’s vision of sustainable Aboriginalcommunities if it results in the creation of “have” and“have not” communities or if certain groups within

Aboriginal communities are excluded from the benefitsof development. Equity requires measures to addressthe needs of those who do not share in the immediateeconomic spinoffs of development.

The need to diversify the economic base forAboriginal communities is a second concern. Regardlessof how promising the future looks today for diamondmining and the oil and gas sector, a one-track strategy forsustainability is risky over the long term. Economic andmarket conditions change, leading to boom-and-bustcycles in non-renewable resource sectors. The NRTEErecognizes that efforts should be made to diversify theeconomic basis for sustainability so that the well-being ofAboriginal communities is not entirely dependent on asingle project or sector. Non-renewable resource develop-ment can and should provide tangible support to thesediversification efforts.

A third concern is captured by the question: What isleft after non-renewable resources are gone? Even if astrong economy and favourable market conditions overmany decades smooth out the boom-and-bust rollercoaster, eventually key mineral deposits and oil and gasreserves will be depleted. In fact, one reason for increasedinterest in northern oil and gas is the decline in reservesin Alberta. The faster development occurs in the NWT,the sooner the inevitable decline in reserves will begin.

The NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program does not havea mandate to address broad issues of social equity or topropose an overall economic diversification strategy forthe NWT. The NRTEE’s consultations and research have,however, examined 1) savings and economic diversifica-tion funds and 2) Aboriginal ownership in companiesand projects as two mechanisms that have real potentialto ensure that mining and oil and gas activity today willproduce an equitable distribution of benefits and pro-mote broader economic diversification into the future. Onthis basis, the NRTEE recommends the following:

All parties to the Intergovernmental Forum

should devise a mechanism for allocating a

portion of government resource revenue to cre-

ate a savings and economic diversification fund, the

purpose of which would be to promote long-term sus-

tainability for Aboriginal communities and for the

NWT as a whole.

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Executive Summary

The Department of Indian Affairs andNorthern Development should monitor, on ayearly basis, the demand for capital to sup-

port Aboriginal equity participation in northernnon-renewable resource development, includinginfrastructure projects, and should adjust the avail-able funding levels accordingly to ensure thatAboriginal communities can secure equity stakes inmajor projects.

The NRTEE’s recommendations in the five areasreviewed above reflect a broad consensus among the keyplayers that participated in the Aboriginal Communitiesand Non-renewable Resource Development Program. Inone important area, however, the NRTEE was unable toachieve consensus. The “free entry” system for miningwas the subject of vigorous debate throughout theNRTEE’s consultations. This system, enshrined in theCanada Mining Regulations, establishes procedures wherebyprospectors can enter most lands containing Crown-owned minerals, acquire mineral rights by staking claims,gain exclusive rights to carry out further exploration anddevelopment within the area covered by claims, andeventually obtain mining leases if the proper procedureshave been complied with.

The free entry system is criticized by someAboriginal people and environmental groups on thegrounds that it establishes mining as the preferred landuse in the North, eliminates most regulatory discretionregarding exploration and the staking of claims, subordi-nates the interests and values of Aboriginal communitiesto those of the mining industry, and is inconsistent withAboriginal title and treaty rights. Defenders of free entry,notably in the mining industry, see it as a cornerstone ofmining in the North and argue that the critics do notadequately take account of the implications of howCanada’s mining regulations serve to monitor and con-trol the “rights” established through free entry.

Aboriginal participants in the NRTEE’s consulta-tions expressed a range of views on the free entry issue.The level of concern over free entry among Aboriginalpeople is linked, like so much else, to land claims.Aboriginal communities in areas of unsettled claims areparticularly vulnerable to exploration and developmentactivity on their traditional lands. Where claims are set-tled, however, Aboriginal surface and subsurfaceownership rights are secure and mechanisms are in

1515 place to give Aboriginal communities more of a role indecision making regarding mineral exploration anddevelopment. Not surprisingly, Aboriginal critics of freeentry tended to come from areas without settled claims.

The NRTEE recognizes that certain Aboriginalorganizations and other key players in the North arefundamentally opposed to the free entry system for miningthat is enshrined in the Canada Mining Regulations. At thesame time, the NRTEE has heard strong support forthis system from industry representatives. Faced withthis divergence of views on how to proceed, theNRTEE is unable to present a consensus recommenda-tion dealing with the free entry system for mining. Thereis clearly a need for all interested parties to continue towork toward a constructive resolution of the con-tentious and complex issues raised by free entry in theNorth.

Non-renewable resource development in the Northhas the potential to generate significant economic benefitsfor Aboriginal people, other northerners and all Canadians.These benefits will not, however, flow automatically toAboriginal communities. Non-renewable resources willcontribute to the sustainability of Aboriginal communitiesonly if those communities are able to take advantage ofthe opportunities that arise from resource development.

Non-renewable resource development also bringswith it significant risks. Unless development is properlymanaged, it can seriously undermine the environmental,social, cultural and spiritual foundations of Aboriginalcommunities. Minimizing these risks is therefore essentialif non-renewable resources development and sustainableAboriginal communities are to coexist in the NWT andthroughout northern Canada.

The recommendations set out in this report aredirected to maximizing the benefits and minimizing therisks of non-renewable resource development forAboriginal communities. They are based on solidresearch, and the NRTEE believes their implementationwill enable Aboriginal leaders, government, industry andall of the other key players to move further toward itsvision of sustainable Aboriginal communities. TheNRTEE urges everyone with an interest in non-renewableresource development in the North to work in partnershipin order to make that vision a reality.

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C h a p t e r O n eC h a p t e r O n e

11

Introduction

3

Aboriginal Communities and Non-renewable Resource Development Introduction

Many of the hopes and fears of Aboriginal communitiesin northern Canada are centred on the impacts of non-renewable resource development. The need for economicdevelopment is undeniable. Poverty casts a heavy burdenon Aboriginal people, their families and their communi-ties. There is no return to a self-sufficient existenceliving on the land. However, many Aboriginal peoplehave yet to find their place within the wage economy.The promise of jobs and business opportunities in min-ing or the oil and gas industry offers the prospect of abetter future — a way to escape the demoralization ofunemployment and economic marginalization.

At the same time, past experience with non-renewableresource development has been a bitter one for manyAboriginal people. All too often the benefits flowed south,leaving nothing behind but a hole in the ground and alegacy of environmental damage and social dislocation.Aboriginal people remain firmly committed to maintain-ing cultural values and traditions that are tied to seasonal

activities on the land. The caribou hunt, muskrat trappingand fishing for whitefish are much more than recreationfor Aboriginal people. These activities are part of thesocial and cultural fabric of their lives. Many Aboriginalpeople wonder whether they can maintain and strength-en this fabric, while meeting the demands ofemployment in an economy driven by non-renewableresource development. They also wonder what will beleft of their caribou, muskrats and whitefish when thenon-renewable resources are gone and the developershave moved on.

In 1998, the National Round Table on theEnvironment and the Economy (NRTEE) launched theAboriginal Communities and Non-renewable ResourceDevelopment Program. The purpose of this programwas to explore the relationship between Aboriginalcommunities and non-renewable resource developmentfrom the perspective of sustainability. The NRTEE’smandate to identify, explain and promote the “principles

A boriginal communities in northern Canada enter the 21st century with

a mixture of hope and anxiety. Aboriginal political organizations and leadership have never been

stronger, yet they are stretched to the breaking point as they confront a staggering array of social,

economic and political issues. Land claim and self-government agreements have been — or are being —

negotiated, yet the goal of meaningful participation in the decisions that affect their lives remains

elusive for many Aboriginal people. More Aboriginal youth are staying in school, yet overall educational

achievement in Aboriginal communities is far below the national average and illiteracy remains a

problem in all age groups. Many communities have begun the healing process needed to overcome

the social and cultural trauma of the past 100 years, yet alcoholism, drug abuse, violence and despair

remain part of everyday life for many Aboriginal people. Despite recognition of their rights by the

courts and an increased political profile, particularly in the North, Aboriginal people still are not

accorded the respect that they deserve in much of Canadian society.

4

and practices of sustainable development” was clearly agood fit with the aspirations of Aboriginal communities.Aboriginal communities in the North are there for thelong term. Grab-and-run resource development has noappeal for a people whose very identity is inextricablybound up with the land. For Aboriginal communities toremain true to their origins and their destiny, they mustbe sustainable. The challenge that they now confront isto achieve sustainability within the social, economic andpolitical realities of northern Canada. Since non-renew-able resource development plays a central role in shapingall these realities, the challenge of sustainability forAboriginal communities is inseparable from the chal-lenge of defining how they will relate to resourcedevelopment now and in the future.

This report is the culmination of the NRTEE’sintensive examination of these critically important issues.It presents a vision of sustainable Aboriginal communitiesbased in large measure on a strategy of maximizing thebenefits and minimizing the risks of non-renewableresource development. Following extensive consultationsand research, the NRTEE has developed a set of specificrecommendations to achieve sustainability forAboriginal communities in the context of a flourishingresource-based economy.

The NRTEE’s examination of non-renewableresource development and the sustainability ofAboriginal communities draws heavily on the experi-ence of Aboriginal people, governments, resourcedevelopers and other key players in the NorthwestTerritories (NWT). The underlying issues addressed hereare not, however, restricted to one part of the country.The NWT was selected as the focus of a case studybecause it illustrates particularly well a set of complex

issues that affect Aboriginal communities across Canada.The case study approach helps to sharpen the focus of theNRTEE’s work, not to restrict its applicability. TheNRTEE expects that the findings presented in thisreport will resonate in all three northern territories, aswell as elsewhere in Canada. Although the recommen-dations that follow are tailored in many cases to thespecific circumstances of the NWT, they are intended toprovide guidance wherever opportunities exist to pro-mote the economic, social, cultural and environmentalsustainability of Aboriginal communities through theprudent development of non-renewable resources.

The NRTEE recognizes that the implementation ofits recommendations would result in significant increasesin expenditure on a variety of initiatives within the NWT.In no way, however, should the focus of these recom-mendations be interpreted as a judgment on the relativemerits of funding initiatives in the NWT compared withthose in the Yukon and Nunavut. In fact, the NRTEETask Force on Aboriginal Communities and Non-renew-able Resource Development included representativesfrom each of these two other territories, and these indi-viduals affirmed in no uncertain terms that the issuesdiscussed in this report are equally pressing in theirrespective jurisdictions. The NRTEE believes that, in mostif not all the areas addressed in the recommendations inthis report, compelling arguments can be made that par-allel initiatives should be established and funded in the

Concerns relating to environmental integrity reflect

the past “legacy of liability” from resource develop-

ment and the commitment of Aboriginal people and

other northerners to ensure that these mistakes are

not repeated.

5


Yukon and Nunavut. Clearly, however, these initiativesand the precise funding allocations would have to be tai-lored to the specific needs of each territory. Since theAboriginal Communities and Non-renewable ResourceDevelopment Program did not entail a detailed examina-tion of the situations in the Yukon and Nunavut, it wasnot possible to include precise expenditure rec-ommendations for these territories in this report.

The report is organized as follows. The rest of thisintroductory section reviews the magnitude of opportunityoffered by non-renewable resource development in theNWT and the environmental, cultural, social and politicalcontext within which this development is occurring.

Section 2 outlines the NRTEE’s broad vision forachieving sustainable Aboriginal communities over thenext 10 to 25 years. In Section 3, the profound politicalchanges now underway in the NWT are summarized.Section 4 then presents two recommendations directedto ensuring that the cumulative effects of past, presentand future development in the NWT are properly man-aged. Attention to this critically important issue isessential if non-renewable resource development is to beconsistent with the NRTEE’s vision of sustainableAboriginal communities.

Section 5 turns to a series of specific recommenda-tions directed to improving the climate for investmentand economic development in the NWT. These recom-mendations reflect the NRTEE’s recognition that astrategy of using non-renewable resource developmentto lever long-term sustainability for Aboriginal commu-nities depends on the ability of the North to competefor private sector investment.

Section 6 presents the NRTEE’s recommendations oncapacity building. This issue was identified throughoutthe Aboriginal Communities and Non-renewableResource Development Program as being of primaryimportance. Section 7 addresses the importance ofconsultation with Aboriginal people and proposes twomeasures to support Aboriginal involvement in consul-tation processes. The focus in Section 8 then shifts totwo recommendations intended to promote economicdiversification and ensure that Aboriginal communitiesreceive long-term benefits from non-renewableresource development.

Section 9 reviews the debate over the “free entry”system for mining in the NWT. Finally, brief concludingcomments are presented in Section 10. The report alsocontains appendices that list participants in theAboriginal Communities and Non-renewable Resource

Development Program, identify the research reportscommissioned by the NRTEE to support this initiativeand describe important complementary initiatives.

The NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program has resultedin much more than a set of policy proposals. It is alsoan appeal for nation building at a time when externalenvironmental and political forces are threateningCanada’s sovereignty. According to the Canadian military,there is an ongoing threat to Canadian sovereignty in theNorth with global warming opening up Arctic waters,including the Northwest Passage by the year 2020; anincrease in Arctic tourism leading to foreign ships plyingthe Northwest Passage; a stronger presence of foreignresearch and military vessels and/or aircraft in theregion; a marked increase in interest in Canada’s naturalwealth (i.e., water, diamonds) with the decline in naturalresources elsewhere in the world; and the declining abilityof the Canadian military to effectively monitor and con-trol the Arctic region. In addition, the fragile Arcticecosystem will be under continuous and increased pres-sure as traffic increases in this area.

More Aboriginal youth are staying in

school, yet overall educational achieve-

ment in Aboriginal communities is far

below the national average and illiteracy

remains a problem in all age groups.

Introduction Aboriginal Communities and Non-renewable Resource Development

6

Canada was originally founded around a political,economic and social vision that — like the railway —connected people from sea to sea. The opportunity nowexists to build on that vision, extending it north to theArctic Ocean and offering to Aboriginal people theirrightful place within the new national dream. The NRTEEbelieves that sustainable Aboriginal communities can andmust exist in the Canada of the future. Only a strongpresence in the North will enable the Canadian govern-ment to protect Canada’s sovereignty by acting on itscommitments to protect the Arctic environment; toenhance the security of northerners, includingAboriginal people living in the Arctic; to promote sustain-able economic growth in that region; and to addresskey social issues within Arctic communities, as outlinedin The Northern Dimension of Canada’s Foreign Policy1 (seeAppendix C) and the recent Joint Statement by Canada andthe Russian Federation on Cooperation in the Arctic in theNorth.2

In the NWT and elsewhere in northern Canada,non-renewable resource development provides the mostpromising economic basis for promoting long-termsustainability. The broad vision and detailed proposalsset out below are intended to provide Aboriginal people,other northerners and all Canadians with the inspirationand the tools to work together in pursuit of a sustainablefuture for Aboriginal communities and for Canada as awhole.

Non-renewable Resource Developmentin the NWT — The Magnitude of theOpportunityRecent discoveries of world-class diamond depositsnorth of Yellowknife and large natural gas reserves inthe southern NWT have focused attention again onnon-renewable resources as the basis for economicdevelopment in the NWT. The current activity has allthe hallmarks of a major resource boom.

The discovery of diamonds at Point Lake in 1991triggered the largest staking rush ever seen in NorthAmerica. Ten years later, BHP’s Ekati mine is in produc-tion and Diavik’s project is under construction. Otherpotential mines are in the planning stages and are likelyto be developed over the coming years.

The most active gas exploration is currently occurringin the Fort Liard area, where 27 new wells were drilledbetween early 1997 and August 2000. A consortium ledby Chevron has made one of the largest gas discoveries

ever in Western Canada. Other companies are also activein the region and have identified major reserves. Pipelineconstruction will link this gas to southern markets inthe near future. There is also renewed interest in theproven gas reserves and the considerable explorationpotential of the Mackenzie Delta and Beaufort Sea.Significant activity in this area depends on constructionof a pipeline, a project that would itself produce ashort-term increase in economic activity within the NWT.

An assessment of the magnitude of opportunityoffered by non-renewable resources is critical to under-standing the potential benefits and risks of mining andoil and gas development for Aboriginal communities. Thisassessment requires a step back from the current activityto review, briefly, the history of non-renewable resourcedevelopment in the NWT and to consider its prospectsover the next 10 to 25 years. Research commissioned bythe NRTEE yields the following picture.3

MiningProduction of minerals on a commercial basis in theNWT began in the mid-1930s, with gold mining in theYellowknife area and radium-uranium mining near GreatBear Lake. Since that time, the NWT has produced avariety of minerals including gold, silver, copper, nickel,lead, zinc, tungsten, uranium and mineral aggregates.Gold mining has traditionally been the backbone of theNWT’s mining industry, with a cumulative production ofmore than 16 million ounces to date. Six billion kilogramsof zinc and two billion kilograms of lead have alsobeen produced.

Three factors will influence the magnitude ofopportunity from mining in the NWT over the next 10to 25 years. The first is continued production from cur-rently operating mines. The second is the development ofknown but as yet undeveloped deposits. Finally, newdeposits might be discovered and brought on streamwithin this time frame. The importance of all of thesefactors will, of course, be influenced by mineral prices onworld markets. The likelihood of significant new discov-eries being made and coming on stream also depends onthe exploration effort in coming years, the economiccriteria for development, the time lag for bringing dis-coveries to production and the regulatory environment.

At present, the NWT has two operating gold mines:the Giant Mine and the Con Mine. In its more than50 years of operation, the Giant Mine has producedover seven million ounces of gold and has created an

7


unfunded reclamation liability of upwards of $250 million,the result of 270,000 tonnes of arsenic trioxide storedon the site. The mine’s previous owner filed for bank-ruptcy in 1999, and the property was sold to the ownerof the Con Mine for a nominal sum later that year. TheCon Mine has produced nearly five million ounces ofgold and is nearing the end of its life. Production fromthe Con/Giant operations is expected to continue forabout another five years at current gold prices, althoughongoing exploration at both sites holds some promise ofextending the reserve estimates. Current projectionssuggest little prospect of significant new gold produc-tion in the NWT over the next 10 to 25 years without amajor increase in world gold prices.

There are currently no base metal mines operatingin the NWT. Prices for base metals have tended todecline in real terms (i.e., adjusted for inflation) over thepast 50 years, and deposits in the NWT have higherdevelopment costs than those elsewhere in the world.The expected scenario for base metals foresees nodevelopment in the NWT over the next 10 to 25 years.

The picture for diamonds is entirely different. TheEkati mine is expected to remain in production for atleast the next 25 years, while the Diavik mine, slated toopen in 2003 or 2004, has a projected 20-year lifespan.Diamond production on the Winspear property at SnapLake is also likely within the next four years, withother projects coming on stream over a 25-year timeframe and beyond.

There is also a very high potential for new diamonddiscoveries in the NWT. Considerable diamond explo-ration is ongoing, and the experience and data in thisarea are still limited. Given the time required to find,evaluate and develop diamond deposits, the impact ofnew discoveries will most likely be felt beyond the 25-year time frame. The discovery of major new deposits inquick succession, as occurred over the past decade,appears to be unlikely. This timing provides an opportu-nity to stage development, ensuring continued activityover a long period and allowing for ongoing monitoringof the environmental, social and cultural effects ofdiamond mining on the NWT. It also suggests thatopportunities within the next 10 to 25 years will flowlargely from known projects and deposits.

The magnitude of opportunity for mining in theNWT is thus heavily reliant on diamonds. This projectionis supported by an assessment of the current explorationeffort. Although the NWT has led Canada in explorationexpenditure over the past several years, 80% of theNWT total has been for diamond exploration. Theamount of exploration activity for gold and base metaldeposits has been relatively low and has mostly centredon existing mines and known non-producing deposits.

In terms of dollars and jobs, the opportunity fromdiamonds is significant by any standard. The expectedvalue of diamond production in the NWT will exceedUS$950 million per year by 2008, and this level of pro-duction should continue for at least another decade.New discoveries should ensure substantial production

Non-renewable resource development in the

NWT is both the bearer of great opportunities

and the potential harbinger of devastating

social influences that will forever change

traditional Aboriginal communities.


8

well beyond that. Diamond mining is expected to direct-ly employ more than 1,500 people over the next 10 to 25years. In discussions with BHP, the NRTEE discoveredthat the Ekati mine employs 592 people includingapproximately 396 northerners (67% of the workforce),of whom 225 people are Aboriginal (38% of the work-force). Diavik will employee 450 people once it isoperational in the first half of 2003. It aims to bring intwo-thirds of its workforce from the North (approxi-mately 300 people), 40% of whom will be northernAboriginal people.4

A number of permanent jobs are also likely in thesecondary cutting and polishing industries. Added to thisamount are the approximately 300 to 400 jobs fromgold mining expected over the next several years. Whenthe indirect employment spinoff is considered, the min-ing industry should create and maintain in the order of4,000 jobs over the next 25 years. Based on current esti-mates, approximately 80% of these jobs should go tonortherners, at least half of whom will be Aboriginalpeople.

This level of activity will also generate significant taxand royalty revenue. The Ekati mine, for example, isexpected to produce a total of approximately $2.5 billionin taxes and royalties. Estimated net fiscal benefits,including personal income taxes and other indirect andinduced fiscal impacts, are projected to exceed $4 billion.Projections for the Diavik mine include anexpected $2.1 billion in taxes androyalties. Total fiscal benefits fromdiamond mining will increase asnew projects come on stream,although eventually the closing ofolder mines will offset these gains.Diamond mining will thereforemake a significant fiscal contri-bution to government over thenext 10 to 25 years. Under cur-rent arrangements, the federalgovernment will be the main ben-eficiary, with very modest revenuegoing to the Government of theNorthwest Territories (GNWT).Negotiations on resource revenuesharing could, however, result in agreater proportion of benefitsflowing directly to the GNWTand to Aboriginal governments inthe future.

Oil and GasThe discovery of oil in 1920 at Norman Wells markedthe beginning of oil and gas activity in the NWT. Thisoil field was developed during and after the SecondWorld War, with more recent activity following con-struction of the Norman Wells Pipeline in the 1980s.Intensive exploration for natural gas in the NWT beganin the 1960s, with the Pointed Mountain gas field nearFort Liard coming into production in 1972. The searchfor oil and gas in the Mackenzie Delta and Beaufort Seaalso began in the 1960s. Onshore drilling was concen-trated between 1968 and 1976, with significant offshoreactivity occurring from the late 1970s until the mid-1980s.Onshore drilling increased again in the later 1980s.Activity had stopped by 1990, and only five wells havebeen drilled in the area since then. Proposals for majorpipeline development down the Mackenzie Valley wereshelved following the report of the Berger Commissionin 1977. Interest revived recently, but no formal propos-als have yet been submitted.

The magnitude of opportunity for oil and gas activitydepends on a number of factors including NorthAmerican and world market conditions, land availability forexploration and development, and transportation infra-structure. The completion of a gas pipeline linking theMackenzie Delta and other reserves with southern marketswould have a significant impact on the NWT’s oil and gas

sector. Given these variables, precise activitylevels and economic impacts aresomewhat difficult to predict over a10- to 25-year time frame.

The employment characteristicsof oil and gas activity are also signif-icant when estimating economicspinoffs in the NWT. There is typ-ically a surge of employment duringthe intensive exploration phase andthe construction of infrastructuresuch as pipelines. Once these stagesare completed, however, directemployment in production is rela-tively low. Furthermore, many ofthe jobs available in the oil and gassector require highly skilled individ-uals; and the planning horizon forexploration and development isoften relatively short, providing littletime for Aboriginal people and other

9

northerners to position themselves for employment.Long-term employment and business opportunities forAboriginal communities are consequently modest whenviewed against the projected value of production and theoverall spending and employment levels in oil and gasoperations.

The Fort Liard area will continue to be the focus ofactivity in the coming years, with more seismic exploration,drilling and pipeline construction expected. Expendituresin excess of $100 million annually are forecast for severalyears. An estimated 372 new jobs have been or are nowbeing created for local residents from exploration anddevelopment activities. A few more positions are possiblein the medium term from additional pipeline construction.This boost to local employment will likely continue forseveral years, but activity is likely to decline following theintensive development stage. The Fort Liard band is cur-rently negotiating equity participation in thisdevelopment as a means of obtaining a share in resourcerevenue and prolonging the flow of local benefits.

More modest drilling activity and expenditures areprojected for the Norman Wells area. Additional expen-ditures of almost $50 million per year over the next fewyears could generate approximately 93 jobs for northernersin the region, assuming that the local community is ableto capture these jobs. In the longer term, drilling isexpected to continue at about two wells per year, with anestimated $16 million in expenditure. A major oil discov-ery in the area or the completion of a natural gaspipeline could produce significantly more activity atNorman Wells over the next 10 to 25 years.

Activity in the Mackenzie Delta and Beaufort Seaarea is difficult to forecast. In the absence of a pipelineproject, only limited exploratory activity can be expected.Approval of a pipeline project would, however, producea significant acceleration of exploration and development.One indication of the potential impact of a pipelineproject on levels of activity is the significant private sector

commitment to exploration that has resulted from thesale of oil and gas rights in the Delta area over the pastseveral years. The increased interest in developing anorthern gas pipeline, perhaps within the next 10 years,has been a major factor behind the bidding for these oiland gas rights. In 1999, the oil and gas industry madework commitments of $183 million in return for federalexploration licences in the Mackenzie Delta. An additional$466 million in commitments were made in 2000 toobtain federal exploration licences in the Delta andadjacent Beaufort Sea. These commitments are forexpenditures over a five-year period. Also in 2000,industry provided the Inuvialuit with $75 million in returnfor the rights to explore two blocks of Inuvialuit-ownedland in the Delta.

If a pipeline project goes ahead, the direct and indi-rect expenditures associated with field developmentdrilling and related facilities are projected to be approxi-mately $1.1 billion over four years. These expenditureswould yield approximately 2,540 full-time jobs for thatperiod. The experience in the Fort Liard region suggeststhat a maximum of 20% of these positions would beavailable to northern residents. The surge in gas develop-ment activity associated with pipeline approval istherefore likely to produce approximately 510 local jobs.At the end of the four-year period, many of these jobswould be lost as exploration and development returnedto more modest levels.

In addition to well costs, expenditures on gatheringlines and a processing plant would be required. Anestimated total of $416 million in economic activity

One sentiment echoed by many Aboriginal

people captures their essential environmental

ethic when faced with development: “We want

our diamonds and natural gas — but we want

our caribou too.”


10

would generate 208 person-years of employment, yield-ing approximately 42 local jobs over the three-yearconstruction period for gathering and processing facilities.Following the construction phase, few local jobs could beexpected unless candidates with the required engineeringand technical backgrounds were available.

Construction of a pipeline down the MackenzieValley would itself produce economic impacts in the NWTand elsewhere. Based on a very approximate estimate ofa $2.4-billion pipeline project, $780 million in logisticsand direct construction expenditures could be expected.The remainder of the costs would include pipe, com-pressors, metering equipment and other materialimported from outside the NWT. Financial chargeswould also be part of the total cost. The $780 million inexpenditure on logistics and construction translates intoapproximately $1,014 million in total economic activityand approximately 500 jobs over the three-year construc-tion period. Employment for northerners would averageabout 100 jobs per year for three years, subject to annualand seasonal fluctuations as construction proceeded.Depending on the location of control facilities and thelevel of automation built into the system, local employ-ment could be very low once the pipeline went intooperation.

In addition to direct and indirect business opportu-nities for Aboriginal communities and other northerners,oil and gas production will also generate a significantstream of tax and royalty revenue to government. Giventhe uncertainties regarding the amount and price of oiland gas to be produced over the next 10 to 25 years, it isdifficult to estimate the total revenue flow to govern-ment. Long-term benefits to the NWT in general, andAboriginal communities in particular, will depend onhow this resource revenue is allocated.

Summary — A New Era for Non-renewable Resource DevelopmentThe forecasts reviewed above suggest five importantconclusions regarding the magnitude of opportunityfrom non-renewable resource development in the NWT.These conclusions provide reason for both optimismand caution.

First, diamond mining and the production of naturalgas appear to have opened a new era for resource devel-opment in the NWT. Market conditions and the NWT’sproven and potential resource endowment suggest thatlong-term production of both commodities is likely.

Diamonds in particular will generate significant directand indirect employment for northerners. The potentialfor gas development will take a further leap forward withthe construction of a pipeline to ship Mackenzie Deltagas to southern markets. Both gas and diamonds willproduce multi-billion dollar revenues from taxes and roy-alties over a 10- to 25-year time frame. The picture hasthus changed dramatically from the time when theNWT’s non-renewable resource economy was dominatedby gold mining, base metal production, and limited oiland gas production at Norman Wells and in the FortLiard region.

Second, the economic stimulus from northernresource development will be felt throughout Canada.Under the most optimistic scenarios for securing businessopportunities, employment and other benefits fornortherners, companies and individuals from southernCanada will continue to play a major role in supplyingthe capital, expertise, equipment and supplies needed toexplore for and produce the NWT’s non-renewableresources. As a result, significant economic spinoffs willinevitably flow south. Canada as a whole will benefit aswell from increased revenue through royalties and taxes.The magnitude of opportunity from non-renewableresource development in the NWT is therefore significantfrom a national perspective.

Third, predictions of resource development andassociated economic benefits should, like all forecasts, betreated with some caution. Many variables will influencenon-renewable resource development in the NWT over a10- to 25-year period. Many of these variables, notablyworld commodity prices, are beyond the control ofnortherners. The projections noted above are drawnfrom research commissioned by the NRTEE. Estimatesof expected benefits from non-renewable resourcedevelopment have been produced by others as well inrecent years.5 Past experience with boom-and-bust cyclesin resource sectors is a reminder of the potential forerror in all forecasts.

Fourth, the projections reviewed above suggest thatexpectations regarding direct benefits must be realistic.Non-renewable resource development is likely to produceseveral thousand long-term jobs for northerners over the10- to 25-year time frame. Many of these jobs will berelated to diamond mining, although oil and gas opera-tions will generate relatively modest short-term surges inemployment. It is striking, for example, that a $2.4-billionpipeline project in the Mackenzie Valley may yield only

11


100 local jobs over the three-year construction periodand virtually no local employment thereafter. Non-renewable resource development thus represents asignificant economic opportunity for northerners, but nota huge bonanza that will rapidly provide employment forevery northerner. Similarly, even multi-billion dollar rev-enues over a 25-year time frame may not be sufficient tofund all government transfers to and expenditures in theNWT and generate an enormous surplus. Some expecta-tions may have to be adjusted accordingly.

Finally, the economic benefits of non-renewableresource development to Aboriginal communities willdepend on the ability of individuals and businesses inthose communities to position themselves for the oppor-tunities that will become available. The report of the JointAboriginal-Industry Resource Development Workshopconcluded that the non-renewable resource sectors are“the key vehicle of job creation for northerners.”6 As acautionary note, however, it added that “past attemptsto provide employment for northerners in the mining/oil/gas industry have had limited success, particularlyfor Aboriginal people.”7 Ensuring that Aboriginal com-munities are able to benefit from resource developmentis a major focus of the NRTEE’s recommendationspresented below.

The economic benefits from non-renewableresource development in the NWT will be spreadthroughout Canada. The potential for direct employ-ment, indirect economic opportunities and revenue flowto government is particularly significant for residents ofthe NWT. The magnitude of opportunity is not suffi-ciently large, however, that mining and the oil and gassectors can solve all the NWT’s economic problems.Employment benefits and revenue flows must be viewedagainst the needs of northerners in general andAboriginal people in particular. These needs are consid-erable. Furthermore, non-renewable resourcedevelopment also brings with it costs and risks that mustbe factored into any cost-benefit analysis.

Aboriginal Communities in the NWT —The Environmental, Cultural, Socialand Political ContextFrom the perspective of Aboriginal communities,non-renewable resource development in the NWTpresents a study in contrasts. It is both the bearer ofgreat opportunities and the potential harbinger ofdevastating social influences that will forever change

traditional Aboriginal communities. The opportunitiesoffered by non-renewable resource development willonly contribute to the sustainability of Aboriginal com-munities in the long run if this development is managedto take account of the unique environmental, cultural,social and political context in the NWT.

Aboriginal Communities and the LandThe land is at the centre of Aboriginal culture, traditionand identity. Aboriginal people have a strong sense ofplace, based on the daily and seasonal patterns of land-based activities that have been passed down fromgeneration to generation. The land sustained theirancestors over thousands of years and continues to playan important practical, as well as spiritual, role in thelives of Aboriginal people today. Many Aboriginalhouseholds spend part of each year on the land andcontinue to rely on country food as a significantcomponent of their diets, obtaining most or all oftheir meat and fish from harvesting activities. Theland is also a legacy for future generations.If properly cared for, the land is aninexhaustible source of food,water and spiritual renewal forAboriginal people.

Traditional cultural values and the

deep connection to the land provide a

source of strength and continuity that

can assist Aboriginal communities in

adapting to a new way of life.


12

This profound attachment to the land leadsAboriginal people to be particularly concerned withprotecting the physical landscape and biological diversityof the NWT. Caribou have a special spiritual and practicalsignificance. All living creatures, however, are valued fortheir place within the complex web of life. This goal ofprotecting the North’s unique and fragile environment is,of course, shared with all other Canadians who appre-ciate the splendour and biological richness of ournorthern land.

The NWT is a land of unparalleled natural beauty.Divided into seven ecoregions that extend from the60th parallel to the Arctic Ocean, it has remarkablegeographic and climatic diversity. Dense boreal forestin the south gives way in the northern NWT to the bar-ren lands of the Arctic ecoregion, where vegetation islimited to tussocks, lichen and other low-growing plants.The majestic Mackenzie Mountains that form the territo-ry’s western boundary are the northern extension of thecontinental divide. Great Bear and Great Slave lakes, thefourth- and sixth-largest lakes in North America, have acombined area of 60,000 square kilometres. TheMackenzie River, flowing north for over 4,000 kilometres,is Canada’s longest river.

This vast area is home to a tremendous variety andabundance of wildlife. Peary caribou, muskoxen, polarbears, arctic hares and beluga whales are among themammals that inhabit the far North. Vast herds of caribou,including the 350,000-strong Bathurst caribou herd, tra-verse the barren lands on their annual migration. The

Mackenzie Mountains are home to woodland caribou,Dahl’s sheep, grizzly and black bears, lynx, martens,golden eagles and a variety of small birds and mammals.At the mouth of the Mackenzie River, one of Canada’slargest deltas provides important habitat for muskratsand nesting waterfowl. Extending south from there, theentire Mackenzie Valley is a major migration corridor. Inthe southern boreal forest or taiga, moose, wolves,woodland caribou, lynx, red foxes and several types ofweasel are found. Lakes and rivers in the NWT containnumerous fish species, including trout reputed to reach60 pounds in weight and whitefish that continue to havean important place in the diets of many Aboriginal people.

Despite some striking but geographically limitedexamples of environmental degradation, most of theNWT remains in nearly pristine condition. Externalthreats to the northern environment are, however, amajor concern for many northerners. Global warminghas the potential to alter northern ecosystems dramati-cally as a result of changing weather patterns, risingocean levels, melting permafrost and offshore ice packs,forest fires and a host of other changes. Human activity,notably reliance on winter roads for vital transportationneeds, is also at risk of significant disruption due toclimate change. The long-range transport of persistentorganic pollutants has already resulted in high concentra-tions of toxic chemicals in some species of Arcticanimals and in the people who eat them.

The land is at the centre of Aboriginal

culture, tradition and identity. If properly

cared for, the land is an inexhaustible source

of food, water and spiritual renewal for

Aboriginal people.

13


The direct effects of non-renewable resource devel-opment are also a major concern, as illustrated by theintense interest in the environmental reviews of theBHP (Ekati) and Diavik diamond mines. Both mines arelocated within the range of the Bathurst caribou herd.Caribou are recognized as “the most important subsis-tence and cultural resource for indigenous arctic dwellingpeoples.” According to researchers Wolfe, Griffith andWolfe,8 studies conducted on the response of caribou todevelopment may include individuals or groups of cari-bou 1) moving away from sources of disturbance, 2)increasing activity and energy expenditures as a result ofdisturbance, 3) delaying crossing or failing to cross linearstructures (e.g., pipelines, roads, cleared seismic lines), 4)shifting their distributions away from areas of extensiveand intensive development, and 5) being killed by colli-sions with vehicles or by hunting along roads. Duringthe calving season, cows and calves are the most easilydisturbed group. Bulls in general and all caribou duringinsect harassment are the least likely to avoid develop-ment areas.

While the physical footprint of each of the diamond-mining projects is relatively small, Aboriginal people areconcerned about cumulative effects on caribou andwater. They note that the impacts of these projects mustbe assessed, along with those from ongoing mineralexploration and the potential development of severaladditional mines and associated infrastructures over thecoming years. Natural gas development in the Fort Liardregion raises other cumulative effects issues, as would theconstruction of a natural gas pipeline and transportationcorridor in the Mackenzie Valley. Further advances inunderstanding the implication of human disturbance tocaribou, for example, will require cumulative effectsassessment at annual, population and regional scales.The need for cumulative effects assessment work inthe NWT is addressed in greater detail in Chapter 4 ofthis report.

There is no clear evidence to suggest that proposednon-renewable resource development in the NWT willnecessarily have unacceptable environmental costs. Infact, many Aboriginal people strongly support thisdevelopment and believe that the land can be protectedat the same time through proper regulation and moni-toring. They are not, however, willing to barter theirland and the future of their children for a quick infu-sion of cash from the hasty depletion of non-renewableresources. One sentiment echoed by many Aboriginal

people captures their essential environmental ethic whenfaced with development: “We want our diamonds andnatural gas — but we want our caribou too.”

Cultural PerspectivesAboriginal communities feel torn between two worlds asthey confront the prospect of increased non-renewableresource development. Aboriginal people see theirtraditional culture, languages and way of life as uniqueand valuable. Preserving their traditions is essential toindividual and community well-being. At the same time,many Aboriginal people want development and theopportunities that accompany it. They see the need toreturn to traditional roots as a source of strength, whilereaching out to embrace the new challenges that comewith closer economic, social and cultural contact withnon-Aboriginal society.

Aboriginal culture is inseparable from the land andfrom a traditional way of life that is based on hunting,trapping, fishing and gathering the bounty of the Earth.Elders within Aboriginal communities are the main hold-ers of cultural values and are responsible fortransmitting these values to younger generations. Manyelders worry about the health and well-being of theiryouth and their prospects for sustaining themselves inthe future. Many elders also fear a growing loss of theconnection between young people and the land. Asnoted in the report of the GNWT’s Economic StrategyPanel: “If youth don’t have knowledge of the land, theymay lose their culture and not be willing or able toassume responsibility for the land as adults.”9 For someelders, increased resource development and the influenceof non-Aboriginal values seem likely to overwhelmAboriginal culture.

Aboriginal youth, in contrast, talk more confidentlyof a future that involves non-renewable resource devel-opment. Many already have relatives or friends workingin mining, oil and gas development or in related secondaryindustries. They are attracted by the fact that 21-year-oldscan make $60,000 to $70,000 per year. Even if they donot want to work in non-renewable resource industriesdirectly, they see that the benefits generated by develop-ment may open up new opportunities in the trades andin professions such as teaching and medicine. However,young people are also aware of the great hurdles thatthey must overcome to reach those goals. They talk ofthe drinking, drug abuse and related violence that areprevalent in their communities. In addition, they note


14

such major difficulties as poor education, health problemsand the loss of language and culture.

Aboriginal communities approach non-renewableresource development and the other changes occurringaround them from a position of cultural vulnerability.Many people simply do not understand what is happeningto their traditional way of life during this period of rapidand jolting change. At the same time, traditional culturalvalues and the deep connection to the land provide asource of strength and continuity that can assistAboriginal communities in adapting to a new way of life.The challenge is to sustain the cultural fabric ofAboriginal society while developing the capacity tomanage and benefit from resource development and thetransition to a wage-based economy.

Social Issues in Aboriginal CommunitiesAboriginal communities occupy an important placewithin the NWT. These communities confront manycomplex social issues as they consider an economicfuture based in part on non-renewable resource devel-opment. Research commissioned by the NRTEE givesthe following perspective on these social dimensions.10

The NWT has a large area — 1.2 million squarekilometres — and a small population. The 1996 censusreports 39,672 residents, 48% of whom are persons ofAboriginal ancestry. The majority of these Aboriginalpeople are between 25 and 44 years of age.

Yellowknife, the capital of the NWT, is home to 44%of the territory’s population and 18% of its Aboriginalresidents. About 24% of the population lives in threecommunities with more than 2,000 people (Hay River,Inuvik and Fort Smith). Half of the people in thesecommunities are of Aboriginal ancestry, and these peoplemake up 25% of the NWT’s Aboriginal population.One-third of NWT residents and 57% of the Aboriginalpopulation live in the remaining 29 communities. Withthe exception of Norman Wells, Fort Simpson andEnterprise, these communities have populations that are90% or more Aboriginal. Many of these communities aresmall and remote, with populations of less than 500 people.

The majority of Aboriginal people in the NWT thuslive in small communities scattered across a vast land. Inall communities except Yellowknife, Enterprise andNorman Wells, Aboriginal people make up half or moreof the population. These demographic data, however,reveal only part of the social context within whichnon-renewable resource development is occurring.

The movement of Aboriginal people in the NWTfrom temporary and seasonal residences on the landto year-round permanent communities is relativelyrecent. This process began in earnest three to fourdecades ago, and virtually all Aboriginal people now livein permanent communities. The transition from a tradi-tional and largely self-sufficient way of life based onfamily units living on the land has, not surprisingly, beena traumatic experience for many Aboriginal people andcommunities. The social dislocation arising from thistransition is accentuated by the outside influences associ-ated with the large-scale industrial development ofnon-renewable resources.

For almost three-quarters of the 20th century,Aboriginal communities in the NWT had no control overnon-renewable resource development. This development,coupled with game shortages and the policies of thefederal government:

• severed the interdependent economic relationship thathad existed between Aboriginal and non-Aboriginalpeople in renewable resource harvesting activities;

• weakened the ability of Aboriginal communities toensure the economic and social security of theirmembers;

• produced an influx of non-Aboriginal people intothe NWT and created communities with interests,laws and institutions that differed from those ofAboriginal people;

• widened the gap between the rich and the poor;

• helped to undermine the sense of place and securityamong Aboriginal communities; and

• provided a rationale for efforts to assimilate Aboriginalpeople in light of the poverty, marginalization, alien-ation and despair within Aboriginal communities.

The result was what one historian has described as“the development of two northern solitudes: twoindependent economies, two very different societies,and a significant power imbalance.”11

The effects of this profound social and culturaldislocation are clearly evident from a number of indica-tors of individual and collective well-being in Aboriginalcommunities. Aboriginal people are worse off in manyways than non-Aboriginal people in the NWT and in therest of Canada. On a per capita basis, Aboriginal com-munities have higher numbers of:

15


• accidental deaths, particularly due to injury andpoisoning;

• persons with diseases of the respiratory, digestiveand nervous systems;

• persons with disabilities, including Fetal AlcoholSyndrome and Fetal Alcohol Effects;

• persons with alcohol, drug or gambling addictions;• children coming into care — many due to develop-

mental delays, poor parenting and neglect or abuse;• property and violent crimes, including spousal

assault and child sexual abuse; and• homes in need of major repair and persons with

unmet housing needs.

This daunting array of social problems presents a majorchallenge as Aboriginal communities seek to positionthemselves to take advantage of opportunities presentedby non-renewable resource development.

These problems are also a constant reminder ofthe legacy of social and cultural dislocation withinAboriginal communities that is linked, in part, to non-renewable resource development. A recent studyconducted by Pricewaterhouse Coopers in the Fort Liardarea, for instance, has shown that higher rates of alcoholconsumption and alcohol-related crime have been asso-ciated with the recent increase of economic activity.12

Non-renewable resource development now and in thefuture must be managed in a way that corrects, ratherthan perpetuates, this legacy.

Other socio-economic indicators reflect the effectsof social upheaval and physical isolation as Aboriginalcommunities struggle to adjust to a world that ischanging rapidly around them. While educationalachievement is improving, less than one-quarter ofAboriginal youth graduate from high school comparedwith 81% of non-Aboriginal youth in the NWT. Almostone-third of Aboriginal people in the territory have notcompleted Grade 9 and are considered illiterate. Amongnon-Aboriginal residents, the rate is about 3%.

Unemployment rates among Aboriginal people tella story of some progress, but continued difficulty inadapting to the wage economy. Between 1989 and 1999,the participation of Aboriginal people in the wage econo-my increased from 51% to 61% in small communities.This rate decreased in Yellowknife from 78% to 72%.Unemployment rates among Aboriginal people tend todecline as higher educational levels are achieved.13 AmongAboriginal people with less than a Grade 9 education,the unemployment rate is 44%. Unemployment rates for

Aboriginal people with high-school diplomas and univer-sity educations are 14% and 19%, respectively. Evenamong the best-educated Aboriginal people, however,the unemployment rate is about twice the NWT aver-age. Unemployment rates for Aboriginal youth areparticularly high.

High Aboriginal unemployment reflects all the factorsnoted above. Low levels of basic education and skillsamong Aboriginal people limit job options for many.Economic opportunities in small communities are few.Moving to a larger urban centre, however, is disruptiveto social and family life. Some Aboriginal people areunable to make the transition successfully. Others cannothold jobs because of the poor state of their physical andmental health. Drug and alcohol abuse frequently causeor contribute to these problems.

Not surprisingly, average personal incomes amongAboriginal people tend to be low and reliance on incomesupport high. Some evidence suggests that eligibilityrequirements for social assistance are actually a disincen-tive for employment.14 Subsistence hunting and fishingare relied on by many Aboriginal people to supplementincome. These activities, of course, have importantcultural significance in addition to their economic value.

Despite complex and disturbing social problems, theprospects for Aboriginal people and their communities inthe NWT are far from bleak. There are many individualsuccess stories. Educational attainment is increasing, andopportunities for scholarship support and employment,provided by the non-renewable resource sectors, arecreating incentives for young people to stay in school.The challenges, however, remain significant and mayonly be overcome by commitments, as recently made bythe Prime Minister of Canada, to actively promote socialjustice among Aboriginal people.15

Political EvolutionAs Aboriginal communities confront the environmental,cultural and social issues related to non-renewableresource development, they can take considerable com-fort from the remarkable political evolution that hasoccurred over the past several decades. Three key eventsin the 1970s signalled the beginning of a new politicalera for Aboriginal people in the NWT:

• the formation of Aboriginal political institutions,such as the Dene Nation;

• the legal recognition of the Dene’s interest in450,000 square miles of traditional lands in theMackenzie Valley; and

16

• the Berger Inquiry, established to investigate thepossible social, economic and environmentalimpacts of a natural gas pipeline in the MackenzieValley.

The Berger Inquiry is particularly significant forpresent purposes because it was the first public discus-sion of non-renewable resource development in theNWT. Mr. Justice Thomas Berger spent three years visit-ing every community in the NWT. Everywhere themessage was the same: no pipeline until land claims aresettled. Aboriginal people in the 1970s clearly stated thatthey wanted guarantees of land ownership, protectionof their way of life and protection of the land, animalsand environment before major development occurred.

Mr. Justice Berger issued his report in 1977. Hisprincipal recommendation was that the proposedMackenzie Valley pipeline and other major developmentshould be postponed for 10 years. Mr. Justice Berger rec-ognized that the inquiry was not just about pipelinedevelopment, but also about the future of the Northand its people. While he viewed the proposed pipeline asenvironmentally feasible, he predicted that “a MackenzieValley pipeline...if it were built now...would bring onlylimited economic benefits, its social impact would bedevastating, and it would frustrate the goals of Nativeclaims.”16

The settlement of claims, Mr. Justice Berger concluded,is required “to establish a social contract based on a clearunderstanding that they [Aboriginal people] are a distinctpeoples in history” and to provide them with a choiceabout the future.17 Allowing pipeline development in the1970s would have taken away that choice.

The long-term impact of the Berger Inquiry istwofold. First, Mr. Justice Berger presented clearly andforcefully the argument that development should occurat a pace that the region and its people can sustain. Inparticular, he stated that Aboriginal people should be ina position to:

• determine the full environmental impacts ofdevelopment;

• develop new programs and institutions;• ensure economic diversification, including support

for traditional Aboriginal economic activities; and• ensure the settlement of claims.

He thus linked the acceptability of non-renewableresource development directly to Aboriginal capacityand political evolution.

Second, the Berger Inquiry signalled and encouraged apolitical rebirth among Aboriginal people. In the wordsof one commentator:

The most significant impact of the Berger Inquirymay not result from the recommendations passed onto the federal government concerning the proposedpipeline. The impact of the Inquiry itself, havinguncovered and unleashed personal feelings, majorsocial problems and the aspiration of an awakeningpeople, might indeed be greater than that of anynumber of pipelines.18

Economic development based in part on non-

renewable resources should place Aboriginal

communities in a better position to address the

social, cultural and environmental issues that

confront them.

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Almost 25 years later, this “awakening” has resulted ina set of land claim agreements in the NWT and thedevelopment of a new generation of Aboriginal institu-tions and leaders.

The conditions for development set out by Mr. JusticeBerger are now well on their way to being met. Threeland claims in the NWT are now settled: the WesternArctic (Inuvialuit) Final Agreement (1984); the Gwich’inComprehensive Land Claim Agreement (1992); and theSahtu Dene and Metis Comprehensive Land ClaimAgreement (1993). The Dogrib First Nation signed anagreement-in-principle with the federal and territorialgovernments on January 7, 2000. This agreement breaksnew ground by combining a land claim settlement withan agreement on self-government. Other groups withinthe NWT are at various stages of negotiating their claims.These groups include the Deh Cho First Nations,Akaitcho Territory (Treaty 8) and the South Slave Metis.The North Slave Metis Alliance, although not recognizedby the federal government, is also interested in settlingland claims. Several Aboriginal groups are pursuingself-government arrangements.

Added to this progress on land claims and self-government is the rapid evolution of political institutionsand leadership within Aboriginal communities. Whilehuman and financial resources are still stretched far toothin, many Aboriginal communities have considerableinternal capacity and access to outside expertise. Aboriginalpeople now occupy important positions in governmentand industry as well as in their own political organizations.Aboriginal development corporations have been estab-lished to promote economic diversification. Aboriginalpeople and their advisors are able to subject resourceprojects to intensive environmental scrutiny, as illustratedby their role in the project review and regulatory processesfor the BHP and Diavik diamond mines. And the Premierof the NWT is an experienced Aboriginal leader.

This political evolution is perhaps the mostimportant reason why many Aboriginal people nowsupport non-renewable resource development in theNWT. Having established the basis for political self-determination, they are now in a position to movetoward the economic self-sufficiency that is required tomake that self-determination truly effective.

Summary — Non-renewable ResourceDevelopment as Viewed by AboriginalCommunitiesThe Aboriginal perspectives on non-renewable resourcedevelopment in the NWT reflect the environmental,cultural, social and political contexts described above.Environmental concerns are a product of close links tothe land and to traditional ways of life. Aboriginalculture depends on preserving the land and managingthe social and economic influences that will come withdevelopment. Economic development holds the key toaddressing some of the social problems that plagueAboriginal communities, but it also carries the risk offurther social dislocation. Finally, Aboriginal people areconvinced that their increased political self-determinationshould be used to ensure that greater self-sufficiency andeconomic diversification are promoted through thedevelopment of non-renewable resources.

Aboriginal communities are now more confident thatnon-renewable resource development can have benefitsand that the risks can be managed. However, neitherbenefits nor manageable risks can be counted on. Thechallenge is to identify and implement the measures thatare required to allow development to occur in a way thatmaximizes benefits while minimizing risks. In establishingthe Aboriginal Communities and Non-renewableResource Development Program, the NRTEE signalledits intention to address this challenge directly.

The NRTEE’s Aboriginal Communitiesand Non-renewable ResourceDevelopment Program — Origins,Development and GoalNRTEE member Cindy Kenny-Gilday first raised thechallenges facing Aboriginal communities in Canada’s Northat an NRTEE plenary session in 1997. Ms. Kenny-Gildayspoke from first-hand experience as she explained thepotential impacts of non-renewable resource developmenton the traditional way of life of her people and on theNorth’s unique environment. She described a history ofthe benefits from development flowing south, leavingnothing behind but environmental liabilities and socialdisruption. Ms. Kenny-Gilday also explained the hopesof Aboriginal people for greater self-sufficiency and abetter future for their young people. Proposed diamondmines and increasing oil and gas activity in the NWTadded a sense of urgency to her message.


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After hearing from several northern leaders, includingStephen Kakfwi, then-Minister of Resources, Wildlifeand Economic Development for the NWT, the NRTEEendorsed Ms. Kenny-Gilday’s proposal to initiate a pro-gram to examine the competing environmental, socialand economic interests relating to non-renewableresource development and Aboriginal communities in theNorth. The first steps in the Aboriginal Communitiesand Non-renewable Resource Development Programincluded commissioning a background paper to identifykey issues and undertaking a series of meetings with keyplayers to confirm the direction to be taken. These stepsoccurred in late 1998 and early 1999 (see list of programparticipants in Appendix A).

A multi-stakeholder Task Force of NRTEE mem-bers and leading representatives of the various interestswas then established to direct the program and conductthe required consultations.19 The Task Force held its firstmeeting in September 1999 and established the followingprogram goal:

To determine measures that Aboriginal people, industry, government, environmental non-governmentalorganizations and academics must implement toensure that non-renewable resource development inCanada’s North over the next 10 to 25 years supports economically viable, self-sufficient Aboriginalcommunities without compromising the ecologicalintegrity of the environment or the retention of socialstructures and cultures.

As noted above, the geographic focus of the programwas restricted to the NWT in order to make the selec-tion of issues and case studies more manageable. TheNRTEE’s intention from the outset, however, was toensure that the lessons from this program would beapplicable throughout the North.

A 10- to 25-year time frame was selected for tworeasons. First, the Task Force felt that many of themeasures that should be taken now might only yieldtheir full benefits over that period of time. A long-term

perspective was necessary to avoid the temptation toadopt band-aid solutions to fundamental problems.Second, the Task Force wished to exclude considerationof immediate political controversies and project-specificissues. Again, the intention was to take a long-term view.It should be emphasized that 10 to 25 years is the timeframe for achieving desired results, not for taking action.The Task Force recognized from the beginning theimmediacy of the issues facing Aboriginal communitiesin the North. Given the current pace of non-renewableresource development, the pressures are real and growing.The NRTEE underlines the urgent need for rapid actionon the recommendations presented in this report.

To better understand the complex issues surroundingnon-renewable resource development and Aboriginalcommunities in the NWT, the Task Force commissioneda series of research papers20 and undertook numerousconsultations. The consultation process, in particular,served a dual purpose. One objective was to obtain inputfrom Aboriginal people, government, industry, stake-holder organizations and other northerners regarding theTask Force’s mandate. Also important, however, was therole of these meetings in raising the profile of theNRTEE’s program and the issues that it addressed.Task Force members agreed that in addition to producingspecific recommendations, a major objective of theirwork was to put the North “on the radar screen” ofCanadians in general and of decision makers in Ottawain particular.

On the basis of this research and consultation,the Task Force met in June 2000 to decide on its finalrecommendations. This report represents the views ofTask Force members and the NRTEE as a whole onthe principal measures required to achieve the goal ofsustainable Aboriginal communities in the context ofnon-renewable resource development in the NWT.

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C h a p t e r T w oC h a p t e r T w o

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Toward SustainableAboriginal Communities —A Vision for 2010–2025

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Aboriginal Communities and Non-renewable Resource Development Toward Sustainable Aboriginal Communities — A Vision for 2010–2025

A Checklist of SustainabilityIndicatorsWhat does it mean for Aboriginal communities to besustainable? Clearly, sustainability implies more thansimply the ability of communities to persist over time.Sustainable communities exhibit economic, social, cul-tural and environmental viability over the long term.Adapting the Brundtland Commission’s well-knowndefinition of sustainable development, we can say that asustainable community “meets the needs of the presentwithout compromising the ability of future generationsto meet their own needs.”21 Sustainability implies a cer-tain quality of community life, not merely the fact of acommunity’s existence.

There is no universal set of indicators that definessustainable communities. The needs of present andfuture generations in each community will reflect its par-ticular environmental, cultural, social, economic andpolitical context. The NRTEE Task Force has identifiedthe following checklist of sustainability indicators forAboriginal communities in the NWT.

Economic Vitality

• Attractive business climate for all investors (e.g.,clarity and certainty of regulations, access to currentgeoscience data)

• Local retention of benefits (i.e., in the North)• Balance of traditional and non-traditional (i.e.,

wage) economies• Economic diversification (i.e., not dependent on

one sector)• Capacity building for Aboriginal people (e.g., through

education, literacy programs, high-school upgrading,training and opportunities for employment)

Environmental Integrity

• Preservation of ecosystem (i.e., intact, not at risk)• Recognition and inclusion of traditional knowledge• Minimization of pollution• Identification and mitigation of cumulative effects

(i.e., environmental, social, cultural)

Social and Cultural Well-Being

• Retention of Aboriginal traditions, culture, languageand way of life

T he NRTEE’s recommendations for specific initiatives to support sustainable

Aboriginal communities are the main focus of this report. Before turning to these recommendations,

however, it is important to describe the broader vision that emerged from the NRTEE’s Aboriginal

Communities and Non-renewable Resource Development Program. This section of the report outlines

the principal components of that vision. It begins with a set of sustainability indicators for Aboriginal

communities. A brief report on the status of those indicators in the NWT follows. The discussion then

turns to the role of non-renewable resource development in promoting sustainability. Specific elements

of the NRTEE’s vision for sustainable Aboriginal communities are identified next. Finally, this section

explains why partnerships and cooperation, along with strategic investment in key initiatives, are

essential to achieving the NRTEE’s vision of sustainable Aboriginal communities.

Toward Sustainable Aboriginal Communities — A Vision for 2010–2025 Aboriginal Communities and Non-renewable Resource Development

22

• Meaningful Aboriginal community participation (i.e.,in all stages of a project’s exploration, developmentand implementation)

• Capacity in Aboriginal communities to addresshealth and social problems

Equity

• Equitable distribution of costs and benefits (e.g.,within and among communities, between communitiesand developers, and across different economicinterests and generations)

Control over Natural Resources

• Clearly defined system of governance that respectsthe rights of all people in the North and supportsAboriginal people’s land claim settlements and controlover natural resources

These indicators encompass the environmental,economic and social dimensions of sustainability. Theimportance of equity in relationships between individ-uals, groups and generations is also emphasized. Finally,the focus on governance and control over naturalresources reflects the particular history and aspirationsof Aboriginal people in Canada.

Status Report on SustainabilityIndicatorsThe NRTEE’s research and consultations show clearlythat significant progress remains to be made on a numberof key indicators in order to achieve sustainableAboriginal communities in the NWT. The current statusof these indicators is briefly summarized here.

Renewed activity in the oil and gas sector and newactivity in diamond mining have provided what is formany Aboriginal communities the first significant oppor-tunity to benefit from non-renewable resourcedevelopment. The long-term economic vitality ofAboriginal communities continues to be problematic,however, because:

• the investment climate remains uncertain, withindustry seeing the NWT as a high-cost, high-riskjurisdiction and expressing concerns about thecomplex and uncertain regulatory process andcontinually evolving ad hoc requirements;

• the lack of transportation infrastructure in the NWTimpedes economic development — industry finds itdifficult to move goods and services (e.g., Canada’s

first two diamond mines, million-dollar industries,must rely on the Lupin winter road, a temporarytwo-month ice road extending from Yellowknife tothe mine site, to move equipment and supplies),and people find it difficult to access employmentopportunities or potential tourism sites;

• Aboriginal communities often secure too few bene-fits from non-renewable resource development,with low literacy and skill levels being a particu-larly significant obstacle to Aboriginalinvolvement in the non-renewable resource sectors;

• a balance between traditional and wage economieshas yet to be achieved in many communities, asindividuals struggle to adapt to the demands ofindustrial employment while retaining their connectionto the land and to their traditional way of life; and

• the abrupt decline in oil and gas exploration in theMackenzie Delta and Beaufort Sea during the 1980sand the recent closure of gold mines in response tofalling world prices confirm that Aboriginal commu-nities remain vulnerable to the boom-and-bustcycles of resource industries and to the exhaustionof economic deposits at specific projects.

Concerns relating to environmental integrity reflect thepast “legacy of liability” from resource development andthe commitment of Aboriginal people and other north-erners to ensure that these mistakes are not repeated.Progress on this indicator is evident in several areas.Project review and regulatory processes have beenimproved in order to better protect ecosystems andminimize pollution. Planning for the BHP and Diavikdiamond mines involved many environmental studies,and both projects are subject to detailed regulatoryrequirements and environmental agreements. The recog-nition and inclusion of traditional knowledge isbecoming more widely accepted, as illustrated by theWest Kitikmeot/Slave Study.22

Further work is required, however, to collect baselinedata and monitor for the long-term effects of develop-ment. Environmental integrity is also at risk because thecumulative effects of multiple developments may not beproperly addressed through project-specific regulatoryprocesses. As the pace of activity increases, cumulativeeffects will become an increasingly important issue.

The discussion of social and cultural issues in theprevious section of this report shows clearly that non-renewable resource development continues to have both

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decisions are made by northerners, significant challengesremain. For example, some of the new Aboriginal andnorthern institutions lack the highly skilled personneland the funding necessary to discharge their responsibili-ties efficiently and effectively. The multitude of boards,agencies and processes for managing non-renewableresource development may also accentuate problems suchas undue regulatory complexity, administrative inefficiencyand personal burnout. The ability of Aboriginal people toexercise greater control over natural resource developmentwill be hampered if the proliferation of consultation anddecision-making processes overwhelms the limited humanand financial resources of Aboriginal communities.

This brief status report suggests the need for policyinitiatives in all the areas identified by the NRTEE’s sus-tainability indicators. More generally, it highlights thecomplex relationship between sustainability and non-renewable resources. The NRTEE has assessed both theopportunities and the risks of a strategy to lever long-term sustainability through non-renewable resourcedevelopment. The strengths and limitations of this strategywere the subject of careful scrutiny and lively debate

positive and negative effects on the social and cultural well-being of Aboriginal communities. While economicactivity is essential to address the demoralizing effects ofpoverty and underemployment in Aboriginal communities,non-renewable resource development and the transitionto the wage economy often destabilize traditional family,social and economic arrangements. Retention of tradi-tions and culture is increasingly difficult. Communitiesalso face significant obstacles as they attempt to addressthe social and cultural impacts of development by par-ticipating in decision making. Many Aboriginalcommunities lack the human and financial resources toparticipate effectively in project review and regulatoryprocesses and in the consultations and negotiationssurrounding resource development.

Equity concerns arise because the costs and benefitsof non-renewable resource development will inevitablybe distributed unevenly unless mechanisms exist forredistribution and economic diversification. A failure toaddress these issues can be socially divisive when certaingroups bear the costs of development but are excludedfrom the benefits. Progress in achieving a fairer alloca-tion of benefits has been made through the settlementof land claims and through project-specific impact andbenefits agreements. These arrangements may, however,produce disparities themselves if significant benefitsaccrue primarily to those communities located nearmajor projects. More generally, there is a widespreadview in the NWT that the flow of revenue from non-renewable resource development to the federal governmentis a source of inequity. This revenue, it is argued, shouldbe retained in the North in order to promote community,regional and territorial self-sufficiency and accountabilityand to meet the costs associated with development.

Control over natural resources is the final indicator ofsustainable Aboriginal communities. The key determinantof progress in this area is the state of land claims andself-government. Aboriginal people with settled claimshave formal means of exercising a measure of controlover the pace and scale of development on traditionallands. Where land claims and self-government issuesremain unresolved, Aboriginal communities exercise lesscontrol. Even where claims are settled, significantimpediments to this aspect of sustainability exist.

A concern shared by many NWT residents is thatsignificant decision-making authority continues to restwith governments and institutions outside the Northand not directly accountable to northerners. Even when

Aboriginal people clearly want programs

within their own communities and value

ongoing contact with family and friends as

an important component of education.


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throughout the NRTEE’s consultations, research andTask Force deliberations. These discussions yielded aconsensus that recommendations to improve the statusof sustainability indicators must be based on a realisticassessment of the role that non-renewable resourcedevelopment can play in support of the NRTEE’s visionfor sustainable Aboriginal communities in the NWT andelsewhere in northern Canada.

The Role for Non-renewable Resource DevelopmentThe magnitude of opportunity from non-renewableresource development in the NWT is substantial. Asdescribed earlier in this report, several thousands ofjobs and billions of dollars of revenue will likely be gen-erated by the mining, oil and gas, and pipeline sectorsover the coming 10 to 25 years. Indirect economic spin-offs will also be significant. The precise amount ofthese direct and indirect benefits for the NWT in gener-al and for Aboriginal communities in particular willdepend on the ability of northerners to take advantageof employment and business opportunities and to retaincontrol over a significant portion of resource revenues.

The earlier discussion of social issues affectingAboriginal people shows that non-renewable resourcedevelopment has the potential to provide much-neededemployment and economic opportunities. If the risks areproperly managed, non-renewable resource developmentcould be used to lever a sustainable future for Aboriginalcommunities.

The NRTEE is convinced that the responsibledevelopment of non-renewable resources in the NWToffers a unique opportunity to generate significant eco-nomic activity that is consistent with the social,cultural and environmental values that underpinAboriginal society. In fact, economic developmentbased in part on non-renewable resources should placeAboriginal communities in a better position to addressthe social, cultural and environmental issues that confrontthem. All three elements in the sustainability triad ofeconomy, society and environment are closely interrelatedand mutually supportive. In particular, an economicallyimpoverished people will be hard pressed to makeprogress on social and environmental problems.

The NRTEE’s optimism regarding the contributionof non-renewable resources to sustainability should not,however, be misinterpreted. Non-renewable resourcedevelopment will not solve all of the problems facingAboriginal communities, nor will it meet the needs ofall northerners.

Some Aboriginal communities will be far from oiland gas or mining projects and may therefore receivefew direct benefits. In other cases, the economic focusof communities may be on traditional activities such assubsistence hunting and trapping or on opportunitiesprovided by tourism, crafts and commercial renewableresource harvesting. Some individuals in Aboriginal com-munities — as in the rest of Canadian society — willnot aspire to careers in mining, the oil and gas industryor related businesses. Others may, despite their bestefforts, fail to secure employment in these sectors.

Non-renewable resource sectors are also character-ized by boom-and-bust cycles — as northerners are wellaware from direct and recent experience. While someforecasts for diamond mining and the development of

Several thousands of jobs and billions of

dollars of revenue will likely be generated by

the mining, oil and gas, and pipeline sectors

over the coming 10 to 25 years. Indirect

economic spinoffs will also be significant.

oil and gas reserves suggest significanteconomic potential over many decades,voices of caution should not be ignored.These commodities trade within interna-tional markets that respond to globalcompetitive forces and powerful producercartels. Both of these market characteristicsentail potential risks. Opportunities todaycould disappear down the road as a resultof a general economic downturn, unex-pected increases in global supply, changesin consumer preferences, the emergenceof substitute products, regulatory restric-tions, the collapse or erosion of a cartel’sability to discipline producers and a hostof other factors. The lessons of historyare clear. Sharp downturns in non-renew-able resource industries are not inevitable, but they cannever be ruled out completely.

The relative importance of non-renewable resourceswithin the northern economy is another factor to benoted. In 1999, approximately 43% of the jobs in theNWT were in government, health and education.23 Theservice sector also accounted for over 40% of employ-ment, divided between transportation andcommunications, retail and wholesale, and other services.In contrast, about 6% of the territory’s jobs were inthe mining industry, with other primary sectors generat-ing less than 1%. These figures for direct employmentdo not, of course, show the percentage of governmentand service jobs supported by resource-based economicactivity. It is also true that non-renewable resource devel-opment plays a key role in the NWT’s private sector andis a significant wealth generator. Nonetheless, the publicand service sectors will continue to be the largestemployers by far in the NWT. The potential for non-renewable resource development to transform thenorthern economy is correspondingly limited.

Finally, the fact that non-renewable resources arenon-renewable has obvious implications for their role insupport of sustainable Aboriginal communities. Themost accessible and economically viable mineral depositsand oil and gas reserves will inevitably be depleted withina finite period of time. Improving market conditions,global scarcity of key resources and the NWT’s tremen-dous mineral potential may, however, be sufficient toensure a steady supply of new projects over many

decades. Non-renewable resource industries inthe NWT are therefore viewed by some peo-ple as economically sustainable over thelong-term. If the social and environmentalimpacts of these industries prove to be man-ageable, they may meet broader sustainabilitycriteria from the perspective of decision mak-ers concerned with current economic, socialand political issues. The timelines used bytoday’s business leaders, policy makers andplanners are not, however, the only ones thatare relevant. For Aboriginal communitieswhose commitment to the land is measuredover seven generations, careful considerationof what will happen after non-renewableresources are gone is both inevitable anddesirable.

For all these reasons, the NRTEE recognizes thatnon-renewable resource development is not a panaceafor the NWT in general or for Aboriginal communitiesin particular. Initiatives to promote activity in the non-renewable resource sectors should be situated within abroader strategy directed toward economic diversifica-tion and the careful management of the NWT’sprecious — and potentially inexhaustible — endow-ment of renewable resources. Nonetheless, theNRTEE’s decision to focus on non-renewable resourcedevelopment reflects a judgment that, at this point inthe NWT’s history, the mining and oil and gas sectorscan provide key economic support for the long-termsustainability of Aboriginal communities.

Specific Elements of the NRTEE’s VisionThe NRTEE’s vision for achieving sustainableAboriginal communities over the next 10 to 25 yearsincludes specific improvements in the key sustainabilityindicators outlined above in the section A Checklist ofSustainability Indicators. These improvements focus,in most cases, on the link between sustainability andnon-renewable resource development. For each area,key objectives can be identified as follows.

Economic Vitality

• an improved investment climate brought about by areduction in the risks, costs and uncertainties ofresource exploration and development in the North;

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26

• greater capacity among residents of Aboriginalcommunities, so that they have the basic literacy, theformal education, the technical/professional train-ing and the business skills and capital to enablethem to participate at all levels in development; and

• improved mechanisms to maximize Aboriginalemployment and business opportunities fromresource development and to direct resource rev-enues to capacity building and economicdiversification.

Environmental Integrity

• improved baseline data and ongoing monitoring ofthe effects of development; and

• the systematic evaluation of individual projectsusing a well-developed framework for managingcumulative effects, which includes the use of bothtraditional and scientific knowledge.

Social and Cultural Well-Being

• development that occurs at a pace and scale thatreflects the wishes of Aboriginal communities andother northerners as they balance social, environ-mental and economic objectives, bearing in mindthe economic drivers behind industry’s investmentdecisions; and

• the consideration of social and cultural impacts inall decision making on resource development, sothat Aboriginal people can be involved in non-renewable resource development while maintaininga stable social and cultural life in communities.

Equity

• the use of resource revenue to support territorialself-sufficiency, Aboriginal self-government andcommunity capacity to address the costs andopportunities of development; and

• economic diversification, redistribution and thestaging of development so as to spread the benefitsof development and ensure ongoing economic andsocial stability for communities.

Control Over Natural Resources

• increased self-determination for Aboriginal commu-nities and other northerners, through the location ofprimary decision-making authority and accountability

in northern institutions that achieve a balancebetween community, regional and territorial gover-nance and through greater northern input intoexisting decision-making authorities; and

• Aboriginal capacity to participate effectively in allprocesses related to the planning, approval and carry-ing out of non-renewable resource development.

Measures to implement this vision would result in sig-nificant progress on the principal sustainability indicatorsidentified by the NRTEE. The recommendations describedlater in this report are intended to achieve this objective.The final components of the vision that underlies theserecommendations are two key themes that were raisedrepeatedly throughout the NRTEE’s consultations. Thesethemes are 1) the importance of partnerships andimproved cooperation and 2) the need for strategic invest-ment to promote non-renewable resource development andsustainable Aboriginal communities.

Partnerships and CooperationThe conditions required for sustainable Aboriginal com-munities can only be put in place through the coordinatedefforts of governments, Aboriginal people, industry andother key players. Acting alone, none of these groups hasthe ability to do the job. Formal partnerships and informalcooperation are essential.

At the political level, a strong and continuing part-nership between the Aboriginal, territorial and federalgovernments will be needed over the coming decades.Regardless of the progress on devolution and Aboriginalself-government, jurisdictional and financial realitiesmake it inevitable that all three orders of governmentwill have important contributions to make for the fore-seeable future. The dissipation of time, financial resourcesand goodwill through interjurisdictional rivalry anduncoordinated action can only undermine efforts tosecure a better future for Aboriginal communities andfor all residents of the NWT. The time has come for agenuine partnership among all governments in usingnon-renewable resource development as a tool for buildingsustainable Aboriginal communities.

A strong intergovernmental partnership is not,however, sufficient. Industry also has a key role to play.Private sector investment is the motor of a sustainabilitystrategy based on non-renewable resources. Industryhas both the expertise and the financial resources tocontribute significantly to maximizing the benefits and

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minimizing the risks of development for Aboriginalcommunities. Harnessing this potential requires a partner-ship that facilitates communication, coordinatesinitiatives and ensures accountability. Most importantly,the appropriate roles and responsibilities of industry,government and Aboriginal organizations should beclearly defined.

The network of partnerships must also include arange of other key players, notably community represen-tatives and the non-governmental organizations thatspeak for various interests within society. These individu-als and organizations have a wealth of expertise onenvironmental, social, cultural and other matters. Theyshould be formally included in consultations and deci-sion-making processes.

Participants in the NRTEE’s consultations under-lined a number of specific benefits from partnershipsand cooperation. These benefits include:

• capitalizing on complementary expertise and perspectives;

• avoiding duplication of effort;• pooling financial resources in support of common

initiatives; and• ensuring inclusiveness and transparency in decision

making — notably by reducing the likelihood of“backroom deals.”

The NRTEE’s policy recommendations, discussed laterin this report, provide concrete illustrations of howthese benefits can be achieved.

The NRTEE is not unique in its focus on partner-ship and cooperation. These themes figure prominentlyin the Department of Indian Affairs and NorthernDevelopment (DIAND)’s sustainable developmentstrategy24 and in Gathering Strength — Canada’sAboriginal Action Plan.25 The GNWT’s EconomicStrategy Panel identified the promotion of partnershipsbetween Aboriginal and non-Aboriginal groups andcorporations, between the public sector and the privatesector, and between communities and regions as one ofits guiding principles.26 Partnership is the key to theGNWT’s Non-renewable Resource Strategy.27

The report of the Joint Aboriginal-IndustryResource Development Workshop also underlined the“pressing need to integrate the efforts of all key players toensure that maximum benefits from development ofmining/oil/gas resources accrue to Aboriginal groupsand northerners alike.”28 Noting that there is “no coordi-nated approach to developing federal and territorial

economic development programs which significantlyinvolve industry and Aboriginal key players,” the reportincludes an unambiguous appeal for greater cooperationand partnerships in support of northern economicdevelopment.29

In keeping with the spirit of cooperation andmutual respect that was evident throughout theAboriginal Communities and Non-renewable ResourceDevelopment Program, the NRTEE firmly believes thatstrong partnerships are essential to achieving sustainableAboriginal communities in the NWT. The key policy rec-ommendations presented below all reflect the need foran ongoing commitment to these partnerships amonggovernments, industry, Aboriginal communities andother key players.

Strategic InvestmentPartnerships and cooperation are needed to achieve theNRTEE’s vision of sustainable Aboriginal communities,but they will not always be enough. In many instances,money will also be required. The importance of seizingopportunities for strategic investment was a recurringtheme throughout the NRTEE’s consultations and isreflected in all of the resulting policy recommendations.

Industry has both the expertise and

the financial resources to contribute

significantly to maximizing the

benefits and minimizing the risks

of development for Aboriginal

communities.

28

The use of the term “strategic investment” is noaccident. Funding should be strategically directed toprocesses and policy initiatives that meet specific needs ofAboriginal communities in the context of non-renewableresource development. The need for a clear strategicfocus is explained as follows in the report of the JointAboriginal-Industry Resource Development Workshop:

The current roster of government development programslack a non-renewable resource development focus and donot recognize the strategic importance of mineral/oil/gasactivities to future economic growth. ...The current federaland territorial policy base continues to focus on an “allthings to all people” approach which has concentrated pub-lic funds on “wealth consumers” instead of “wealthgenerators”. History has proven that broad programsattempting to give something to everyone have not worked,and that the impact is short lived.30

The disappointing record of some past initiatives— notably those directed to strengthening the econo-my of small communities — is also highlighted in thereport of the Economic Strategy Panel.31 This reportrecommends funding for a number of specific strategicinitiatives in support of non-renewable resourcedevelopment that are identical to NRTEE priorities.32

The description of these funding initiatives as“investment” is also fundamental to the NRTEE’s policyrecommendations. In all areas where additional fundingis proposed, a sound “business case” can be made thatexpenditures now will yield significant positive returnsfor the NWT and Canada as a whole. The notion of abusiness case is based on four key arguments.

First, expenditures in key areas can facilitate non-renewable resource development, leading directly to astream of royalties and taxes to government. Significantindirect economic spinoffs will also continue well intothe future (e.g., geoscience programs and infrastructuredevelopment). Other initiatives that will improve the cli-mate for investment, as well as benefiting Aboriginalcommunities, are proposed below. Expenditure that yields

positive net financial returns to government throughnew royalties and taxes is clearly a good investment.

Second, strategic funding can produce a financialdividend by reducing the transaction costs of development— the unnecessary costs incurred by all parties as a resultof uncertain and inefficient regulatory and negotiatedprocesses. For example, expenditures to support consul-tation and cumulative effects management should reducethe costs in these areas for governments, Aboriginalcommunities, industry and other key players. Moneysaved in this way is available for other uses, thus providinga direct return on investment.

Third, funding for key initiatives now has the poten-tial to reduce current and future expenditures in areassuch as social assistance. For example, expenditures oneducation and training are likely to yield net benefits ifthe result is employment for a significant number ofpeople who would otherwise collect social assistance.More generally, a concerted strategy to promote sustainableAboriginal communities could reduce the long-termcosts associated with the range of social problems thatare now so prevalent in the NWT and throughout north-ern Canada.

Fourth, a strong case can be made that strategicexpenditure now can prevent environmental and socialproblems that, if left unattended, will be much morecostly to address in the future. The “legacy of liability”of abandoned mine sites in the North stands as a clearwarning of the long-term costs of failing to take reason-able preventive measures. Expenditures in areas such ascumulative effects management and monitoring can helpto ensure that development today does not impose aburden of environmental damage and unfunded liabilityon future generations.

Initiatives to promote activity in the non-renewable

resource sectors should be situated within a broader

strategy directed toward economic diversification and

the careful management of the NWT’s precious —

and potentially inexhaustible — endowment of

renewable resources.

29


Funding from government and industry will berequired if the NRTEE’s vision of sustainableAboriginal communities is to become a reality. The flowof money will not, however, be one way. The economicpotential of non-renewable resource development andthe focus on areas where tangible benefits can beachieved provide strong support for the argu-ment that the expendituresrecommended by the NRTEE arestrategic investments that willgenerate net positive returns.

Implementing theVision — The Political ContextThe NRTEE’s vision ofsustainable Aboriginal communities over the next10 to 25 years provides thebasis for the specific recommen-dations presented in this report. The

NRTEE is fully aware, however, that its proposals mustbe viewed against the backdrop of monumental changesin the political landscape of Canada’s northern territo-ries. Developments in two areas in particular will definethe context within which the NRTEE’s vision will beimplemented. First, the negotiation and implementation of

land claim and self-government agreements areof fundamental importance to Aboriginal

communities throughout the North andwill have direct political and economic

consequences for all northerners.Second, profound changes ingovernance will follow from thedevolution of powers by thefederal government to territorialand Aboriginal governments.The next section provides abrief overview of the NRTEE’s

perspective on these two keyelements of the political context.

31

C h a p t e r T h r e eC h a p t e r T h r e e

33

The Northwest Territoriesin Transition

33

Aboriginal Communities and Non-renewable Resource Development The Northwest Territories in Transition

This period of transition in the NWT has made for achallenging and fluid environment for the NRTEE’sAboriginal Communities and Non-renewable ResourceDevelopment Program. It is also clear that fundamentalchanges will continue over the 10- to 25-year time frameused by the NRTEE Task Force. A key issue facing theTask Force was how to take account of this politicalevolution in its consultations and recommendations.

This section of the report highlights the importanceof two key aspects of the NWT’s political evolutionfor the NRTEE’s vision of sustainable Aboriginal com-munities: the settlement and implementation of landclaim and self-government agreements and the devolutionof powers to northern governments. In both of theseareas, there are indications of concrete progress andgood intentions. The pace of progress, however, is tooslow. The NRTEE believes that it is imperative for gov-ernments and Aboriginal organizations to address theseissues with the appropriate sense of urgency. Thesefundamental changes in the governance of the NWTshould not, however, stand in the way of immediate

action on specific policy issues relating to non-renewableresource development and the sustainability ofAboriginal communities.

Land Claims and Self-GovernmentThe settlement of land claims and the completion ofself-government negotiations are universally viewed aspivotal events for both non-renewable resource develop-ment and the emergence of sustainable Aboriginalcommunities. Land claim and self-government agree-ments in themselves do not, of course, resolve allgovernance issues. Nonetheless, they establish the basiclegal rights, institutional arrangements and politicalframework within which Aboriginal communities willdevelop their new relationships with governments,resource developers and other key players.

Land claim agreements are particularly important fornon-renewable resource development and Aboriginalcommunities since they determine the extent of Aboriginalresource ownership and establish the institutions that

T he NWT’s rapid political evolution has profound implications for the

development of non-renewable resources and the emergence of sustainable Aboriginal communities.

The creation of Nunavut in 1999 resulted in the emergence of a “new” NWT in the western Arctic.

As noted earlier, the NWT has three settled land claims, one land claim and self-government process

at the agreement-in-principle stage, and several others still to be completed. The devolution of

authority over non-renewable resources from the federal government to territorial and Aboriginal

governments continues to be actively discussed. At the same time, the regulatory framework in the

NWT is evolving and maturing. The Mackenzie Valley Resource Management Act is being implemented,

and there is ongoing experimentation with project-specific agreements on environmental and

socio-economic matters. Finally, the process of securing meaningful Aboriginal participation in decision

making is continuing through the implementation of land claim agreements and other initiatives.

The Northwest Territories in Transition Aboriginal Communities and Non-renewable Resource Development

34

guarantee meaningful Aboriginal participation in decisionmaking. Conversely, the presence of unsettled claimscreates a climate of uncertainty regarding the ownershipand regulation of lands and resources. Significantimprovements in a number of the NRTEE’s sustainabilityindicators would be achieved simply by completing landclaim and self-government processes throughout the NWT.

The importance of settling land claims in an expedi-tious manner was a recurring theme throughout theNRTEE’s consultations, as it has been in other processes.33

NRTEE Task Force members expressed strong views onthis issue. Some argued that without settled claims, it willbe difficult or impossible to make significant progress onmany of the issues facing Aboriginal communities. Atthe same time, the urgency of these issues is such thatwaiting for all land claims to be settled before addressingthem is not a satisfactory option.

A key objective in the NWT’s political evolution isto ensure the meaningful participation of Aboriginalcommunities in the social, cultural, political and economicprocesses that are affecting them. Achieving meaningfulparticipation involves more than simply signing landclaim and self-government agreements. It also requiresongoing efforts to ensure that these new arrangementswork as intended.

A number of Task Force members and other partic-ipants in the NRTEE consultations expressed frustrationwith what they see as a lack of progress in achievingthis objective. Frustration appears particularly greatwhen land claim agreements have been reached andother initiatives undertaken, but the expectations ofAboriginal parties have been not been met. Aboriginalpeople feel strongly that the spirit and letter of theseagreements must be respected.

Successful implementation of land claim agreementsand other arrangements designed to provide Aboriginalpeople with greater self-determination is a challenge thatshould not be underestimated. Ongoing efforts throughoutimplementation are necessary to resolve the inevitableambiguities in these agreements. Cross-cultural commu-nication will continue to be an issue, since the samewords may have very different meanings when viewedfrom opposite sides of a cultural divide. The best effortsof parties to comply with their obligations may be frus-trated by a lack of financial or human resources or byother circumstances beyond their control. Since theimplementation of agreements is rarely the responsibility ofthose who negotiate them, an evolution in interpretation

and application sometimes occurs. In some cases, partiessimply fail to live up to their obligations.

The NRTEE wishes to underline the importance ofachieving rapid progress on finalizing remaining land claimand self-government agreements. Ongoing attention toimplementation issues will also be required. The NRTEEurges the federal government, the GNWT and Aboriginalorganizations to work together to complete the negotiationof outstanding land claim and self-government agreementsand to ensure the effective implementation of theseagreements throughout the NWT.

Devolution of Power to Northern GovernmentsThe devolution of authority over non-renewableresources from the federal government to territorial andAboriginal governments is a matter of utmost impor-tance to the NWT. The NRTEE’s consultations suggestwidespread agreement among Aboriginal people andother northerners that significant powers, along with themoney needed to exercise them effectively, should betransferred from the federal government, based inOttawa, to the NWT. Many northerners feel that toomany decisions affecting their lives are made by peoplefar away who are not directly accountable to them andwho do not understand or experience northern realitiesin the same way as NWT residents.

These views received strong support from manyNRTEE Task Force members, although it was noted thata continuing role for some existing decision-making bod-ies could provide a measure of certainty that industryconsiders valuable. Overall, however, the devolution ofpower to northern governments is recognized by theNRTEE as both desirable and inevitable.

There are, however, differing views on how best toproceed with devolution. The GNWT is strongly infavour of rapid progress on devolution, particularly inareas relating to non-renewable resource development.34

Some Aboriginal organizations are more cautious, arguingthat the place of Aboriginal governments within a moredecentralized system of governance should be clarifiedbefore the federal government transfers significant powersto the GNWT. Both views were expressed during theNRTEE consultations and by Task Force members.The federal government has stated its commitment toproceed with devolution but appears to be looking forgreater evidence of consensus within the NWT beforemoving forward.

35

Aboriginal Communities and Non-renewable Resource Development The Northwest Territories in Transition

Closely intertwined with jurisdictional issues relatingto devolution are questions of program funding andresource revenue sharing. Northern governments will needincreased funding to support their new responsibilities.In addition, non-renewable resource development in theNWT could generate a fiscal surplus through royalties andtaxes. The allocation of that surplus among the federal,territorial and Aboriginal orders of government is acontentious issue. Given the magnitude of projectedresource revenue flows over the coming decades, thestakes are high for all parties.

The NRTEE recognizes the significance of devolu-tion to the ongoing political evolution of the NWT.Self-determination and self-sufficiency are fundamentalaspirations of northerners. Devolution holds the prom-ise of shifting greater authority and accountability tonorthern institutions. The NRTEE believes that a moredecentralized system of governance, accompanied by thenecessary investment in capacity building, will increasethe ability of Aboriginal communities to achieve sustain-ability in the context of non-renewable resourcedevelopment.

These important and sensitive issues are currentlybeing addressed through the Intergovernmental Forum,an important new initiative for defining the future rela-tionships among federal, territorial and Aboriginalgovernments. The NRTEE strongly believes that thedevolution of authority over non-renewable resourcesto the NWT and Aboriginal governments should beactively pursued through processes such as theIntergovernmental Forum.

The Need for Immediate Action

The NRTEE’s vision of sustainable Aboriginal communi-ties is entirely consistent with the ongoing politicalevolution of the NWT. While the NRTEE has notexamined this evolution in detail or provided specific rec-ommendations on how best to complete it, theimportance of “getting the job done” in the key areasidentified above is clear to everyone. The profoundtransition currently occurring in the NWT should not,however, be used as an excuse for inaction in specific

policy areas where the NRTEE’s vision can beadvanced.

The need for immediate action is well recognized.When he was Minister of Resources, Wildlife andEconomic Development for the NWT, Stephen Kakfwiunderlined this point before the Economic StrategyPanel. The Panel reported that:

In our initial meeting with Minister Kakfwi in June of1999, he stressed the importance of timing. Resourcedevelopments in the areas of oil and gas and mining wereputting increasing pressure on the territorial government,the federal government, aboriginal governments and com-munities. Because economic events were overtaking theability of residents to make informed decisions abouttheir economic future, there was a need to act now.

This was particularly true if we wanted to provide asecure future for our youth. In many communities, youthunemployment exceeds 40%. If we waited until a new gov-ernment was up and running, or land claims were settled,or the new self-governments were firmly established, wemight fail to meet the pressing needs of this generation.”35

The NRTEE fully accepts the wisdom and urgencyof this message. In this spirit, the rest of this reportfocuses on specific policy measures that can be initiatednow — with the instruments of governance currentlyin place — to ensure that the development of theNWT’s non-renewable resources promotes the NRTEE’svision of sustainable Aboriginal communities.

37

C h a p t e r F o u rC h a p t e r F o u r

44

Cumulative EffectsManagement

39

Aboriginal Communities and Non-renewable Resource Development Cumulative Effects Management

The NRTEE recognizes that cumulative effects manage-ment does not encompass all environmental management.Broader land use initiatives, such as the NWT ProtectedAreas Strategy, will clearly have important implications forresource development and the protection of ecosystemsin the NWT. The NRTEE’s Aboriginal Communities andNon-renewable Resource Development Program identi-fied cumulative effects management as a particular prioritygiven the pressing environmental and social issues raisedby the surge of activity in the NWT’s non-renewableresource sectors. There is no doubt, however, that theNWT Protected Areas Strategy and other land use plan-ning and environmental management initiatives are alsoessential to maintaining the balance between environment,economy and society that is the hallmark of sustainabledevelopment.

The NRTEE also notes that improved cumulativeeffects management will not address the “legacy of liabili-

ty” from the past. This important issue was identifiedearly on in the Aboriginal Communities and Non-renew-able Development Program and was raised at differenttimes throughout the NRTEE process by representativesfrom Aboriginal organizations, environmental groupsand government. Aboriginal people and other northern-ers are understandably concerned with the ongoing risksto the environment and to human health that are theresult of non-renewable resource projects that wereabandoned without proper reclamation. The NRTEErecognizes the urgent need to deal with contaminatedand hazardous sites in the North and believes that signif-icant funding is required to address this problem. Inparticular, cleaning up and reclaiming these sites willrequire a long-term financial commitment from the fed-eral government that goes well beyond funding toconduct studies and compile inventories. The NRTEE’sdecision not to develop specific recommendations in this

C umulative effects management was identified through the NRTEE’s

consultations as essential for the sustainability of Aboriginal communities in northern Canada.

The most significant risks from non-renewable resource development in the future are likely to arise

from the cumulative environmental, social and cultural impacts of multiple exploration programs,

mines, oil and gas facilities, and pipelines, along with the roads and other infrastructure required

to support these projects. Managing cumulative effects also requires attention to the impacts

of past and ongoing projects and activities when planning for new development. Aboriginal people

and other northerners will need to take stock of the current state of the northern environment

as they decide where they want to go with non-renewable resource development and how best

to get there. Ensuring sustainable Aboriginal communities therefore requires a coordinated

policy framework to address cumulative effects. The NRTEE’s recommendations for cumulative effects

management are intended to support important ongoing initiatives in this area.

Cumulative Effects Management Aboriginal Communities and Non-renewable Resource Development

40

area reflects the primary focus of the AboriginalCommunities and Non-renewable ResourceDevelopment Program on the challenges of managingfuture development. This decision should not be inter-preted, however, as an endorsement of the currentsituation regarding contaminated and hazardous sites inthe North. The NRTEE is well aware of the gravity ofthis issue and has called for the development of a coor-dinated national strategy on contaminated sites in otherrecommendations.36

The Importance of Cumulative Effects ManagementThe environmental regulation of major non-renewableresource projects in the NWT has improved significantlyin recent years. Individual projects are subject to closerscrutiny than ever before, as illustrated by the reviewprocesses for the BHP and Diavik diamond mines.There is no doubt that large-scale pipeline projects inthe North would also be subject to comprehensiveenvironmental reviews. Opportunities for public inputare provided throughout project review processes, andthe settlement of land claim agreements is laying thebasis for a greater Aboriginal role in the environmentalregulation of non-renewable resource projects.

Reclamation is another area where standards haveimproved. Mining companies now develop detailed recla-mation plans and post large damage deposits to ensurethat the costs of reclamation are adequately funded upfront. This requirement constitutes a striking contrastwith past practice in the NWT, as illustrated by theenormous unfunded liabilities created by the Giant andColomac mines.

Improvements in the regulation of individual projectsare always possible. Changes over the past few years inenvironmental assessment and in regulatory processesand requirements have, however, reduced the risks ofcatastrophic environmental harm from a single project.Looking to the future of non-renewable resource devel-opment in the North, the most significant remainingchallenge is to address the cumulative effects of multipleprojects and related activities. Even if the direct effectsof each individual mine or producing gas well are withinacceptable limits, the combined impact of numerousprojects in a given area may be significant.

Cumulative effects occur when the impacts ofindividual projects or activities are added together, creatinga bigger total effect. For example, if many small chemical

spills in a lake or river each kill a few fish, the cumulativeeffect may be the elimination of the entire fish population.Cumulative effects can also occur when individualimpacts interact in ways that create new and more signifi-cant effects. Chemicals released from two or more sourcesmay combine in the environment to create a differentand more toxic pollutant.

The term “cumulative effects management” is usedhere to include several related processes designed toidentify, monitor and regulate the cumulative effects ofdevelopment. Cumulative effects assessment generallyrefers to the evaluation of cumulative effects in the plan-ning and environmental assessment processes that applyto individual projects. Cumulative effects monitoringconsists of both baseline data collection and ongoingstudies to identify changes in the environment resultingfrom multiple impacts.

The management of cumulative effects involvesincorporating information from assessment and moni-toring into decision-making processes. Decisions relatingto cumulative effects can be taken at all stages of non-renewable resource development, from initial land useplanning through to the regulation and reclamation ofindividual projects.

Companies wishing to lessen the impact of a pipelineand its related infrastructure on the caribou population,for example,37 will have to consider how the sum orproduct of individual disturbances may lead to changessuch as those in population performance (e.g., demography,size and distribution). Studies have shown that cariboucrossings are less likely to occur where pipelines areelevated (especially under a certain height) and haveunderpasses (rather than buried sections), or whereramps are provided to enable the caribou to cross over thepipelines. However, group size, insect harassment andthe combination of roads and traffic levels parallelingpipelines may interact to create additional deterrents tocaribou pipeline crossings. Crossing frequency has beenfound to be lower when there is a road adjacent to apipeline and traffic volume is high. Elevated pipelinesthat closely parallel roads with high traffic levels reducecrossing success.

The magnitude of opportunity for non-renewableresource development in the NWT brings with it a cor-responding risk that multiple projects and activities mayproduce cumulative effects. Potential impacts on wildlifeand water quality are of particular concern to Aboriginal

41


communities. Managing development so as to minimizethese impacts is necessary to preserve environmentalintegrity and to ensure that Aboriginal communities canachieve a balance between wage economies and theirtraditional land-based way of life. Cumulative effectsmanagement is therefore essential to protecting values thatare fundamental to the NRTEE’s vision of sustainableAboriginal communities.

Obstacles to Cumulative Effects ManagementCumulative effects management is not a simple task.By definition, it requires attention to theimpacts of multiple projects and activitiesthat may occur within a large geo-graphic area over an extendedperiod. These projects and activi-ties, in turn, are often subject to avariety of planning and regula-tory processes. Insufficient dataand scientific uncertainty regard-ing cause-and-effectrelationships are common prob-lems for cumulative effectsmanagement. Uncertainty regardingthe objectives to be achieved is alsocommon. Mechanisms may not exist toidentify and reconcile the sometimes com-peting interests that may be affected bymanagement decisions.

Cumulative effects management in theNWT must address all of these generalproblems. In addition, the environmentalsensitivity of northern regions and thedistinctive social and cultural characteristicsof the NWT present particular challenges for cumula-tive effects management. The institutional context isalso rapidly evolving. New agencies and processes forresource management have been created and are onlybeginning to develop the institutional capacity requiredto fulfil their mandates. More generally, the settlementand implementation of land claim and self-governmentagreements and the prospect of increased devolution arebringing important changes to the overall structure ofgovernance. The NWT thus presents a complex andfluid environment for cumulative effects management.

Requirements for SuccessfulCumulative Effects ManagementThe NRTEE’s consultations and commissioned researchproduced a number of suggestions for addressing thecumulative effects of non-renewable resource develop-ment within the NWT. The following issues should beaddressed by any initiative in this area.

Coordinate and Consolidate Existing InitiativesThe coordination and consolidation of existing initiativesis fundamental to successful cumulative effects manage-

ment. This role is particularly important in theNWT because of the proliferation of

boards, agencies, processes and agree-ments that relate in various ways to

cumulative effects management.For example, opportunities mayexist to coordinate or consolidateproject-specific, regional and ter-ritory-wide monitoringprograms.

Coordination and consolida-tion of initiatives should result in

better and more cost-effective cumu-lative effects management. Duplication

of effort could be reduced, informationgaps identified, and resources pooled tofurther common objectives. Demands onAboriginal organizations, resource devel-opers, government officials and other keyplayers would be more manageable. Anintegrated policy framework for cumula-tive effects management wouldcontribute as well to regulatory certainty

by clarifying the role of project-specific cumulative effectsassessment within environmental management as a whole.The data and policy guidance generated through a cumu-lative effects management framework would help projectproponents to fulfil their obligations under environmen-tal assessment legislation.

Cumulative effects management thus provides anopportunity to streamline and strengthen environmentalplanning and regulation in the NWT. Scientific studies,monitoring programs, regulatory and planning processes,and similar initiatives should be coordinated and, wherepossible, consolidated within the framework developedfor cumulative effects management.

Potential impacts on

wildlife and water quality

are of particular concern to

Aboriginal communities.

42

Respect Boards and Processes EstablishedThrough Land Claim Agreements andImplementing LegislationThe importance of cumulative effects has been recog-nized in the institutional arrangements anddecision-making processes established under land claimagreements and through implementing legislation. Inparticular, aspects of cumulative effects managementcome within the mandates of boards established underthe Mackenzie Valley Resource Management Act, notably theproject review functions of the Mackenzie ValleyEnvironmental Impact Review Board. Cumulativeeffects issues are also addressed under Part 6 of theMackenzie Valley Resource Management Act, which providesfor environmental monitoring and audits. Aboriginalpeople view claims-based institutions and processes asguaranteeing them an effective voice in decision makingon land and resource management. This voice will bestrengthened with the negotiation and implementationof self-government agreements. Cumulative effects man-agement in the NWT must therefore respect and buildon these arrangements.

Incorporate Traditional Aboriginal KnowledgeRecognition of the value of traditional Aboriginalknowledge is a key guiding principle of the WestKitikmeot/Slave Study, an important initiativedescribed later in more detail (subsection Continuity forthe West Kitikmeot/Slave Study). This principle is alsowidely recognized in environmental management initia-tives and project review processes in northern Canada.Traditional knowledge should be considered along withWestern science as a key ingredient of cumulativeeffects management.

Address Socio-Economic EffectsThe NRTEE’s vision of sustainable Aboriginal communi-ties includes both environmental integrity and social and

cultural well-being. Minimizing the risks of non-renewableresource development to Aboriginal communitiesrequires attention to the full range of cumulative effects.The linkages among effects are particularly important toAboriginal communities because social and cultural valuesare inseparable from the land and from traditional land-based activities. Environmental integrity is not just a valuein itself; it is also essential to sustaining social and culturalwell-being. As a result, the cumulative social and culturaleffects of development on Aboriginal communitiesshould be addressed along with other environmental(e.g., biophysical) effects as part of an integrated frame-work for cumulative effects management.

Identify Objectives, Benchmarks and ThresholdsCumulative effects management requires more thanscientific studies and monitoring programs. The ultimateobjective is to use information on cumulative effects tomake better decisions. Objectives, benchmarks andthresholds provide essential guidance to project propo-nents, decision makers and other interested parties whenasked to take action on the basis of the informationgenerated through cumulative effects assessment andmonitoring. These indicators are also valuable to guidescientific research and monitoring. Cumulative effectsmanagement must focus on issues that make a differ-ence and avoid the trap of attempting to studyeverything. A principal objective of cumulative effectsmanagement in the NWT should therefore be the iden-tification of objectives, benchmarks and thresholdsthat can be used to guide baseline research, monitor-ing and development decisions.

The environmental sensitivity of northern

regions and the distinctive social and cultural

characteristics of the NWT present particular

challenges for cumulative effects management.

43


Recent Proposals and InitiativesCumulative effects management is already a high-profiletopic in the NWT. The GNWT’s Non-renewableResource Strategy includes a proposal to “establish amonitoring regime for both biophysical and socio-economic environments” and notes the need forbaseline data collection, cumulative effects research andcumulative effects monitoring.38 This initiative is intend-ed to:

• enable better coordination of data collection;• identify and fill gaps in regional monitoring and data

collection;• improve understanding of important cause-and-

effect linkages related to development activities; and• facilitate the establishment of regional and site-

specific thresholds and carrying capacities.

The proposed monitoring regime will also contribute tothe timely and consistent review of project proposals.

The Economic Strategy Panel also underlines the“urgent need to develop an overall cumulative impactsmonitoring framework,” given the large number of devel-opment projects that may come on stream in the NWT.39

It notes that current monitoring programs tend to besite-specific and that large gaps exist in baseline environ-mental and traditional knowledge data. The Panelrecommends the collection of baseline data needed forcumulative effects monitoring and states that “the datamust be shared to increase the ability of communitiesand regions to monitor impacts.”40

A number of important initiatives relating to cumu-lative effects are already at the planning or operationalstages in the NWT. The Mackenzie Valley CumulativeImpact Monitoring Program (MVCIMP) has its originsin the Gwich’in and Sahtu land claim agreements and isrequired pursuant to the Mackenzie Valley ResourceManagement Act. This program is in the planning stage,with DIAND coordinating program design in collabora-tion with a working group consisting of federal andterritorial government officials and representatives fromthe Gwich’in, Inuvialuit and Sahtu regions, as well as theDogrib Treaty 11, Deh Cho First Nations, AkaitchoTreaty 8, North Slave Metis Alliance and the South SlaveTribal Council.

Environment Canada is studying and developingregional approaches to cumulative effects assessment andmanagement under its Northern Ecosystem Initiative.The focus is on developing partnerships to assist in thecreation of procedures and protocols that can be used in

the establishment of regional cumulative effects assess-ment and management frameworks throughout theNorth.

There are also a number of more narrowlyfocused initiatives. The West Kitikmeot/Slave Study, dis-cussed below (subsection Continuity for the WestKitikmeot/Slave Study), was established to addressdeficiencies in regional baseline information for the SlaveGeological Province; it focuses on data that can be usedto assess and monitor the cumulative effects of develop-ment. The Independent Environmental MonitoringAgency, established under the BHP EnvironmentalAgreement, is responsible for monitoring environmentalmanagement of effects, including the cumulative effects,of the Ekati diamond mine. The DIAND’s CoppermineRiver Cumulative Effects Water Monitoring Programadopts a transboundary, watershed-based approach toresearch and monitoring. Cumulative effects are also amajor concern in the development of the BathurstCaribou Management Plan.

The most significant initiative in cumulative effectsmanagement is the ongoing process to develop aCumulative Effects Assessment and Management(CEAM) Framework for the NWT. The initial workplan for this initiative was submitted in April 2000.The purpose of the CEAM Framework is to:

…provide a systematic and coordinated approach to theassessment and management of cumulative effects in theNWT, reflecting the needs of various key players, withoutprejudice to land claims activities or existing legislation.41

A steering committee to oversee development of theFramework has been established, with representationfrom the federal and territorial governments, Aboriginalorganizations and governments, industry, environmentalgroups and the Mackenzie Valley Environmental ImpactReview Board. The target date for implementing theCEAM Framework is April 2001.

The details of design and implementation remain tobe worked out. The work plan indicates, however, thatthe CEAM Framework may include six basic compo-nents: vision, values and objectives; project-specificassessments; regional baseline studies and research;monitoring; environmental management strategies andactions; and auditing (including state of the environmentreporting).

This initiative has received some funding from thefederal government for the first year, but long-termfunding has not yet been secured. Additional issues to be


44

addressed include the institutional structure for imple-menting the CEAM Framework and the links withdecision-making processes in the event that cumulativeeffects are detected.

Implementing Cumulative EffectsManagement in the NWT — NRTEE Recommendations

The NRTEE is convinced that an integrated frameworkfor cumulative effects management in the NWT is needednow to ensure the sustainability of Aboriginal communities.The NRTEE’s recommendations in this area are direct-ed to supporting the development and implementationof the CEAM Framework.

Funding for the CEAM FrameworkThe CEAM Framework has the potential to place theNWT on the cutting edge of cumulative effects man-agement in Canada. The challenges facing this initiativeshould not be underestimated, nor should the need forgood will and cooperation on the part of all partici-pants. The NRTEE believes, however, that the CEAMFramework provides the most promising means currentlyavailable to address many of the risks of non-renewableresource development for Aboriginal communities. Inparticular, the NRTEE endorses the multi-stakeholdercomposition of the steering committee established todevelop the CEAM Framework and the clear intentionto create an integrated policy framework for cumulativeeffects management in the NWT.

The NRTEE notes the commitment of the Ministerof Indian Affairs and Northern Development, made on6 December 1999, to “provide the necessary resources

to ensure that the recommendations emerging from theDecember workshop42 are pursued effectively and acumulative effects assessment and management frameworkis developed by April 2001.”43 A backgrounder issued atthe same time as the Minister’s statement confirmed thecommitment of both DIAND and Environment Canadato secure the resources needed to pursue effectively therecommendations emerging from the workshop.

The CEAM Framework work plan of April 2000was a direct outcome of the multi-stakeholder workshopheld in December 1999. Although the work plan requireda total budget of $780,000, the amount provided to theCEAM Working Group to complete the Frameworkwas only $450,000. The NRTEE is concerned that thisfunding shortfall has undermined the efforts of theWorking Group to develop the Framework by the April2001 deadline. The CEAM Working Group has had todrop or curtail many of its planned activities, includingits proposed consultation sessions, in order to ensure thatat least the priority work plan components are addressedby April 2001. According to the CEAM Working Group,the adjustments to the work plan mean the April 2001deadline cannot be met even if the required $300,000arrives during the 2000–2001 fiscal year. Indeed, estimatesprovided to the NRTEE by DIAND indicate that a one-year extension, with a one-time funding allocation of$800,000, is required to complete the CEAM Framework— $450,000 for the Framework and $350,000 for a keymonitoring component of the Framework, the MackenzieValley Cumulative Impact Monitoring Program.

Cumulative effects management requires attention

to the impacts of multiple projects and activities

that may occur within a large geographic area over

an extended period.

45


In the long term, a significant amount of additionalfunding will be required not only to develop and imple-ment an integrated policy framework for cumulativeeffects management in the NWT but also to support themulti-stakeholder process that is essential to the successof this initiative. DIAND estimates that implementation ofthe CEAM Framework alone will cost $2 million per year.Cost estimates for the MVCIMP are discussed below.

The NRTEE believes strongly that cumulativeeffects management provides a significant opportunityfor strategic investment by government and industry.Money invested now will help to secure the informationbase and policy framework necessary to avoid costlymistakes in the development of non-renewable resources.If the cumulative environmental, social and culturaleffects of development can be identified and mitigated,a major threat to the long-term sustainability ofAboriginal communities will have been addressed.

Strategic investment in cumulative effects manage-ment will also contribute directly to regulatory certainty,a key factor in improving the investment climate in theNWT. Support for baseline data collection and monitoringprograms will reduce the costs of project planning andcumulative effects assessment for proponents. Theseinitiatives could also help prevent a proliferation of project-specific agencies and scientific panels to monitorcumulative effects. Finally, the development of a policy andplanning framework for cumulative effects assessmentwill address current uncertainty regarding the role of thisprocess in environmental management and the appropriateallocation of roles and responsibilities between projectproponents and government.

Strategic investment in cumulative effects manage-ment will yield direct benefits to governments, Aboriginalcommunities, industry, environmental organizationsand other key players. Indirect benefits will flow to allnortherners and to Canada as a whole.

Finally, baseline data are the essential raw materialfor cumulative effects management. The most promisingcurrent initiative in this area is the Mackenzie ValleyCumulative Impact Monitoring Program introduced inthe section Recent Proposals and Initiatives. The MVCIMPWorking Group is currently designing a community-based monitoring program, focused initially on theGwich’in and Sahtu Settlement Areas. The program willeventually cover the entire Mackenzie Valley. Whenimplemented, this valley-wide data resource will combineexisting data sources, coordinate monitoring programsand provide feedback to communities. The MVCIMP

will be capable of generating the baseline environmentaldata, analysis and information on traditional knowledgethat is required by project proponents and others withan interest in cumulative effects issues.

The NRTEE believes that the MVCIMP is a vitalcomponent of cumulative effects management in theNWT and that it will make a major contribution to themonitoring component of the CEAM Framework. Thisinitiative also reflects specific commitments made in landclaim agreements and through the Mackenzie ValleyResource Management Act. The NRTEE is concerned,however, that sufficient funding to support this initiativehas not yet been committed. Estimates provided to theNRTEE by DIAND indicate that funding of $3 millionannually is required to expand and implement this program.

In summary, the NRTEE supports the developmentof the CEAM Framework and the closely linked MackenzieValley Cumulative Impact Monitoring Program andbelieves that they are essential to creating an integratedframework for cumulative effects management in theNWT. The NRTEE therefore recommends that:

The Government of Canada should allocate a

total of $25.8 million, over six years, to the

Department of Indian Affairs and Northern

Development and the Department of Environment to

complete the development and implementation of an

integrated policy framework for cumulative effects

management in the NWT. This funding includes:

• a total of $800,000 to enable the NWT

Cumulative Effects Assessment and Management

Working Group to submit a completed and com-

prehensive CEAM Framework and action plan

by the end of the fiscal year 2001–2002 to the min-

isters of Indian Affairs and Northern

Development and Environment; and

• a total of $5 million annually for five years, start-

ing in 2002–2003, to fund the implementation of

the CEAM Framework — including the

Mackenzie Valley Cumulative Impact Monitoring

Program (at a cost of $3 million annually), the

action plans for the North Slave and Deh Cho

regions, and five-year audits (including state of the

environment reporting) — and to meet the needs

of the agencies that have key roles in monitoring

and managing cumulative effects. This funding

level should be reassessed after five years.

11


46

Continuity for the West Kitikmeot/Slave Study The West Kitikmeot/Slave Study (WKSS) was establishedin 1995 as a partnership of Aboriginal and environmentalorganizations, government and industry. Its mandate isto provide baseline information, using both scientificand traditional knowledge, to support resource manage-ment decisions and to evaluate the effects ofdevelopment in the area from Great Slave Lake to theArctic coast. This area includes parts of both the NWTand Nunavut.

The initial funding commitment to the WKSS is setto expire 31 March 2001. The NRTEE Task Force, whilerecognizing that the fate of this organization and itswork is an important issue for cumulative effects man-agement in the NWT, did not reach a consensus onwhether to recommend continued funding for the WKSSas it currently exists and to give it an expanded role in anew framework for managing cumulative effects. Whilesome Task Force members strongly advocated continuationof the WKSS beyond its current term, others expressedconcerns regarding the study’s funding formula. It wasalso noted that the CEAM Framework is much broaderthan the current WKSS mandate and that lessons from theWKSS could be incorporated into the new arrangementfor managing cumulative effects.

The valuable work undertaken by the WKSS, and itssuccess as a partnership, was acknowledged, however, byall Task Force members. The Task Force also agreed onthe importance of continuing key long-term studies,

notably regarding the impacts of resource developmenton caribou. The significance of the caribou to the Northand the need for continued work in this area have beenhighlighted in two sections: Aboriginal Communities inthe NWT — The Environmental, Cultural, Social andPolitical Context; and The Importance of CumulativeEffects Management. Regardless of the final fundingdecision on the WKSS, the long-term studies that itinitiated — such as research on caribou — should becontinued as part of the baseline data collection andmonitoring that are essential for cumulative effectsmanagement. In addition, a review and evaluation of thework undertaken by the WKSS should be undertaken sothat the important lessons learned over the past fiveyears can be applied to future initiatives. The NRTEE

therefore recommends that:

The partners in the West Kitikmeot/Slave

Study (WKSS) should ensure the continuation of

research being undertaken by the WKSS in support

of cumulative effects assessment and monitoring by

providing the necessary funding during the transi-

tion period between the end of the WKSS mandate

(April 2001) and the establishment of a successor

organization or initiative that is able to continue

this research. The successor organization or initia-

tive should be identified through consultations

among the WKSS partners, the CEAM Framework

partners and the Nunavut General Monitoring

Program.

22

47

C h a p t e r F i v eC h a p t e r F i v e

55

The Investment Climate forNon-renewable ResourceDevelopment

49

Aboriginal Communities and Non-renewable Resource Development The Investment Climate for Non-renewable Resource Development

The Importance of a FavourableInvestment Climate

A major challenge for a strategy that relies on non-renewable resource development to promote sustainabilityis to ensure that economic activity in the resource sectorscontinues over the long term. Ongoing exploration isessential to ensure new discoveries. Given the long leadtime for major projects, the current level of explorationwill be a significant determinant of economic opportuni-ties 10 to 25 years from now. Responsible developmentshould also be facilitated, since proven mineral reservesmay remain undeveloped for many years — possiblyindefinitely — if less expensive sources of supply areavailable.

It is true that strong commodity prices and theNWT’s mineral potential have been powerful incentivesfor exploration and development in the diamond and oiland gas sectors in recent years. The fact remains, howev-er, that the North must compete in a global market forthe investment capital required for non-renewableresource development. The NRTEE believes that signifi-cant policy measures can and should be taken to helpensure the continued vitality of the NWT’s non-renew-able resource sectors. The bottom-line consideration isthat, without the willingness of companies to invest inthe NWT, the promise of long-term benefits remainssimply a promise.

Obstacles to Investment in Non-renewable Resource Development

Throughout the NRTEE’s consultations, industry repre-sentatives identified regulatory issues as the mostimportant obstacles to increased investment in the NWT’snon-renewable resource sectors. Industry is frustratedby a continually evolving regulatory regime that makeseach new project a voyage into uncharted waters. Theshort history of diamond mining in the NWT illustratesthis problem. The BHP and Diavik projects were eachsubject to different environmental assessment regimes,and subsequent development proposals will go throughan entirely new process under the Mackenzie ValleyResource Management Act. Added to formal regulatoryprocedures are project-specific impact and benefitsagreements, socio-economic agreements and environ-mental agreements, the requirements for which are notspecified in either law or policy.

Even entering the regulatory process is a dauntingprospect for many developers. Consultation obligationsand procedures remain largely undefined, making itdifficult to be certain who should be consulted and onwhat issues. Potential investors see a multitude of boards,agencies and processes, many of which are relatively newand inexperienced.

T he NRTEE’s Aboriginal Communities and Non-renewable Resource

Development Program was established on the premise that non-renewable resources can make

a positive contribution to the sustainability of Aboriginal communities in the North. This section

of the report presents a series of recommendations to ensure that investment — the lifeblood

of economic activity in this sector — continues to flow into the NWT.

The Investment Climate for Non-renewable Resource Development Aboriginal Communities and Non-renewable Resource Development

50

The NRTEE is convinced that regulatory complexityand uncertainty in the NWT constitute significant threatsto the flow of investment capital into the resource sec-tors. There is an urgent need for the federal government,the GNWT, Aboriginal organizations and governments,industry and other key players to work together toimprove the clarity and certainty of the regulatoryregimes governing non-renewable resource developmentin the NWT.

Regulatory uncertainty is an unwelcome complicationfor project planning and development in the NWT,where development costs are high and two other signifi-cant handicaps hinder the region when competing forinvestment dollars. First, the erosion of geosciencecapacity and mapping has undermined the North’s abilityto generate exploration activity. Second, the lack ofadequate transportation infrastructure leads to tighttime frames (i.e., as a result of a reliance on ice roadsfor ground transportation) and is a pervasive problem innorthern Canada. In both of these areas, obstacles toinvestment in non-renewable resource sectors could beremoved by placing the North on a level playing fieldwith other jurisdictions.

Improving the Climate for Investmentand Economic Development — NRTEE Recommendations

The NRTEE has identified three areas where initiativescould be taken to improve the investment climate fornon-renewable resource development in the North.These initiatives focus on regulatory capacity, supportfor geoscience and geological mapping, and infrastruc-ture funding. In addition, the NRTEE considered insome detail a proposal to alter the tax treatment ofinvestment in northern Canada but did not reach aconsensus on this issue. While the NRTEE is not makinga recommendation in the area of tax policy, the twocompeting points of view are set out below.

Additional Funding for Boards Under the Mackenzie Valley ResourceManagement ActThe NWT is undergoing profound changes thatinevitably produce instability in regulatory regimes.Some of this uncertainty will be addressed through landclaim and self-government agreements. Once agree-ments are signed, however, there is a further period of

transition and uncertainty. New regulatory and resourcemanagement boards must be established and gain prac-tical experience. Implementation of the Mackenzie ValleyResource Management Act (MVRMA) is now in this tran-sitional stage. While this legislation is a major stepforward in creating an integrated regulatory andresource management regime based on land claims inthe Mackenzie Valley, further effort will be required toensure efficiency and predictability in practice.

Inadequate funding for the boards established underthe MVRMA was identified as a significant problem bykey players and researchers throughout the NRTEE’sAboriginal Communities and Non-renewable ResourceDevelopment Program. The principal concern of industryis that overworked and understaffed boards and agencieswill be unable to fulfil their responsibilities in an efficient,effective and timely manner. Without adequate fundingand access to expertise, these new bodies may be over-whelmed by the number, size and complexity ofnon-renewable resource projects in the NWT. Delaysand uncertainty in project planning and approvals willthen be unavoidable.

Underfunding of these boards and agencies is also aconcern for Aboriginal people and environmental organ-izations. The promise of greater involvement in decisionmaking will prove to be a hollow one if the processesestablished to facilitate that involvement are unable tooperate effectively.

Two systemic problems were identified as contributingto the funding difficulties of the new boards. First,funding is administered through DIAND’s land claimsimplementation process, the focus of which is not on theoperational needs of regulatory and resource manage-ment boards. Some key players recommended a separate“A-base” funding arrangement for MVRMA boards.Second, the funding for these boards appears to beinsufficient, particularly given the increases in workloadassociated with major projects.44 In fact, a frequentlyexpressed concern is that the boards require bothenhanced core capacity and additional flexibility to dealwith surges in development activity.

In addition to funding for their internal operations,the MVRMA boards need financial resources to facilitatepublic involvement in their processes. This need is par-ticularly acute for the Mackenzie Valley EnvironmentalImpact Review Board, the entity responsible for environ-mental assessment under the MVRMA. Funding tosupport the involvement of public interest groups,

51


Aboriginal organizations and other groups and individualsin project reviews is a widely accepted principle ofenvironmental assessment in Canada. This type of funding— commonly referred to as intervener funding —reflects the values of public participation and inclusivenessthat underlie environmental assessment processes. Theseprocesses are designed to identify competing values andinterests relating to proposed developments and to subjectproponents’ plans to careful scrutiny. Although govern-ment resource managers and regulators often play arole in these processes, experience shows that themost intense scrutiny of projects often comes fromnon-governmental interveners.

It is well recognized, however, that many individualsand organizations with an interest in proposed projectslack the resources to participate in environmental assess-ment on anything like a level playing field with projectproponents and governments. Obstacles to effectiveparticipation are especially significant when projects raisecomplex technical issues and when other parties to envi-ronmental assessments have access to legal counsel andexpert witnesses. Since participants in environmentalassessment must generally substantiate their concernsthrough direct evidence or by cross-examining propo-nents on their environmental impact statements, asophisticated knowledge of the issues and an ability tomarshal information and arguments effectively arerequired. For many interveners, including Aboriginalcommunities, overcoming these obstacles requires timeand money. All too often, both are in short supply.

Intervener funding is mentioned in some environ-mental assessment legislation. The CanadianEnvironmental Assessment Act, for example, contains anexplicit requirement that “the Minister shall establish aparticipant funding program to facilitate the participationof the public in mediations and assessments by reviewpanels.”45 Intervener funding is available for projectreview processes in some provinces.46

Given these precedents, it is surprising that environ-mental assessment provisions in the MVRMA do notrequire, or even provide for, the establishment of anintervener funding program. The result is that Aboriginalorganizations and other interveners in review processesconducted by the Mackenzie Valley EnvironmentalImpact Review Board must either assemble intervenerfunding from existing government programs, negotiatefunding arrangements with project proponents or bearthe costs of participation themselves.

In practice, interveners may be able to secure some ofthe funding that they need from government programsand other sources. The NRTEE believes, however, thatthe principle of intervener funding should be formallyrecognized in environmental assessment under theMVRMA and that this principle should be given effectthrough a specific funding process.

Once this principle is accepted, a host of otherissues arise. What are the respective obligations of gov-ernment and industry to provide funding? What criteriashould determine eligibility for funding and the alloca-tion of funding among eligible interveners? Whataccountability and control mechanisms should be estab-lished? Should there be an independent panel to reviewdisputes over required levels of funding? These andother issues will have to be addressed during the designof an MVRMA intervener funding program. Clearly, thisdesign process should involve consultations withAboriginal organizations and governments, industry andother interested groups (e.g., environmental public inter-est groups).

Industry is frustrated

by a continually evolving

regulatory regime that

makes each new project

a voyage into uncharted

waters.

52

The NRTEE firmly believes that effective Aboriginalparticipation in environmental assessment is a criticallyimportant means of involving Aboriginal communities indecision making about non-renewable resource develop-ment in northern Canada. Environmental assessmentprocesses should also facilitate intervention by otherinterested parties. Intervener funding in these processes istherefore essential. Given the important values at stake,the NRTEE believes that the current ad hoc approach tofunding interveners under the MVRMA is unacceptable.

The NRTEE specifically investigated the currentfunding levels and projected needs of the MackenzieValley Environmental Impact Review Board, theMackenzie Valley Land and Water Board, and the otherboards established under the MVRMA. Current annualfunding for the Mackenzie Valley Environmental ImpactReview Board is $1.1 million, up from $545,000 in the1999–2000 fiscal year but significantly less than the $1.7million requested by the Board. The Mackenzie ValleyLand and Water Board, which has been operating onlysince April 2000, received $2.1 million for the 2000–2001fiscal year. Funding formulas for the regional land useplanning and land and water boards are found in claimsimplementation documents. Current levels range from$131,000 for the Gwich’in Land Use Planning Boardto $1.6 million for the Sahtu Land and Water Board.The most specific information regarding funding needscame from the Mackenzie Valley Environmental ImpactReview Board. In its submission to the NRTEE, theBoard stated that it has not yet conducted a thorough A-base review of its funding needs and that such a reviewshould be undertaken when time and resources permit.It indicated, however, that additional funding is clearlynecessary for the Board to carry out its regulatoryresponsibilities. The Board’s estimate of $1.7 million peryear for operating costs was made two years ago, beforethe current oil and gas interest in the North and theincreasing demands on the Board related to its procedures.

This amount is, nonetheless, the best existing estimateof the Board’s present and future needs for core fund-ing. The Board also expressed a preference formulti-year funding that is not tied to land claims imple-mentation (which fixes board budgets for a 10-yearperiod).

The NRTEE also examined the requirements for anintervener funding program. In particular, it consultedwith staff of the Mackenzie Valley EnvironmentalImpact Review Board to determine the costs associatedwith public interventions in environmental assessmentand regulatory processes in the North. Estimates providedby Board staff indicated that small-scale projects mayrequire up to $100,000 in intervener funding, whilelarge-scale projects (e.g., the recently completed compre-hensive study for Diavik Diamond Mines Inc.) mayrequire at least $800,000 in intervener funding. On thebasis of these estimates, the NRTEE has concludedthat an annual allocation of $500,000 would provide areasonable basis for the required intervener fundingprogram. This figure was reviewed by members of theMackenzie Valley Environmental Impact Review Boardand deemed to be a good estimate at this time.

Ensuring adequate funding to implement theMVRMA is essential if the federal government is to liveup to the commitments — embodied in land claimagreements and legislation — that it has made toAboriginal people and to all Canadians. Expenditures inthis area will promote good resource management,reducing the risk of costly mistakes and unnecessaryconflict. Increased funding for these bodies will alsoimprove the climate for investment in the NWT by help-

Funding to support the involvement of public

interest groups, Aboriginal organizations and

other groups and individuals in project reviews

is a widely accepted principle of environmental

assessment in Canada.

53


ing to ensure that project review and regulatory process-es can operate in an efficient, effective and timelymanner. Furthermore, a portion of the additional fund-ing could be used to support an initiative aimed atcoordinating and streamlining regulatory processes in theNWT, notably through greater cooperation amongMVRMA boards and between MVRMA processes andother regulatory regimes. Providing adequate resources tothe MVRMA boards is thus a tangible measure that canbe implemented immediately to address the pervasiveconcerns regarding regulatory certainty and efficiency inthe NWT. The NRTEE strongly believes that DIANDshould review the funding levels for all the boards underthe MVRMA for the reasons outlined above.

While recognizing the need for a review of thecurrent funding arrangements and levels for the MVRMAboards, the NRTEE is hesitant to present specificrecommendations for the other boards without furtherresearch regarding their future funding needs. In addition,it was decided it would be premature for the NRTEE torecommend additional funding for the Mackenzie ValleyLand and Water Board, since that board has only been inexistence since April 2000.

The NRTEE believes, however, that the needs ofthe Mackenzie Valley Environmental Impact ReviewBoard are sufficiently clear and pressing at the presenttime to justify a specific recommendation. Increases inthe Board’s core budget and the establishment of an inter-vener funding program are both required. Furthermore,a legislative basis for intervener funding is desirable.The NRTEE therefore recommends that:

The Government of Canada should allocate at

least $2.2 million per year (including $500,000

per year for intervener funding) to enable the

Department of Indian Affairs and Northern

Development to provide the Mackenzie Valley

Environmental Impact Review Board with a

secure, multi-year funding commitment that will

ensure that the Board can effectively carry out its

mandate and can provide intervener funding dur-

ing environmental assessments and environmental

impact reviews. This funding level should be

reassessed after five years.

The Mackenzie Valley Resource Management

Act should be amended to include a specific require-

ment for intervener funding.

Enhancing Northern Capacity inGeoscience and Geological MappingInitiatives to improve geoscience and geological mappingwere recommended by Task Force members and key play-ers in the NRTEE process. The need for increasedinvestment in these areas across Canada has been high-lighted by a special task force appointed by theIntergovernmental Working Group (IGWG) on theMineral Industry47 and by the Prospectors andDevelopers Association of Canada.48 Both groups arguethat there is a direct relationship between governmentgeoscience, mineral exploration investment and the dis-covery of economically viable mineral deposits. Theyalso note the continued erosion of funding for govern-ment geoscience in Canada, with the result that largeareas of the country are insufficiently mapped andCanada is losing its competitive edge as a place to investin mineral exploration. Finally, restructuring of the min-eral exploration industry has meant that the majority ofearly stage grassroots exploration is now being done byjunior companies that rely on publicly accessible geo-science databases.

In the NWT, the need for investment in geoscienceand mapping is widely recognized. The report of the JointAboriginal-Industry Resource Development Workshopobserved that “geological mapping is the single mostcost-effective incentive that government can provide toencourage mineral industry activity.”49 A current andaccessible geoscience database is vital for grassrootsexploration, the value of which has once again beendemonstrated by the discovery of diamonds in the NWT.The Economic Strategy Panel concluded that better geo-science and mapping is needed to attract continuedinvestment and that “the potential payback from thisactivity is huge.”50

In addition to their direct benefits to industry, geo-science research and mapping also provide valuableinformation to land use planning processes and protectedareas strategies. Identification of areas of high and lowmineral potential assists all parties in reaching agreementon broader land use issues. The immediate result will bea more sensitive balancing of economic, cultural andecological considerations in land use decisions. Facilitatingthese land use processes will, in turn, produce greatercertainty regarding access to the land base for explorationand development. The use of geoscience data and mappingin land use planning processes will therefore contributeto improving the investment climate for the non-renewableresource industries in the NWT.

33

44


54

Despite the compelling arguments for public invest-ment in geoscience and mapping, northern capacity inthese areas has been significantly reduced in recent years.Funding to the Geological Survey of Canada has beencut and its Yellowknife office closed. Completion of thelast Canada-NWT Economic Development Agreementhas also removed a source of support. Analysis present-ed in the report of the Joint Aboriginal-IndustryResource Development Workshop indicates that theNWT has received geoscience funding far below thatallocated to comparable jurisdictions. For example,under the 1987–1991 Canada-NWT mineral develop-ment agreement, the NWT — including what is nowNunavut — received only 5% of national geosciencefunding despite occupying approximately one-third ofthe land mass of Canada.51

The results are plain to see. According to thereport of the Joint Aboriginal-Industry ResourceDevelopment Workshop:

The evaluation of the 1991–1996 Canada-NWTMDA [mineral development agreement] indicated thatonly 40% of the NWT [and Nunavut] was covered bygeological mapping at the scale of 1:250,000 (commonlyused by industry to set broad exploration targets) and lessthan 1% is mapped at 1:50,000 (commonly used byindustry to investigate particular locations within thebroad target areas). As a comparison, in 1990, theprovinces had on average 80% coverage at 1:250,000and 35% coverage at 1:50,000. It is apparent, therefore,that even with MDA funding government expenditures ongeoscience in the NWT have been less than that under-taken in other jurisdictions in Canada.52

At the same time, the NWT is ranked by industry as oneof the top jurisdictions in Canada for mineral potential.53

Several proposals have recently been made toenhance geoscience and mapping in the North andthroughout Canada. The task force appointed by theIntergovernmental Working Group on the MineralIndustry issued a report in 1999 recommending a budgetof $49.9 million over 10 years for geological mapping inthe NWT.54 This proposal was endorsed by theProspectors and Developers Association of Canada inrecent submissions to energy and mines ministers.55

Further support for geoscience and mapping is found ina brief submitted by the National Geological SurveysCommittee to the Mines Ministers’ Conference held in

Toronto in September 2000.56 This document calls for acooperative geological mapping strategy in each provinceand territory of Canada.

The NRTEE consulted with representatives of theGeological Survey of Canada, DIAND and the C.S.Lord Northern Geoscience Centre, an institute inYellowknife that is jointly operated by DIAND and theGNWT, with the Geological Survey of Canada havingan advisory role. In a joint submission to the NRTEE,these departments support the recommendations of theIGWG report (i.e., $49.9 million over 10 years) but notethat this amount is for bedrock mapping alone — theIGWG report estimated that a further $24 million wouldbe required over the next 20 years to produce basinatlases to support hydrocarbon exploration in theBeaufort and northern mainland sedimentary basins. Thedepartments also note that the cost of completing air-borne magnetic coverage was estimated in the GNWT’sNon-renewable Resource Strategy to be $20 million. Thecost of achieving even this basic level of geoscience mapcoverage would be about $94 million. According to thejoint submission, this total does not include other sur-veys and research that would be desirable such assurficial mapping, mineral deposit studies and resourceassessments. The annual funding requirement would thendepend on the target time period for achieving the desiredlevel of coverage. The IGWG report used a 10-yeartime frame, which would suggest a basic requirement ofalmost $10 million per year. Currently, expenditure lev-els by the C.S. Lord Northern Geoscience Centre andthe Geological Survey of Canada are in the range of $1million to $2 million annually.

The NRTEE strongly supports increased geoscienceactivity and geological mapping in the NWT andthroughout northern Canada. Strategic investment in thisarea will stimulate exploration and facilitate land useplanning, both of which will yield important long-termbenefits for Aboriginal communities and all northerners.While the Aboriginal Communities and Non-renewableResource Development Program has focused particularlyon the NWT’s needs in this area, the NRTEE fullyexpects that increases in funding for geoscience andgeological mapping could also be justified in theYukon and Nunavut. For the NWT, the NRTEE rec-ommends that:

55


The Government of Canada should commit

$10 million per year, for 10 years, to the

Department of Natural Resources (Geological

Survey of Canada) and the Department of Indian

Affairs and Northern Development (for allocation

to the C.S. Lord Northern Geoscience Centre) to cre-

ate a modern, integrated and accessible geoscience

database for the NWT.

A New Funding Formula forInfrastructure DevelopmentLack of adequate infrastructure is an important obstacleto economic development in the NWT and throughoutnorthern Canada. The costs of moving people, equip-ment and commodities are high, seasonal restrictionssometimes apply — as in the case of ice roads — anddistances within the NWT and between the NWT andsouthern markets are significant. Poor infrastructureputs the NWT at a disadvantage when compared withother jurisdictions in many sectors, including tourism,manufacturing and non-renewable resource development.

The infrastructure requirements for non-renewableresource development vary among commodities.Research conducted for the NRTEE indicates that project-specific infrastructure needs for the development ofhigh-value, low-volume commodities such as diamondsand gold are relatively modest. A winter road for bulksupplies and an airstrip to move people and product are

all that is required in many cases. In fact, concerns withsecurity are such that the lack of access by an all-seasonroad may be an advantage for gold and diamond mines.

For base metal production, a more extensive infra-structure is essential. Typically, all-season roads andaccess to tide water are necessary for these mines to beprofitable. A number of significant base metal depositsin Canada’s North are uneconomic to develop without asignificant expenditure on transportation infrastructure.Given current metal prices, however, some depositsmight remain uneconomic even if infrastructure needswere met through public investment.

Infrastructure requirements for the oil and gasindustry consist primarily of access roads to well sitesand pipeline transportation to southern markets. Theestablishment of transportation corridors is one meansof promoting the development of these resources. Theissues surrounding the possible construction of one ormore major pipelines connecting Arctic gas with southernmarkets are of enormous significance for both theNWT and the Yukon.

Finally, it should be underlined that all these industries— regardless of their project-specific needs — rely onthe North’s general transportation infrastructure to movesupplies and people. If that infrastructure is inadequate,the costs to industry of doing business increase andproblems of congestion and public safety may arise. Anumber of NRTEE Task Force members and other keyplayers expressed concerns regarding the overall condition

Infrastructure funding will play a critical role in

levelling the playing field as the North competes

with other jurisdictions for investment dollars.

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56

of highways in the NWT. Issues of public safety andconvenience are clearly at the forefront of many people’sminds. The NRTEE views these concerns as directlyrelevant to the NWT’s overall climate for investment inthe non-renewable resource sectors, as well as beingimportant for quality of life.

Two broader issues should also be kept in mindwhen considering investment in northern transportationinfrastructure. First, Canada has a strategic interest inbetter connecting its vast northern territories with therest of the country and in underlining its sovereignty inthis region through a physical presence that can only beachieved with adequate infrastructure. Second, theNorth’s needs for infrastructure investment may wellincrease significantly due to the effects of climatechange, some of which are already evident. In particular,winter roads built on snow and ice and summer roadsbuilt on permafrost may all be negatively affected byglobal warming. The need for investment in northerninfrastructure in the future is therefore likely to reflectconsiderations that go beyond the needs of the non-renewable resource sectors and current concerns withpublic safety and convenience.

Frustration with infrastructure funding in northernCanada focuses on two issues. The first is the per capitabasis used to allocate money. Given its small populationand large infrastructure needs, the North’s share of over-all infrastructure funding is viewed as inadequate bymany residents. The second issue is the potential forinfrastructure spending as a strategic investment.Significant expenditures in this area may yield even larg-er financial returns if the result is to make majornon-renewable resource development possible.Infrastructure funding programs, it is argued, typicallyfail to consider the potential returns from investments inthis area.

Specific proposals for infrastructure developmenthave been tabled in recent reports. The GNWT’s Non-renewable Resource Strategy proposes significantstrategic investments in two northern transportation cor-ridors: a Mackenzie Valley road corridor from Wrigley tothe Dempster Highway and the Arctic Ocean, and aSlave Geological Province road corridor fromYellowknife to the Nunavut border.57 The rehabilitationand upgrading of existing highways is also recommend-ed. The report of the Joint Aboriginal-Industry ResourceDevelopment Workshop also proposes significant infra-structure development in the NWT and Nunavut.58 Aswell, infrastructure needs are addressed by the Economic

Strategy Panel, which proposes overall upgrading ofhighways and the development of a Mackenzie trans-portation corridor that includes pipeline development.59

The NRTEE recognizes the overall need to furtherdevelop infrastructure in the NWT and the specific ben-efits that certain infrastructure projects would have fornon-renewable resource sectors. The NRTEE is not,however, in a position to endorse specific projects orpropose particular levels of expenditure. These decisionsshould be made by the federal government and theGNWT, possibly acting jointly through a bilateral agree-ment or framework that would formalize a cooperativeapproach to identifying infrastructure priorities andallocating funding.

Furthermore, the NRTEE is well aware that infra-structure projects may be controversial. Extendingall-season roads and pipeline corridors to previouslyremote areas of the NWT will inevitably have environ-mental risks and implications for Aboriginal communities.All key players agree that major infrastructure projectsmust be subject to strict review and regulation to mini-mize negative environmental and social impacts. TheNRTEE’s support for infrastructure spending is contingenton proper planning and environmental controls.

While the details of infrastructure spending are forothers to determine, the NRTEE has identified a systemicobstacle to infrastructure development in northernCanada that can be addressed through a specific change inpolicy. The combination of per capita funding formulasand the North’s small population has resulted in chronicunderfunding of northern infrastructure. The time hascome to correct this situation. Infrastructure funding willplay a critical role in levelling the playing field as theNorth competes with other jurisdictions for investmentdollars. Given the importance of this issue, the NRTEErecommends that:

In recognition of the fact that strategic invest-

ment in northern infrastructure benefits not

only northerners, but also all Canadians, the

Government of Canada should not use a per capita

allocation formula as the basis for infrastructure fund-

ing to address the urgent needs of the North.

Specifically, the NRTEE recommends that the

Government of Canada set aside a block of funding

for use as a minimum threshold allocation and then

divide the remaining infrastructure funding on some

other basis, such as a per capita allocation formula.

66

57


A Northern Investment Tax Credit —Differing Views Among Key PlayersPossible changes in tax policy to improve the fiscal cli-mate for investment in the North were the subject ofNRTEE Task Force discussions, commissionedresearch60 and consultations with key players. Oneobjective was to identify any opportunities to level theplaying field for non-renewable resource developmentin the North. The potential for fiscal and tax measuresto increase overall investment in the North, thereby yield-ing economic benefits for northerners in general andAboriginal communities in particular, was also explored.

In terms of the level playing field, there is broadagreement that the royalty regimes for mining and for oiland gas in the North are competitive with those insouthern Canada. In fact, it was noted that these regimeshave been specifically designed to reflect the increasedcost and risks of undertaking exploration and develop-ment in “frontier” areas characterized by harsh weatherconditions, limited infrastructure and long distancesfrom major markets. Mining in the North also benefitsfrom the same provisions for accelerated capital costallowances that apply to mines in southern Canada. Oiland gas development in the North, however, receivesless favourable income tax treatment than large oil sandsprojects in Alberta and offshore projects in AtlanticCanada. Oil sands operations benefit from the sameaccelerated capital cost allowances as the mining industry,while companies active on the Atlantic offshore receivethe Atlantic Investment Tax Credit (AITC) on theirinvestments. With major oil and gas projects now underconsideration for the NWT, an argument can be madethat the playing field should be levelled in this area oftax policy.

The NRTEE’s research and consultations identifieda Northern Investment Tax Credit (NITC), similar to the25-year-old AITC, as the most promising option forimproving the investment climate through changes in taxpolicy. An NITC would mean that a fixed percentage ofa corporation’s investment in the North could be used toreduce its income tax liability. For example, a 15% NITCwould allow corporations to deduct $15 from their fed-eral taxes for every $100 investment in the North. AnNITC would level the playing field for northern oil andgas projects and would provide a longer-term regionalincentive to attract investment to all sectors of thenorthern economy.

The proposal for an NITC elicited strong support insome quarters and equally strong opposition in others. Inaddition, some participants in the NRTEE process simplyfelt that they lacked the information required to fullyassess this proposal and that, while it may have merits inprinciple, the timing was not optimal for an initiative ofthis type. As a result, the NRTEE decided not to recom-mend the creation of an NITC. The rest of this sectionsets out the current state of the debate on this issue asrevealed through the NRTEE’s commissioned research,stakeholder consultations and discussions among TaskForce members and the NRTEE as a whole.

The argument in favour of an NITC is based in parton the precedent established by the long-standing AITC.As Canada’s most underdeveloped region, the Northhas at least as strong a claim as Atlantic Canada tofavourable tax treatment for private sector investment.An NITC, it was argued, would encourage much-neededinvestment by offsetting, to some extent, the high costsof doing business in the northern territories. Evenwhere projects are likely to proceed without tax incen-tives, advocates of an NITC saw it as a means ofaccelerating investment decisions. With the current highprices for oil and gas, they argued, it is easy to underesti-

The limited capacity of Aboriginal

communities to capture the benefits

from non-renewable resource develop-

ment suggests that an increase in the

pace of development might simply result

in more benefits escaping the North.


58

mate the level of uncertainty that still surrounds thedevelopment of northern resources. An NITC wouldprovide added incentives for companies to make firminvestment commitments in northern Canada.

While applicable to all private sector investment, anNITC would have particular benefits for non-renewableresource development. In addition to levelling the play-ing field for oil and gas projects, an NITC would reducethe tolls on northern pipelines. The result would be toincrease the netback price61 at gas fields, significantlyreducing the risks of development while increasing theroyalties payable by gas producers. The decrease in over-all risk would benefit private companies by reducingfinancing costs.

Aboriginal communities would benefit from anNITC in several ways. Royalties payable to Aboriginalowners of subsurface resources would increase. AnNITC would have the long-term effect of increasing thevalue of all Aboriginal subsurface oil and gas rights andwould also tend to increase the value of Aboriginal sub-surface mineral rights. Aboriginal business developmentcorporations would benefit from an NITC when makinginvestments in the North. Finally, the contribution of anNITC to overall economic activity would generatespinoffs for Aboriginal people and other northerners.

Against these arguments in favour of an NITC, theNRTEE heard strong competing views from those whoopposed this proposal. Six principal concerns were raised.

First, it was argued that the AITC has not beenparticularly successful in Atlantic Canada and it is there-fore questionable whether a similar mechanism should beimplemented in the North. In particular, the argumentwas made that regional development strategies based oncomparative economic advantage, such as the lead roleplayed by non-renewable resources in the North, mustachieve three principal objectives. First, they must maxi-mize the multiplier effect of initial investment by, forexample, encouraging value-added manufacturing andcreating incentives for the development of a local suppliernetwork for the primary economic activity. Second, theymust entrench technology associated with large-scaledevelopment in the region, so that a comparative economicadvantage persists through cyclical downturns that mayaffect the lead sector. Finally, the human capital (i.e., askilled and experienced labour force) that is generatedthrough the lead sector must be embedded in localcommunities and in the regional economy so that it willremain behind if the lead sector declines. Based on the

AITC experience, questions were raised as to whether anNITC would further these three objectives in the North.It was suggested that, at the very least, additionalresearch and consideration of a broader package of policyinstruments is desirable before implementing an NITC.

A second concern related to an NITC’s contributionto levelling the playing field for oil and gas operations inthe North. It was argued that while an NITC wouldequalize the tax treatment of northern, offshore and oilsands projects, the broader result would be to furtherentrench within the Canadian tax system the preferentialtreatment of non-renewable energy development whencompared with renewable energy and other economicactivities. An NITC that would effectively establish pref-erential tax treatment for oil and gas operations in theNorth is inconsistent with the NRTEE’s broader viewthat implicit and explicit subsidies of this type should beeliminated throughout the tax system.62 To the extentthat tax incentives for non-renewable energy constitute“perverse incentives” from a broader environmental policyperspective, the argument can be made that the playingfield for northern development should be levelled byremoving the tax advantages enjoyed by oil sands andoffshore operators, not conferring these same advan-tages on projects in the North.

It should be noted here that the proposed NITCwould apply to all investment in the North, not simplyto investments in the oil and gas sector. As such, theNITC would not be a narrowly focused tax expendituredirected specifically at the non-renewable energy sector.The argument was made, however, that the benefits ofthis measure would, in practice, flow overwhelmingly tothe non-renewable resource sectors, given the large mag-nitude of expected investment in this area when comparedwith the likely investments in renewable energy andother sectors (e.g., small businesses) in the North.

A third concern regarding the proposed NITC waswhether it would actually achieve the intended objectivesof stimulating new investment and increasing the paceof investment, which will probably occur in any case. Itwas argued that the most likely investments in theNWT’s non-renewable resources will flow — with orwithout an NITC — into diamond mining and the oiland gas sector. The major players in these areas are largeand profitable corporations, and the current marketconditions for these commodities are such that taxincentives to encourage investment may be difficult tojustify. In short, the argument was made that major

59


investment in these areas will occur even withoutfavourable tax treatment. Under this scenario, the prin-cipal effects of an NITC would be a windfall forcorporations, triggered by investments that they will makein any case, and a decrease in tax revenue available forother uses. It was also noted that the major resourcedevelopers in the North have not been lobbying aggres-sively for improved tax treatment and that the existingfavourable royalty regime already offsets, at least tosome degree, the higher costs of doing business in theNorth when compared with other jurisdictions.

Fourth, the suggestion that an NITC would stimulatethe pace, if not the final amount, of investment was ofconcern to some people. From social, cultural andeconomic perspectives, the NRTEE heard repeatedlythat Aboriginal communities are already having difficultycoping with the current rate of non-renewable resourcedevelopment. Aboriginal leaders face a growing list ofissues to address and processes in which they are expectedto participate. The limited capacity of Aboriginal com-munities to capture the benefits from non-renewableresource development suggests that an increase in thepace of development might simply result in more benefitsescaping the North. It was asked, for example, whethermore rapid development would simply require importingmore southern workers, while imposing additional strainson Aboriginal communities. Furthermore, the mecha-nisms that are essential to address the ecological impactsof increasingly intense non-renewable resource develop-ment are still being established in the North. Additionalstimulus to development would increase the pressures onthese new institutions and processes as they attempt toensure the sustainability of northern ecosystems. For thesereasons, an NITC that actually succeeded in increasingthe current pace of non-renewable resource developmentin the NWT might well produce unintended effects thatare inconsistent with the overall objectives of theNRTEE’s Aboriginal Communities and Non-renewableResource Development Program.

A fifth and related argument against an NITC is thatit may not be the best means of achieving the overallgoal of promoting the long-term sustainability ofAboriginal communities. It was noted, for example, thatan NITC might not promote economic diversification sincethe resulting tax benefits would generally have little or noimmediate value for local small businesses, entrepreneursand people engaged in more traditional, land-basedeconomic activities. Opponents of an NITC also ques-

tioned whether the “trickle down”effect for Aboriginal communities wouldbe sufficiently large to justify the forgone taxrevenue. On this issue, one suggestion was that the crite-ria for determining what investment qualifies for NITCtreatment could include performance measures linkeddirectly to Aboriginal benefits. For example, investmentmight only qualify if it could be demonstrated to have con-tributed to Aboriginal employment or businessopportunities. The option of linking an NITC to northernbenefits requirements was not, however, examined indetail by the NRTEE’s Aboriginal Communities andNon-renewable Resource Development Program.

Finally, the timing for an NITC was the subject ofdebate. Even among some people who felt that the ideamight well have merit, there was a sense that deferringthis initiative for at least a few years might be desirable.A “wait and see” approach would have three principaladvantages. First, it may be easier in a few years to makea more informed judgment on the likely effects of anNITC on long-term industry behaviour. If the currentrate of investment in the NWT’s non-renewable resourcesectors is a “bubble,” tax incentives may be justified overthe longer term. However, the possibility also exists thatmarket forces will continue to fuel investment and create acritical mass of economic development in the Northwithout any stimulus from the tax system. Second, meas-ures designed to increase the pace of development mayyield greater potential benefits and produce smaller risksin a few years from now, once Aboriginal capacity has

Aboriginal leaders face a

growing list of issues to

address and processes in

which they are expected

to participate.


60

increased and improved tools for environmental man-agement are in place. Third, additional work appearsnecessary to analyse variations on the NITC model, toexplore the likely positive and negative effects of such a taxexpenditure, and to examine complementary initiativesthat could form part of a broader package of incentives.The NRTEE notes that a comprehensive assessment ofthe AITC proposal was beyond the mandate of theAboriginal Communities and Non-renewable ResourceDevelopment Program and that the research and consul-tations undertaken through that program yieldedinconsistent estimates of the direct cost of an NITC tothe federal treasury.

The debate over the NITC proposal yielded a numberof competing arguments and perspectives and revealedclearly the complexity of using the tax system to promotethe vision of sustainable Aboriginal communities thatguided the NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program. The state ofthe debate on this issue is such that the NRTEE is notmaking a recommendation for or against an NITC. TheNRTEE believes, however, that the research and dis-cussion that it has generated will contribute to theongoing examination of this policy proposal in othervenues.

61

C h a p t e r S i xC h a p t e r S i x

66

Capacity Building

63

Aboriginal Communities and Non-renewable Resource Development Capacity Building

The Importance of IncreasedAboriginal CapacityNo single definition captures all aspects of capacity.NRTEE Task Force members defined capacity as “theability to undertake development for the communityand participate meaningfully” and “the ability to partici-pate in decisions, to compete for business and economicspinoffs, and to administer.” More generally, capacitywithin Aboriginal communities is “the ability to shape,control, and take responsibility — it is about communitywellness.”63

The capacity of Aboriginal communities depends onthe physical, intellectual, emotional and spiritual well-beingof individuals and on the strength of the social andcultural fabric that sustains families and communities.Aboriginal capacity is undermined by such problems assubstance abuse, gambling, family breakdown anddomestic violence that are common in some communities.The objective of capacity building can therefore beexpanded to include measures to address the full range ofsocial, cultural and economic challenges facing Aboriginalpeople, their families and their communities.

The NRTEE fully recognizes the importance of aholistic perspective on capacity building in Aboriginalcommunities. The NRTEE’s Aboriginal Communitiesand Non-renewable Resource Development Programcould not, however, develop recommendations toaddress the full range of issues encompassed by such abroad perspective. Its focus is therefore somewhat narrow-er. The objective here is to identify measures for capacitybuilding that are connected to opportunities and chal-lenges presented by non-renewable resourcedevelopment. While acknowledging the broader context,

the NRTEE’s specific focus is on maximizing benefitsfrom non-renewable resources as a means of achievingsustainable Aboriginal communities.

Aboriginal communities require capacity in manyareas in order to build a sustainable future based on non-renewable resource development. The problem issquarely identified in the GNWT’s Non-renewableResource Strategy:

The NWT Aboriginal population has levels of educa-tional achievement significantly lower than nationalaverages. Resource development jobs won’t help to addressthe high unemployment rates in our Aboriginal communi-ties if residents aren’t equipped to take advantage of theopportunities.64

Building Aboriginal capacity begins with improve-ments in basic literacy for all age groups. Aboriginal youthmust stay in school longer at the elementary, secondaryand post-secondary levels. Quality education, along withrigorous and consistent academic standards, is needed toensure that high-school diplomas earned by Aboriginalpeople in the North are equal in value to diplomas fromsouthern Canada. The NRTEE believes strongly that thesustainability of Aboriginal communities in northernCanada, and indeed throughout the country, depends onincreased support for literacy and education with thegoal of ensuring that, over the next 25 years, Aboriginalpeople achieve levels of education that are at leastequivalent to those of non-Aboriginal people.

Aboriginal people also need skills training andapprenticeship programs in order to benefit from many ofthe opportunities offered by the non-renewable resourcesectors. Administrative, management and entrepreneurial

C apacity building is the most important challenge facing Aboriginal

communities in the North. The NRTEE’s consultations and Task Force discussions consistently

identified a lack of Aboriginal capacity as the principal impediment to maximizing benefits

from non-renewable resource development. The NRTEE is therefore proposing five key initiatives

in this area to promote sustainable Aboriginal communities.

Capacity Building Aboriginal Communities and Non-renewable Resource Development

64

skills are essential to economic self-sufficiency, politicalself-determination and the ability to manage bothopportunities and risks associated with resourcedevelopment. Life skills in areas such as money manage-ment, career planning and cross-cultural communicationare also required as Aboriginal people make the transitionto the wage economy. Finally, the transferability anddiversification of skills are important to ensuring long-term community capacity, particularly since individualprojects have finite lifespans and non-renewable resourcesectors are subject to boom-and-bust cycles.

Obstacles to Capacity BuildingThe NRTEE’s research and consultations identifiedsix principal obstacles to building the capacity ofAboriginal communities in the NWT. In many cases,these problems have also been highlighted in otherrecent reports and studies.

The first problem is inadequate coordination amongprograms and initiatives. A complex and fragmentedapproach to capacity building increases the likelihood ofboth duplication and gaps in coverage. Residents ofAboriginal communities and other northerners also facegreater obstacles in identifying the programs and fundingthat they need. The Economic Strategy Panel describedthe problem as follows:

Human Resources Development Canada, GNWTDepartment of Education, Culture and Employment,DIAND, Arctic College, NWT CommunityMobilization and aboriginal governments are all involvedwith training in the NWT. Yet we have a severe shortageof tradespeople and other skilled employees. Multipleagencies make it more difficult for potential trainees tofind appropriate programs, and agencies are more prone toduplicate programming or fund the same trainees.65

Education, training and other aspects of capacity buildingcould be improved by a territory-wide strategy thatestablishes broad objectives, capitalizes on economies ofscale and avoids duplication.

A second and related problem is the lack of focuson opportunities offered by non-renewable resourcedevelopment. The report of the Joint Aboriginal-Industry Resource Development Workshop called forimproved leadership and coordination to ensure thateducation and training initiatives respond to the needs ofindustry now and in the future.66 All too often, training

is undertaken without a clear idea of available job oppor-tunities. The result is a waste of training dollars andfrustration on the part of trainees whose employmentexpectations are not realized. To address this problem,training programs should place greater emphasis onpreparing people for specific jobs in non-renewableresource industries and facilitating their transition fromtrainee to employee.

Third, capacity-building initiatives frequently fail toadequately address the needs and circumstances of indi-viduals living in Aboriginal communities. Programs thatdo not take into account the cultural context, prioritiesand information needs of communities will not succeed.The drop-out rate increases when Aboriginal people areforced to relocate from their communities in order toreceive education and training. While all programs cannotbe delivered in each community, greater sensitivity tocommunity needs is a key to successful capacity buildingin the North.

Fourth, inadequate funding is identified by some keyplayers as an important obstacle to capacity building.The capacity of Aboriginal communities today is clearlyinsufficient to take full advantage of the opportunitiesthat will be available over the next 10 to 25 years in thenon-renewable resource sectors. Closing this gap willcost money. Given current levels of activity and projec-tions of significant growth in diamond mining and theoil and gas sector, increased investment in capacity isurgently required to prepare Aboriginal communities fordevelopment now and in the future.

Fifth, the value of formal education and trainingremains underappreciated in many Aboriginal communi-ties and among some Aboriginal leaders. These attitudesare understandable given the importance of land-basedactivities and knowledge in traditional Aboriginal society,the negative experiences of many Aboriginal people withthe non-Aboriginal educational system, and the fact thata direct link between formal education and employmentopportunities has not been obvious to many Aboriginalpeople. Nonetheless, capacity-building initiatives are notlikely to succeed to their full potential without wide-spread recognition of the value of education andtraining within Aboriginal communities.

Finally, a large proportion of the adult Aboriginalpopulation lacks the basic literacy and education to com-pete effectively in the wage economy, even for entry-levelpositions. Without attention to these fundamentals, expen-ditures on more elaborate capacity-building initiatives may

65


not achieve the intended result of significantly increasingAboriginal participation in the workforce.

Requirements for Successful Capacity Building

The NRTEE’s consultations produced a range of valuablesuggestions for building the capacity of Aboriginalcommunities in the North. These elements should beaddressed in any new initiatives in this area.

Provide Human Resource Inventories and Needs AssessmentsA more proactive approach is required to anticipateneeds and develop the capacity to meet them. As notedby the Economic Strategy Panel, the skills required forthe major development projects on the horizon can bepredicted with reasonable certainty and training programscould be designed accordingly.67 The key is to matchavailable human resources with opportunities providedby non-renewable resource development over the next10 to 25 years. Territorial and regional humanresource inventories and needs assessments wouldprovide the information required for this type offocused capacity-building strategy.

Define Roles and ResponsibilitiesTwo of the key obstacles to capacity building are thelack of coordination among agencies and programs andthe insufficient focus on non-renewable resource devel-opment. Both issues could be addressed by settingpriorities for capacity building, consolidating programsand initiatives, and allocating funds more strategically.Part of this process would be a clearer definition of theroles and responsibilities of governments, industry,educational institutions and Aboriginal organizations.Better role definition is essential to an effective andstreamlined capacity-building strategy. Specifying therespective obligations of government, industry andAboriginal organizations will also improve regulatorycertainty, particularly in relation to statutory benefitsrequirements and the negotiation of impact and benefits,as well as socio-economic, agreements.

Ensure Timely Capacity-BuildingInitiativesThe funding required for capacity building sometimesarrives too late to allow Aboriginal communities toprepare for the challenges and opportunities created bynon-renewable resource development. Capacity isrequired for communities to participate effectively in thedecision-making processes that are triggered by projectproposals. Funding and expertise are necessary both inthe project review and regulatory processes and in thenegotiation of project-specific arrangements such asimpact and benefits agreements.

Aboriginal communities also require significantadvance preparation if they are to benefit from theemployment and business opportunities created byresource projects. All too often, however, time andmoney are inadequate. Particularly when training pro-grams are provided through financial or in-kindsupport from resource developers, funding and trainingpositions may not become available until projects are upand running. Residents of Aboriginal communities maytherefore find themselves at an immediate disadvantagewhen competing for jobs and contracts at the constructionphase and the start-up of operations. While this

While acknowledging the broader context,

the NRTEE’s specific focus is on maximizing

benefits from non-renewable resources as a

means of achieving sustainable Aboriginal

communities.


66

competitive disadvantage may diminish over time, theinability to maximize employment and business opportu-nities at the outset is a lost opportunity. A proactivecapacity-building strategy could correct this problem tosome degree by providing funding and access to trainingprograms as far as possible in advance of non-renewableresource projects.

Provide Community-based Education and TrainingThe importance of community-based education andtraining was emphasized throughout the AboriginalCommunities and Non-renewable Resource DevelopmentProgram in stakeholder submissions, Task Force discus-sions and commissioned research. Five key pointsemerged.

First, there is a need for greater community empow-erment in capacity building. Community-based initiativesand accountability should be promoted by making fund-ing, expertise and templates for successful programs andreporting mechanisms available at the community level.Communication, coordination and partnerships amongorganizations within communities and at regional and terri-torial levels should also be encouraged.

Second, capacity-building programs should bedelivered in communities wherever possible. Aboriginalpeople clearly want programs within their own commu-nities and value ongoing contact with family and friendsas an important component of education. Experience

shows that Aboriginal people are more likely to completetraining programs if they are not required to move awayfrom home. The challenge of training is compounded bystresses associated with relocation to major urban centresor mine sites. Where program delivery in each communi-ty is not feasible, the establishment of regional trainingcentres should be considered.

Third, capacity building should reflect the particularneeds of communities and regions. Different types ofskills may be required depending on whether a commu-nity is located close to mining projects or oil and gasoperations. Communities that have extensive experiencewith the wage economy may have different needs fromthose that maintain a more traditional way of life.Sensitivity to community needs is therefore a critical partof capacity building. Changes to standard population-based funding formulas may be required to meet thespecial needs of small communities.

Fourth, information that is critical to capacity build-ing is often in short supply within Aboriginalcommunities. Better information should be provided onjob opportunities and long-term career options. Aboriginalpeople also need reliable and timely information if theyare to take advantage of the programs and funding that

The capacity of Aboriginal communities depends on

the physical, intellectual, emotional and spiritual

well-being of individuals and on the strength of the

social and cultural fabric that sustains families

and communities.

67


are available to assist them with education,training, counselling and other types ofcapacity building.

Finally, a community-basedorientation for capacity buildingshould address the communica-tions infrastructure required fordistance education. While thisapproach to education andtraining raises its own set ofproblems, opportunities to usethe Internet as a vehicle forcapacity building will likely increasein the future.

For all of these reasons, capacitybuilding in the North should include anincreased emphasis on meeting the par-ticular needs of Aboriginal communitiesand on providing opportunities forcommunity-based education and training.

Reinforce Aboriginal CultureFor reasons noted at the beginning ofthis section, the NRTEE’s Aboriginal Communities andNon-renewable Resource Development Program couldnot develop a comprehensive set of recommendationson the social and cultural aspects of capacity building inAboriginal communities. The NRTEE recognizes, howev-er, that a strong sense of cultural identity is essential tothe sustainability of Aboriginal communities and thatthe process of adapting to the wage economy canerode that sense of identity.

Capacity-building initiatives directed to participation innon-renewable resource development should thereforeinclude, where possible, elements designed to reinforceAboriginal culture. Providing programs in Aboriginallanguages is one example. Land management programsmay also act as bridges between traditional culture andpresent needs. Capacity building should include cross-cultural training that reinforces the values of Aboriginalculture and assists with the transition to the wageeconomy. A strong grounding in traditional language andculture and the ability to integrate traditional knowledgewith formal schooling are key building blocks forAboriginal capacity.

Link Capacity Building withIndustrial Benefits

RequirementsIndustry has a key role to play in thedevelopment of capacity withinAboriginal communities.Companies are currently involvedin a range of capacity-buildinginitiatives, from basic literacy andpre-employment training to spe-

cialized skills developmentprograms. In many cases, these initia-

tives are undertaken in response tocommitments established on a project-by-project basis, primarily through therequirement for benefits plans under oiland gas legislation and through the nego-tiation of impact and benefits agreementsas well as socio-economic agreements formining projects.

BHP is one company that has recog-nized the need to support lifelong learningfor its employees and the gap in available

government funding. On 8 November 2000, the com-pany announced the initiation of a $750,000Workplace Learning Program68 for its employees at theEkati Diamond Mine in the NWT. The program aims toimprove the skills of employees in the areas of reading,writing, mathematics and document use. It is anticipatedthat the program will lead to increased safety, job perform-ance and satisfaction. Launched as a two-year pilot,the program is expected to continue for several years,given the number of BHP employees, the company’scommitment to northern hiring, the impact and benefitsagreements, and the time required to make significantliteracy gains. This program will have a significant effectnot only on the employees but also on the communities inwhich they live.

A capacity-building strategy could provide a largercontext for these project-specific arrangements, increasingtheir effectiveness and providing greater certainty toindustry. Specific incentives could also be developed toencourage better benefits packages. For example, thebidding process for allocating oil and gas rights could bemodified to provide a predetermined price advantage tothe bid that includes the best capacity-building program.

Industry has a key role to

play in the development

of capacity within

Aboriginal communities.


68

The NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program has notdeveloped a comprehensive set of recommendations toaddress issues raised by impact and benefits agreementsand benefits plans. Nonetheless, the NRTEE recognizesthat these issues have important implications for indus-try’s contribution to capacity building and for regulatorycertainty. E fforts by government and Aboriginal commu-nities to improve capacity building could usefully beintegrated with other regulatory and negotiated mecha-nisms that are used to channel benefits directly fromnon-renewable resource developers to Aboriginal com-munities.

Make Strategic InvestmentsThree points relating to funding emerged clearly fromthe NRTEE’s consultations on capacity building. First,a significant financial commitment will be required tobuild the capacity needed for Aboriginal communities tomaximize the benefits they receive from non-renewableresource development. Second, Aboriginal people andother northerners feel strongly that a portion of theresource revenues generated from development in theNorth should be allocated directly to capacity-buildingprograms. Third, funding for capacity building hasthe potential to yield significant returns for each dol-lar invested.

Capacity building thus provides an opportunity forstrategic investment. A skilled local labour force willreduce the costs of resource development in the North,thereby improving the investment climate and makingmore resource revenue available for other uses. Socialservices costs will also be reduced over time if capacitybuilding leads to increased Aboriginal employment with-out destabilizing communities. Eventually, it should bepossible to reallocate money from social services budgetsto education, training and other aspects of capacitybuilding.

Adequate funding is essential for any initiatives todevelop and implement a cooperative capacity-buildingstrategy for the NWT. While the GNWT has significantjurisdiction in the areas of education and training, itsaccess to revenue sources is limited when compared withthe needs in this area. The federal government shouldensure that adequate funding is provided to supportcapacity building, notably through the strategic investmentof a portion of the significant revenue stream producedby non-renewable resource development in the NWT.

Recent Proposals and InitiativesThe importance of capacity building for Aboriginalcommunities and its link to sustainability have beenprominent themes in the federal government’s recentpolicy statements on northern and Aboriginal issues.The first goal of the northern component of DIAND’ssustainable development strategy is “to strengthencommunities by facilitating capacity building.”69 Thestrategy includes a series of objectives, targets and specif-ic actions directed toward this goal.70 The NorthernDimension of Canada’s Foreign Policyalso notes the “identi-fied need for capacity building within Arcticcommunities” and states that “support for a capacity-building focus in the Arctic Council” will be a keycomponent of Canada’s contribution to strengtheningthis organization.71

Capacity building is also an important priority inGathering Strength — Canada’s Aboriginal Action Plan, par-ticularly under the theme of “Supporting StrongCommunities, People and Economies.” This section ofthe policy statement begins by saying that “supportinghealthy, sustainable Aboriginal communities meansfinding new ways to empower individuals and their com-munities.”72 It then enumerates key measures ofwell-being and observes that these factors “speak to theimportance of building capacity for both individuals andcommunities.”73 Later in the statement, specific referenceis made to capacity-building initiatives such as theAboriginal Human Resources Development Strategyand a new strategy to “build capacity for lands andresource management in First Nations communities.”74

Turning specifically to the federal government’s “NorthernAgenda,” Gathering Strength underlines the need “to ensurethat Aboriginal people and communities share in thewealth and benefits expected to flow from major resourcedevelopment in the NWT.”75 Enhanced Aboriginalcapacity is clearly essential to meeting this challenge.

Recent territorial initiatives have also focused oncapacity building. The GNWT’s Non-renewableResource Strategy identifies three key challenges tolabour force development in the NWT: “Basic educationlevels must be improved; more northerners must betrained in professional/technical occupations; [and] morejobs must be created in smaller communities.”76 Inresponse to these challenges, the GNWT proposes afour-year program to improve training for jobs in miningand the oil and gas industry. Priority areas are humanresource planning, career development promotion, and

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industry-specific and career-oriented training. The totalbudget is $17.86 million. A separate initiative is proposedto promote maximum employment of northerners innon-renewable resource sectors.77 Key elements of thisstrategy include the compiling of labour force infor-mation, career counselling, and measures to develop amore flexible and mobile workforce.

The Economic Strategy Panel defined capacity as“the ability of people to understand and respond tochallenges and a changing environment.”78 The Panelidentified general needs for education and skills trainingand highlighted leadership development as requiring spe-cial attention. Its specific recommendations touched ona broad range of issues, from addiction problems andeducational standards to labour mobility and the coordi-nation of training programs.79

Capacity building was also a major priority of theJoint Aboriginal-Industry Resource DevelopmentWorkshop. The report recommended measures to increaseAboriginal corporate capacity, primarily through fundingto assist Aboriginal development corporations in identi-fying business opportunities, establishing partnershipsand joint venture arrangements, and training senior man-agement and boards of directors.80 A program toprovide leadership in developing education and traininginitiatives was also proposed.81 Support for committeessuch as the Mine Training Committee could be providedthrough this program. The report also suggested thatfunding might be used to facilitate the adoption in theNWT of a program similar to Saskatchewan’s Multi-PartyTraining Plan.

At the national level, several initiatives are currentlyfocusing on Aboriginal capacity. The intergovernmentalFederal-Territorial-Provincial-Aboriginal Committee hascreated a working group to promote Aboriginal partici-pation in the economy. There is also a tripartite workinggroup (federal-provincial-territorial) addressing Aboriginalparticipation in the social union framework agreement.Also noteworthy is the National Aboriginal YouthStrategy, developed by a working group consisting ofrepresentatives from provincial and territorial governments,the federal government and five national Aboriginalorganizations. This strategy is intended to close the gapbetween the current profile of Aboriginal youth and otherCanadian youth on a range of indicators. In particular, itrecognizes that Aboriginal youth need to be equippedwith the necessary skills, abilities and information to takeadvantage of the full range of education, training and

employment possibilities. The objectives of the NationalAboriginal Youth Strategy are consistent with theNRTEE’s belief that, over the next 25 years, Aboriginalpeople in the North should achieve levels of educationalattainment that are at least equivalent to those of non-Aboriginal people.

Federal funding for capacity building has beenprovided through the Aboriginal Human ResourcesDevelopment Strategy, initiated by Human ResourcesDevelopment Canada (HRDC). Under this program, theNorth received a total of $23 million in the 2000-2001fiscal year. An additional $8 million for capacity buildingflowed directly to the territorial governments in this fis-cal year under the intergovernmental Labour MarketDevelopment Agreements. There are, it should be noted,some restrictions on the use of this money. For example,a significant proportion is available only to clients eligiblefor employment insurance. Funds provided under theAboriginal Human Resources Development Strategywere distributed through contribution agreements to

Aboriginal people and other

northerners feel strongly that a

portion of the resource revenues

generated from development in the

North should be allocated directly

to capacity-building programs.

70

Aboriginal organizations and communities. Althoughultimately accountable to the federal government, thesecommunities and organizations are responsible fordisbursing the funds and creating their own programs.The Aboriginal Human Resources Development Strategyhas now been locked in for the next three years, follow-ing adoption of a national allocation model to distributefunding to the provinces and territories. As a result ofdevolution to the provincial and territorial govern-ments, HRDC is no longer involved in the directprovision of training.

As noted above, the NWT has a multitude of edu-cation and training programs designed to increaseAboriginal capacity. Some of these are available throughpublic educational institutions, while others are provideddirectly by industry. The problem is not an absence ofinitiatives but rather the lack of focus and coordinationbetween them.

Renewed Leadership for CapacityBuilding — NRTEE RecommendationsLeadership and coordination are essential for effectivecapacity building in the NWT. A thorough assessmentshould be made of the “big picture” issues for capacitybuilding, notably the overall adequacy of education,employment training and life skills enhancement.Territorial and regional capacity-building strategiesshould be developed, focusing particularly on theopportunities presented by non-renewable resource devel-opment. Common objectives should be identified,financial and human resources pooled and programscoordinated. Opportunities for eliminating duplicationand simplifying program delivery should be explored.Close collaboration with Aboriginal communities andindustry should be promoted to ensure that the pro-grams offered meet the needs and expectations of

Aboriginal people and potential employers. Community-based capacity building should be emphasized. Overallfunding levels and specific funding priorities should bereviewed and adjusted.

At present, there is no one responsible for initiatingand overseeing these critically important initiatives.Without concerted efforts in these areas, however, theobstacles to capacity building identified earlier (see sectionObstacles to Capacity Building) are likely to remain. Thefive recommendations that follow are directed to elimi-nating these obstacles and advancing an ambitiousagenda for capacity building in Canada’s North. Theserecommendations focus on two key areas. The first is theestablishment of mechanisms for assessing the currentstate of capacity-building initiatives and integrating exist-ing and new initiatives into a coherent strategy. Second,the NRTEE’s recommendations are intended to reinforcethe foundations for building a renewed commitment tothe sustained enhancement of capacity within Aboriginalcommunities. These foundations include an increasedrecognition within Aboriginal communities of the funda-mental importance of education and training and attentionto the basic adult literacy and skills training that isneeded if significant numbers of Aboriginal people areto enter the wage economy.

A Territorial Champion for AboriginalCapacity BuildingThe NRTEE believes that an independent championshould be appointed to drive the capacity-building agendain the NWT. This individual would provide renewedleadership and direction for capacity-building initiatives,

There is a need for greater community empower-

ment in capacity building. Communication,

coordination and partnerships among organizations

within communities and at regional and territorial

levels should be encouraged.

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while fostering improved cooperation among govern-ment, Aboriginal organizations, resource developersand educational institutions. A two-year term for thisposition should be established to maintain focus andensure rapid action on critically important issues.

The principal responsibilities of the capacity-buildingchampion would be to:

• investigate and report on the current state ofAboriginal capacity and capacity-building initiativesin the NWT in areas such as adult literacy, primaryand secondary education, employment training, gov-ernance (e.g., community leadership andadministration) and life skills;

• work with federal and territorial departments,Aboriginal organizations and governments, industryand educational institutions to build partnerships,ensure synergies (i.e., in terms of existing fundingand programming), identify new funding sources,establish common priorities and coordinate capaci-ty-building initiatives;

• develop and promote proposals for improving theeffectiveness of capacity-building programs, focus-ing particularly on the opportunities presented bynon-renewable resource development over the next10 to 25 years;

• provide guidance to the Premier of the NWT, asrequested, on the creation and implementation ofthe three-year education awareness campaign;

• establish interim and long-term targets for capacity-building programs (e.g., levels of community-basedprogram delivery) and for objective outcomes (e.g.,program completion rates and percentages of pro-gram graduates securing employment);

• monitor progress toward meeting these objectives; and

• promote accountability and ensure public visibilityfor issues and initiatives related to capacity buildingby issuing public reports on the state of capacity-building programs in the NWT, the obstacles toeffective capacity building and the success of initia-tives designed to overcome these obstacles.

The independent capacity-building champion wouldhave to work closely with government agencies,Aboriginal organizations, educational institutions andindustry. At the same time, an arm’s length relationshipfrom all of these parties would be necessary to maintaincredibility and impartiality when addressing complex

issues and a multitude of interests. To achieve this balance,the NRTEE recommends that the champion be appoint-ed by the Intergovernmental Forum. This body bringstogether high-level political leadership from federal, terri-torial and Aboriginal governments and provides a vehiclefor cooperation among officials. Capacity building isalready an issue on the Intergovernmental Forum’s agen-da. Close consultation with industry and other interestedparties (e.g., educational institutions) would be required,however, in the process leading to the appointment of acapacity-building champion by the IntergovernmentalForum.

The capacity-building champion would ultimately beaccountable to the Intergovernmental Forum at the endof his or her term. The accountability model, however,would follow precedents established by the federalAuditor General and the Commissioner of theEnvironment and Sustainable Development. Although thechampion’s mandate would be determined through aconsultative process led by the IntergovernmentalForum, he or she would enjoy a high level of autonomywhen carrying out these responsibilities. Secure and ade-quate funding for the two-year term would also beessential to ensure independence. Precise staffing andbudgetary requirements would be determined by theIntergovernmental Forum.

The NRTEE recognizes that its proposed initiativeswill require funding. It also anticipates that further rec-ommendations for expenditures on capacity building arelikely to emerge from the work of the independentcapacity-building champion and from the regional humanresource planning discussed below. It is essential, there-fore, that the role of the independent champion includeidentification of funding sources, with the support ofthe Intergovernmental Forum and the proposedNRTEE capacity-building forum (see subsectionsPromoting Regional and Community-based CapacityBuilding Through the Intergovernmental Forum, and AnNRTEE-Sponsored Capacity-Building Forum). TheNRTEE’s preliminary investigations into this area indi-cate that there are substantial funds available for capacitybuilding (e.g., the federal government’s five-year commit-ment of $1.6 billion to the Aboriginal Human ResourcesDevelopment Strategy). However, these funds are notnecessarily being used in the most effective manner. Anidentification of all of the existing funding sources forcapacity building is required, followed by an evaluation oftheir current allocation and practical results.


72

The NRTEE is convinced that an independentcapacity-building champion would serve as the catalystfor the initiatives that are required to improve the capacityof Aboriginal communities in the NWT. The need forthis position is particularly urgent given the current andprojected levels of activity in the non-renewableresource sectors. For Aboriginal communities to maxi-mize the benefits from this activity, decisive action tostrengthen capacity building is required immediately. TheNRTEE therefore recommends that:

The Intergovernmental Forum, in consultation

with industry and other interested parties,

should appoint an independent champion for a two-

year term to evaluate the current state of Aboriginal

capacity building in the NWT, encourage greater

cooperation and integration among capacity-build-

ing programs, ensure synergies (i.e., in terms of

existing funding sources), identify new sources of

funding, and develop and promote new initiatives.

Promoting Regional and Community-based Capacity Building Through theIntergovernmental ForumThe Intergovernmental Forum is particularly well suitedto addressing the principal obstacles to capacity buildingin the NWT. As noted earlier in the section Obstacles toCapacity Building, overcoming these obstacles requiresimproved coordination, more attention to the opportu-nities offered by non-renewable resource development,and greater emphasis on community-based capacitybuilding. The NRTEE believes that the IntergovernmentalForum should support and complement the work ofthe independent capacity-building champion in theseareas, focusing particularly on the development ofregional and community-based strategies for Aboriginalcapacity building.

Many of the key requirements for successful capacitybuilding, identified above in the section Requirementsfor Successful Capacity Building, could be met throughthe establishment of comprehensive human resourcedevelopment plans on a regional basis. These planswould include human resource inventories, needsassessments, regional priority setting, coordinated pro-gram delivery and community-driven initiatives. Definingroles and responsibilities at the regional level would be a

key objective. Proactive regional planning processeswould focus on the early identification of needs andopportunities, so that funding and programs arrive intime to allow Aboriginal communities to prepare for thechallenges and opportunities of non-renewable resourcedevelopment. They would also facilitate input from thecommunity level and would allow initiatives to be tailoredto the particular social, economic and cultural circum-stances of Aboriginal communities in different parts ofthe NWT. Finally, regional human resource planningwould facilitate the integration of capacity-building ini-tiatives with industrial benefits requirements, since localbenefits requirements for major non-renewable resourceprojects often have a regional focus and target specificcommunities.

The design and implementation of these regionalplans would require close collaboration between federaldepartments involved in capacity building (e.g.,DIAND, HRDC), the NWT Department of Education,Culture and Employment, Aboriginal organizations andgovernments, community services boards and industryrepresentatives. The Intergovernmental Forum, in

In particular, the National Aboriginal

Youth Strategy recognizes that

Aboriginal youth need to be equipped

with the necessary skills, abilities and

information to take advantage of the

full range of education, training and

employment possibilities.

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collaboration with the independent capacity-buildingchampion, could play a key role in building the requiredpartnerships and supporting the development of regionalhuman resource development plans. It could also provideassistance in linking these plans with broader territorial andnational programs and in ensuring a community-basedfocus, wherever possible.

The NRTEE believes that a regional focus forhuman resource planning provides the best fit with thepatterns of Aboriginal governance, resource develop-ment, socio-economic circumstances and culturaldiversity within the NWT. Regional plans could offer thebenefits of a more focused and coordinated approach tocapacity building, while recognizing the differences inneeds, priorities and opportunities that exist acrossregions in the NWT. Given the number of playersinvolved in these processes, the IntergovernmentalForum could provide valuable assistance in the form ofexpertise and templates for the preparation and imple-mentation of these plans. The NRTEE thereforerecommends that:

The Intergovernmental Forum should promote

a regional and community-based approach to

capacity building in the NWT by playing a lead

coordination and support role in the development

and implementation of regional human resource

development plans.

An Awareness Program to Place Educationand Training on a “Pedestal” inAboriginal CommunitiesThe NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program focusedparticularly on the opportunities for promoting long-term sustainability through the prudent use of theNorth’s non-renewable resources. Maximizing the benefitsfrom resource development requires specific initiatives,such as the two proposed above, to help Aboriginal peo-ple integrate into the wage economy. The increasedcapacity in Aboriginal communities that is urgentlyrequired to achieve sustainability depends, however, onmore than the improved coordination and delivery ofeducational and training programs and the implementa-tion of human resource planning. The extensiveconsultation and research that was undertaken as part ofthe NRTEE’s program convinced Task Force membersthat a strengthened commitment to capacity building

among Aboriginal people must go hand in hand with anew economic basis for sustainable Aboriginal commu-nities. The NRTEE believes that a greaterunderstanding and appreciation of the value of educa-tion and training must be fostered within Aboriginalcommunities if capacity-building initiatives, such asthose proposed above, are to yield the desired results.

Most Aboriginal men and women place a relativelylow value on formal education. For social, cultural andhistorical reasons, many Aboriginal people see little reasonto complete high school and develop good reading, writingand computer skills. Formal education was not part oftraditional Aboriginal society, since life on the landrequired a set of skills that differs significantly from thoseneeded in the wage economy. In many communities,there are few role models to show young people thevalue of education. Furthermore, the experience withnon-Aboriginal education was a negative one for manyAboriginal people. The forced removal of children toresidential schools hundreds of miles from their homeshas left scars that are still fresh in many Aboriginal commu-nities and families.

There have also been too few incentives to encour-age educational achievement by Aboriginal people. Inmany Aboriginal communities, formal education is notwidely seen as a means of securing meaningful anddesirable employment or improving individual, family orcommunity life. Aboriginal people often realize too latethat their education and training did not equip them tocompete with other Canadians and immigrants foremployment and business opportunities in the North.The value of education in non-economic terms is alsoinadequately appreciated. Aboriginal people frequently seeno connection between the preservation of their cultureand formal education. The importance of education andtraining for successful self-government and increasedindependence and self-sufficiency is not widely recognized.

The NRTEE believes strongly that a concertedeffort is needed to overcome the attitude of indifferencetoward education that prevails in many Aboriginalcommunities. To this end, the NRTEE recommends theestablishment of a high-profile initiative to put educationand training on a “pedestal” in all 35 Aboriginal commu-nities in the NWT. This initiative is modelled on a verysuccessful program led by Premier Frank McKenna inNew Brunswick, which promoted self-reliance, education,training and technology.

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The NRTEE is proposing a three-year program forthe NWT that would consist of expositions, career days,festivals, recognition events and high-profile promotionalactivities involving the Premier, the NWT Cabinet,Aboriginal chiefs, federal political leaders, industry rep-resentatives and other prominent citizens. To give thisinitiative the required visibility and credibility, overallleadership should come from Premier Kakfwi. ThePremier would involve both the IntergovernmentalForum and the independent champion in this initiative,as strong support from Aboriginal governments, territorialand federal politicians and public servants would be keyto this initiative. The National Aboriginal AchievementFoundation could provide valuable guidance and couldassist in securing the involvement of 24 outstandingAboriginal achievers from across Canada to serve as rolemodels and to bring the key messages directly toAboriginal communities. Leadership and direction wouldalso be provided by industry and business leaders. Basedon consultations in the North and an examination ofexperience with other initiatives, the NRTEE estimatesthat a contribution of $5 million by the federal govern-ment is necessary to launch this three-year initiative (i.e,$1.7 million per year). As a comparison, a total of $2.6million was the amount spent on Aboriginal languagesin the NWT in 1999.82

Building the Aboriginal capacity that is essential forthe long-term sustainability of Aboriginal communitiesrequires a revolutionary change in the way manyAboriginal people think about the value of educationand training for themselves, their children and their com-munities. Education and training should be placed on a“pedestal,” signalling clearly their place among the high-est aspirations of Aboriginal people as they look to thefuture. As a concrete step toward raising the profile andstatus of education and training within Aboriginal com-munities, the NRTEE recommends that:

The Government of Canada should con-

tribute $5 million toward the creation of a

three-year awareness program, headed by the

Premier of the NWT, to raise the profile of educa-

tion and training in all Aboriginal communities in

the NWT. The Premier will involve the

Intergovernmental Forum, the independent champi-

on, the National Aboriginal Achievement

Foundation (including 24 outstanding Aboriginal

achievers from across Canada), industry and busi-

ness in this awareness project.

Enhancing Adult Literacy, Education and TrainingThere is no doubt that the education and training ofAboriginal youth is central to the enhancement ofAboriginal capacity over a 10- to 25-year time frame.The NRTEE believes, however, that attention to adultliteracy and upgrading should also be a key component ofthe overall capacity-building strategy. There are four rea-sons why a capacity-building initiative should bedirected specifically at the 7,000 Aboriginal men andwomen who are between 18 and approximately 48 yearsof age.

First, this group makes up the current pool ofpotential Aboriginal employees and entrepreneurs in theNWT. If Aboriginal people are to play a significant rolein the resource development projects that are ongoing orexpected within the next 10 years, many of the people inthis segment of the population must be activelyinvolved. It is not satisfactory simply to groom a newgeneration of Aboriginal people for jobs in the non-renewable resource sectors and in the more diversifiednorthern economy of the future. By the time this newgeneration is ready to take its place within the wageeconomy, significant opportunities will already have beenmissed.

Second, many Aboriginal adults lack the basic reading,writing, mathematics and computer skills that are essentialfor entry-level positions. A basic level of literacy isgenerally required even for unskilled jobs, if for no otherreason than to ensure safety at the workplace and facili-tate on-the-job training. Among Aboriginal adults withsome formal education, relatively few have completedhigh school or have high-school diplomas that areequivalent in value to those from other jurisdictions.Expensive capacity-building initiatives are likely to befruitless without addressing the fundamental compo-nents of literacy and education among the intendedbeneficiaries of these programs. In addition to reading,writing and mathematics, these fundamental skills nowinclude some exposure to the rapidly changing world ofcomputer technology and global communications.Without attention to these fundamentals, Aboriginalpeople will be unable to compete in the wage economyand will face insurmountable obstacles as they attempt tobalance the influences of traditional and non-Aboriginalsociety on their daily lives.

Third, there is a need to promote the value of life-long learning within Aboriginal communities and toentrench this principle within the educational system in

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the NWT. The need for a lifelong approach to learning isincreasingly recognized throughout the industrializedworld, especially in response to the rapid changes in infor-mation technology. Given the relative disadvantages ofAboriginal communities in the areas of basic literacy andeducation, a lifelong approach to learning is a particularlyimportant component of long-term capacity building.Lifelong learning may also place less strain on the socialand cultural fabric of Aboriginal communities than, forexample, an approach geared exclusively to the intensivetraining of young people, some of which may involve spe-cialized programs that require extended absences fromcommunities and, in many cases, from the NWT. Theestablishment of an initiative directed to adult literacy andupgrading would provide the starting point for moreextensive support for lifelong learning in the NWT.

Finally, attention to adult upgrading is an importantway of providing role models for Aboriginal youth. IfAboriginal adults demonstrate the importance of educationand training by their actions as well as their words, it ismore likely that their children will recognize the value ofeducational achievement. In fact, getting adults “back toschool” may be a useful way of encouraging youngerpeople to stay in school. Education and training would beseen as a widely shared part of family and communitylife, not simply an obligation imposed upon the youth.

For these reasons, the NRTEE is recommending theestablishment in the NWT of a 10-year adult educationprogram aimed at literacy, high-school upgrading,

computer training and other basic skills. This programwould follow the successful launch of the three-yearawareness program proposed above in recommendation 9.The most successful adult educators in Canada wouldplay a key role in designing this program in consultationwith the NWT’s Aboriginal leaders, territorial govern-ment representatives, business leaders and educators.Flexibility would be necessary to adapt to the particularconditions, literacy levels and attitudes in each of theNWT’s 35 Aboriginal communities. Communityresources, such as libraries, should be used and augmented.This innovative approach would build on Aboriginal cul-ture and traditions and would instill values of pride andself-sufficiency.

The NWT Department of Education, Culture andEmployment should administer this program, usingexperienced administrators and instructors who would becompetitive for similar positions in southern Canada inorder to meet the highest standards of literacy and high-school achievement levels within Canada. The NRTEE’sconsultations suggest that a budget of $60 million over10 years would be required for this program (or $6 millionper year). It should be noted that in the NWT, theamount currently spent on adult basic education is$257,000 per year, compared with $6 million per yearspent on French language training (1999 figures).83

Given the strong arguments for immediate action toimprove the capacity of Aboriginal adults in the North,the NRTEE recommends that:

The Government of Canada should con-

tribute $60 million for a state-of-the-art

10-year adult education program, to begin following

the successful launch of the awareness program pro-

posed in recommendation 9, to enhance literacy,

high-school upgrading, computer training and basic

skills among Aboriginal men and women in the

NWT between the ages of 18 and approximately 48.

This program should be designed by the most suc-

cessful Aboriginal adult educators in Canada and

be administered by experts employed by the NWT

Department of Education, Culture and

Employment in accordance with the highest

Canadian standards for literacy and high-school

achievement levels.

1010

Attention to adult

upgrading is an important

way of providing role

models for Aboriginal

youth.


76

An NRTEE-Sponsored Capacity-Building ForumThe urgent need for action to enhance Aboriginal capacitywas underlined repeatedly by NRTEE Task Forcemembers, key players and researchers throughout theAboriginal Communities and Non-renewable ResourceDevelopment Program. At present, many Aboriginalcommunities are unprepared to capitalize on the oppor-tunities and manage the risks associated with currentand expected levels of activity in the NWT’s non-renewable resource sectors. The scale of ongoing andproposed projects has placed considerable pressure onboth communities and capacity-building programs.Dialogue must be initiated and partnerships establishedto overcome the obstacles to capacity building and toprovide Aboriginal communities with the tools theyneed to become full participants in non-renewableresource development. The cost of failing to act nowwill be significant forgone opportunities and perhaps aperpetuation of the unfortunate social and economiclegacy of past development for Aboriginal communitiesin northern Canada.

NRTEE Task Force members recognized the imme-diacy of the capacity-building challenge and expressedconcern that valuable time would be lost if the initialsteps to address this challenge were delayed until afterthe appointment of a capacity-building champion and theimplementation of measures by the IntergovernmentalForum in support of regional human resource develop-ment planning. The planning and delivery of theNRTEE’s proposed initiative to promote the value ofeducation and training will also take some time, as willthe implementation of a comprehensive adult literacyand upgrading program. The NRTEE is therefore pre-pared to take the initiative in convening, within threemonths of the official launch of this report, a capacity-building forum involving key representatives from thefederal government, the GNWT, Aboriginal govern-ments and organizations, industry, educationalinstitutions and other interested stakeholder groups.

The capacity-building forum will have two broadobjectives. The first will be to raise the profile of capacitybuilding as a critical issue for Aboriginal communitiesand all northerners. The second will be to contribute to

establishing the partnerships among key players that areessential to addressing this issue. A leadership role inrelation to both of these objectives fits well with themandate and guiding principles of the NRTEE and isa natural extension of the NRTEE’s AboriginalCommunities and Non-renewable ResourceDevelopment Program.

The capacity-building forum will also be used tobuild momentum behind the key initiatives recommend-ed by the NRTEE. Participants in the forum will beasked to provide guidance to the IntergovernmentalForum on three issues: 1) the precise mandate of theindependent capacity-building champion, 2) the measuresthat should be taken to support regional human resourcedevelopment planning and 3) the identification of fundingsources to ensure implementation of these two initiatives.More generally, the forum will focus on developing acommon agenda for capacity building in the NWT andthroughout northern Canada. Reflecting the prioritiesidentified by the NRTEE, this agenda will include rais-ing awareness of the importance of education andtraining within Aboriginal communities and establishingmeasures to promote adult literacy and skills upgrading.As such, the capacity-building forum will contributedirectly to the implementation of the NRTEE’s final tworecommendations in this area.

The NRTEE views capacity building as central to itsvision of sustainable Aboriginal communities. As a tan-gible and immediate contribution to promoting that

vision, the NRTEE proposes that:

The National Round Table on the

Environment and the Economy should con-

vene a capacity-building forum within three months

of the release of this report to raise the profile of

capacity-building issues (including the importance

of basic literacy and adult education), promote part-

nerships and provide specific guidance to the

Intergovernmental Forum on the mandate of the

independent capacity-building champion, the meas-

ures to be taken in support of regional human

resource development planning, and the identifica-

tion of existing and new funding sources.

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C h a p t e r S e v e nC h a p t e r S e v e n

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Consultation

79

Aboriginal Communities and Non-renewable Resource Development Consultation

The Importance of ConsultationAboriginal communities view full and timely consultationas a fundamental pre-condition for non-renewableresource development. Consultation shows respect forAboriginal people when development is contemplatedfor their traditional lands. It provides them with theinformation and forewarning necessary to identifyand respond to the potential risks and benefits ofdevelopment proposals.

The benefits from Aboriginal-industry consultationflow both ways. Resource developers that consult effec-tively with Aboriginal communities gain a betterunderstanding of the needs and interests of the peoplemost directly affected by their projects. Project planningcan then proceed in a way that respects the values andmeets the needs of all parties. The likelihood of majorconflicts at the project review and regulatory stages istherefore reduced. Companies that establish “goodneighbour” relationships with Aboriginal communities inthe region where they are active stand to reap signifi-cant benefits as they undertake ongoing exploration anddevelopment.

The legal foundation for consultation involving gov-ernment is the Crown’s fiduciary duty to Aboriginalpeople. Consultation is also good policy and good politics.E ffective consultation with Aboriginal people is a

precondition to any successful government initiativeregarding non-renewable resource development in the North.

Consultation takes many forms and occurs in manycontexts. In all cases, however, it is intended to promotemeaningful Aboriginal participation in decision making.Consultation is the key to the mutual understanding,cooperation and partnerships that are essential if non-renewable resource development is to contribute to thesustainability of Aboriginal communities.

Obstacles to Effective ConsultationThe NRTEE has identified four principal obstacles toeffective consultation:

• consultation is often too late in the decision-makingprocess for resource development and is toorushed, putting undue pressure on Aboriginal com-munities and undermining the trust that is requiredfor mutually beneficial relationships;

• Aboriginal communities often lack the human andfinancial resources to participate effectively in con-sultation;

• the roles and responsibilities of industry, govern-ment and Aboriginal organizations in consultationprocesses are often ill-defined, leading to uncertain-ty, delay and frustration; and

T he need for effective consultation with Aboriginal communities is a

common thread that runs through all efforts to maximize benefits and minimize risks from

non-renewable resource development. Consultation opens the door to meaningful participation

by Aboriginal communities in decision making. For industry and government, consultation with

Aboriginal communities is a legal and practical requirement for non-renewable resource development

in the North. Consultation is also the first step in building the trust and partnerships that benefit

everyone involved in resource development. The NRTEE is therefore making a series of recommendations

on consultation, the focus of which is to support Aboriginal participation in these processes.

Consultation Aboriginal Communities and Non-renewable Resource Development

80

• Aboriginal culture and language are sometimesgiven insufficient respect in consultation processes.

Measures to overcome these obstacles are required.

Requirements for SuccessfulConsultationThe NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program identifiedfour principles to guide successful consultation. First,consultation should occur early in the planning for non-renewable resource development and should continuefrequently thereafter. Second, parties should clarify theirexpectations and needs at the outset. Third, consultationprocesses must take account of differences in languageand culture. Finally, adequate funding for Aboriginalparticipation in consultation processes is essential.

Consult Early and Consult OftenThe key message regarding consultation is a simple one.Consultation should start at the earliest stages of explo-ration for non-renewable resources and should continueregularly throughout resource development and up untilreclamation is completed.

Aboriginal communities understandably resent beingconsulted late in the day about projects that may haveenormous implications for their land, culture and com-munities. They also need time to review complextechnical material and obtain expert advice if required. Along period of discussion and consensus building isoften necessary within communities before Aboriginalleaders can speak for their people on important issues.

Consultation that takes place late in project planningincreases pressure on the limited human and financialresources of Aboriginal communities. Late consultationis often rushed because of project timelines establishedby developers. Opportunities for meaningful Aboriginalinput into decisions on project design and timing arelimited. Not surprisingly, Aboriginal communities arelikely to respond with a long list of terms and conditionsfor development. Frustration on both sides is inevitable.

This frustration increases the temptation for partiesto attempt a political end-run around the consultationprocess. Ministers find themselves under pressure tomake a political decision on matters that should beworked out through negotiations between the parties.Politicization of the process further undermines the

level of trust between Aboriginal communities, indus-try and government.

Even consultations that begin early require constantrenewal throughout the life of non-renewable resourceprojects. Important new issues will inevitably come tolight. Earlier understandings and expectations may needto be revised in light of changing circumstances.Unexpected conflicts may arise, as may unforeseenopportunities for mutual benefits.

Consultation is a relationship, not just a set of hurdlesto overcome on the way to project approval. Mutualrespect and trust are fundamental to that relationship.Both respect and trust must be demonstrated and earnedthrough early and frequent consultation. The principle“consult early and consult often” should guide theactions of government, industry and Aboriginal commu-nities at all stages of non-renewable resourcedevelopment. Resource developers and governments thatignore this maxim do so at their own peril.

Clarify Expectation Between the PartiesConsultation is often a complex and uncertain process.Past experience shows that it is full of pitfalls for theunwary. Resource developers that are new to the Northmay have unrealistic expectations about the time andmoney required for proper consultations. Aboriginalcommunities may not be certain whether consultationwill result in meaningful participation in decision mak-ing or serve simply as an opportunity to listen and makecomments. Governments’ encouragement of consulta-tion may mask ambiguity about what is actuallyrequired. All parties may be unclear about their rolesand responsibilities in the consultation process.

Consultation processes cannot follow strict rulesor procedures. Each project will raise distinctive issues.Every relationship among parties will inevitably beunique in certain respects. Nonetheless, the currentuncertainty regarding the basic requirements for consul-tation is fertile ground for disappointed expectations andfrustration.

Even if no single formula will work in all circum-stances, parties entering consultation processes shouldaddress a number of key issues such as:

• What is the purpose of consultation?

• Who needs to be consulted?

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• How should consultation processes be designedto reach the appropriate communities and all thedifferent groups within those communities (e.g., eld-ers, young people, business people, traditionalhunters and trappers, women)?

• What are the respective roles and responsibilities ofindustry, government and Aboriginal communitiesin the process?

• What are the basic ground rules to ensure that con-sultation proceeds in a fair and effective manner?

• What is the relationship between consultation andparticipation in decision making?

• How is consultation linked to formal project reviewand regulatory processes?

• Does consultation imply a right of veto on certaintypes of decisions?

• What constitutes consensus in a consultationprocess?

• What happens to consultation processes whenconsensus is not achieved?

Answers to these types of questions will have to beworked out through a collaborative process involvingAboriginal organizations, industry and government.There may not be clear answers in all cases. For eachconsultation process, parties may want to chart their owncourse. While there is no one “correct” answer for each

of these questions, parties should at least ensure thatthey share a common understanding on these key issueswhen they begin a consultation process.

Address Differences in Culture and LanguageCultural differences are a major obstacle to effectiveconsultation. Where parties bring fundamentally differentvalues and life experiences to the table, communicationis difficult even if they speak the same language. Thiscultural divide is often widened by a lack of propertranslation when resource developers talk with residentsof Aboriginal communities. Many Aboriginal people —particularly elders and those in more remote communities— are most comfortable speaking their own language.Sensitivity to cultural differences and respect for theimportance of Aboriginal languages are both essentialfor successful consultation in the North. The impor-tance of this message was repeatedly brought home tothe NRTEE as it consulted with Aboriginal people duringthe Aboriginal Communities and Non-renewableResource Development Program.

Provide Funding for AboriginalParticipation in ConsultationAboriginal communities must be able to participateeffectively if consultation is to achieve the intendedresults. Aboriginal capacity is also essential if consulta-tion processes are to operate in an efficient and timelymanner. Representatives from Aboriginal organizationsand from industry both agree that a lack of Aboriginalcapacity to engage in consultations is a major problem.

Consultation places increased demands on the limitedfinancial and human resources of Aboriginal communities— resources that in many cases are already stretched tothe limit. Political leaders within Aboriginal communities

Consultation is the key to the mutual

understanding, cooperation and partner-

ships that are essential if non-renewable

resource development is to contribute to the

sustainability of Aboriginal communities.

Consultation Aboriginal Communities and Non-renewable Resource Development

82

must guide the consultation process. Negotiators areneeded to participate directly in discussions. Technicalexpertise on a broad range of issues is also essential.Finally, consultation processes are themselves expensive,particularly if funding is needed so that people fromremote communities can attend meetings.

Access to independent expertise is particularlyimportant when Aboriginal communities are faced witha blizzard of information from resource developers andgovernment. Communities need to have confidence thatthey can participate in consultations on as equal a foot-ing as possible with the much larger corporations andgovernment departments across the table. Funding andin-kind assistance from government and industry aretherefore essential to ensure that Aboriginal communi-ties have the capacity to participate effectively inconsultation.

Various government programs are available to assistAboriginal involvement in consultations. In addition,industry supports consultation through specific partici-pation and funding agreements with Aboriginalorganizations and communities. There are, however, gapsin this funding. There is also a need for guidelines on therespective obligations of government and industry tofund consultation processes. Industry is willing to con-tribute its share but wants some certainty at the outsetabout the cost of its commitment. Overall, funding ini-tiatives should be directed to ensuring that Aboriginalcommunities can participate meaningfully in the fullrange of consultation processes relating to non-renewableresource development in northern Canada.

Recent Proposals and InitiativesThe Economic Strategy Panel noted that uncertaintyrelated to consultation complicates planning for non-renewable resource development.84 The Panelconcluded that more clearly defined consultationrequirements would help in attracting and retaininginvestment. In particular, it identified a need for moreguidance on who must be consulted and how extensiveconsultation should be.

The DIAND currently has two initiatives intended toimprove consultation in the NWT. Guidelines for con-sultation processes and a compilation of best practicesare both being prepared for publication. In addition, asnoted above, there are various government programs andarrangements with private companies through whichAboriginal communities can obtain some funding forconsultation.

Funding Participation in ConsultationProcesses — NRTEE RecommendationsMany of the requirements for effective consultationnoted above can best be addressed by the parties to spe-cific consultation processes. While legal requirementsand policy direction have a role to play in providing struc-ture and impetus to consultations, they are no substitutefor good faith, practical experience and continued efforton the part of all participants in these processes. Thefunding of Aboriginal participation in consultations isone area, however, where the NRTEE sees a pressingneed for action by government. To this end, theNRTEE has identified two specific recommendations tosupport effective Aboriginal involvement in consultationprocesses related to non-renewable resource develop-ment.

Continuation of the Interim ResourceManagement Assistance ProgramAboriginal communities without settled land claims faceparticular challenges in finding the resources necessaryto participate effectively in consultations. To address thisneed, the Interim Resource Management Assistance(IRMA) Program was established by DIAND and theNWT Department of Resources, Wildlife and EconomicDevelopment in 1997. This four-year program is intendedto help strengthen the ability of Aboriginal communitiesin unsettled claim areas in the NWT to participate inland and resource management processes affecting theirsurrounding land use areas. The processes for whichIRMA funding is available include:

• consultations associated with regulatory processes(e.g., land leases, forestry licences, land use permits,water licences and oil and gas rights issuance);

• consultations and participation in environmentalassessments related to proposed projects or activi-ties; and

• consultations related to resource management policyand legislation.

The IRMA Program has an annual budget of $1.5million. The federal government contributes $1.125 mil-lion and the GNWT $375,000. Funding is provided intwo ways. Base funding in the amount of $1 million isallocated to recipients according to a per capita fundingformula. The remaining $500,000 makes up a “resourcepressures fund” to be used in cases where large-scale

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projects require more intensive study and examinationand where it can be clearly demonstrated that the basefunding is insufficient given the scale of the proposeddevelopments.

The NRTEE sees the IRMA Program as playing avaluable role in supporting Aboriginal participation inconsultation processes. It allows Aboriginal communitiesthat face particularly severe resource constraints toparticipate at critical stages in land and resource manage-ment processes. As such, the IRMA Program makes animportant contribution to meaningful Aboriginalinvolvement in decision making regarding non-renewableresource development in the NWT.

Two significant concerns regarding the IRMAProgram were, however, brought to the NRTEE’s atten-tion. First, this program is scheduled to expire 31 March2001. Second, the current budget of $1.5 million appearsinsufficient to meet the needs of eligible applicants forthese funds. Given the success of the IRMA Programand the ongoing needs that it meets, the NRTEE rec-ommends that:

The Department of Indian Affairs and

Northern Development should continue the

Interim Resource Management Assistance Program

until all land claims are settled within the NWT.

The Department should conduct a yearly review

and adjustment of this program’s budget to ensure

that it is able to fulfil adequately its mandate of

supporting Aboriginal participation in consulta-

tions and other processes in non-settlement areas.

Funding Mechanism for Consultation on Major ProjectsConsultations relating to major non-renewable resourceprojects in the North place tremendous demands on allparticipants. Projects such as diamond mines and pipelinesare by their very nature complex and controversial.Consultation begins at the early planning stages andcontinues throughout the project review and regulatoryprocesses and into the operational phase. The consultationprocesses associated with these projects threaten tooverwhelm the organizations concerned with non-renewable resource development and related issues.

Aboriginal organizations and governments face par-ticular difficulties as they attempt to participate in themultitude of formal processes and informal negotiationsassociated with major projects. Access to expertise in avariety of areas is essential if they are to understand andrespond to the large volume of technical material con-tained in project applications. The broader policy andstrategic questions raised by these projects also placeheavy demands on Aboriginal leadership. All of thesedemands come on top of the routine matters that have,in many cases, already stretched Aboriginal capacity tothe limit.

Intervener funding at the environmental assessmentstage and specific initiatives such as the continuation ofthe IRMA Program would help address some of theneeds of Aboriginal communities in relation to majorprojects. The consultation processes for these projects,however, go far beyond direct participation in environ-mental assessment hearings. Furthermore, the need ofAboriginal communities for additional support in thiscontext is by no means confined to areas of unsettledland claims.

Major projects are vitally important to non-renew-able resource development in the North. Aboriginalcommunities and government departments have recentexperience with two diamond mines, and there are othermines, oil and gas projects, and pipelines on the horizon.The NRTEE is concerned that existing core resourcesare insufficient to support the consultation effort that isrequired for these projects. It therefore recommendsthat:

The Government of Canada should establish

a $15-million funding mechanism over three

years, to be administered by the Department of

Indian Affairs and Northern Development, to facili-

tate the participation of Aboriginal organizations

and Aboriginal governments in consultation

processes associated with large non-renewable

resource development projects in the three northern

territories. This funding should be available prior

to the intervener funding that is provided under the

environmental assessment and regulatory processes

that apply to these projects.

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C h a p t e r E i g h tC h a p t e r E i g h t

88

Sustainable AboriginalCommunities in the Long Term

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Aboriginal Communities and Non-renewable Resource Development Sustainable Aboriginal Communities in the Long Term

Distribution of Benefits, Economic Diversification and Resource DepletionThe NRTEE’s indicators of sustainable Aboriginalcommunities include explicit reference to equity — thefair distribution of costs and benefits within and amongcommunities, between communities and developers, andacross different economic interests and generations.Non-renewable resource development is not consistentwith the NRTEE’s vision of sustainable Aboriginalcommunities if it results in the creation of “have” and“have not” communities, with benefits flowing only tothose that are geographically close to projects or havethe greatest ability to capitalize on opportunities at theexpense of others. Equity requires measures to addressthe needs of those who do not share in the immediateeconomic spinoffs of development.

Distributional issues can also have very practicalpolitical implications. Groups that feel excluded from thebenefits of non-renewable resource development arelikely to be either indifferent or hostile to project pro-posals. If excluded groups also bear significant costs as aresult of these projects, hostile reactions are inevitable.A failure to address equity issues will therefore under-mine broad-based support for non-renewable resourcedevelopment among Aboriginal communities.

Governments will find themselves under intense pressurefrom supporters and opponents of development.Societal tensions will rise, and the climate for investmentwill inevitably be adversely affected.

The need to diversify the economic base forAboriginal communities is a second concern. Regardlessof how promising the future looks today for diamondmining and the oil and gas sector, a one-track strategyfor sustainability is risky over the long term. Economicand market conditions change with time, leading toboom-and-bust cycles in non-renewable resource sectors.The NRTEE recognizes that efforts should be made todiversify the economic basis for sustainability so that thewell-being of Aboriginal communities does not dependentirely on a single project or sector. Non-renewableresource development can and should provide tangiblesupport to these diversification efforts.

A third concern is captured by the question: What isleft after non-renewable resources are gone? Even if astrong economy and favourable market conditions overmany decades smooth out the boom-and-bust rollercoaster, eventually key mineral deposits and oil and gasreserves will be depleted. In fact, one reason forincreased interest in northern oil and gas is the decline inreserves in Alberta. The faster development occurs inthe NWT, the sooner the inevitable decline in reserveswill begin.

A boriginal people view their relationship with the land as extending over

seven generations. Ensuring that Aboriginal communities are truly sustainable therefore requires a

long-term perspective. As already discussed in the section The Role for Non-renewable Resource

Development, the NRTEE’s vision of sustainable Aboriginal communities is based on a realistic

assessment of the role to be played by the mining and oil and gas sectors. While these sectors offer

tremendous potential at the present time, the NRTEE’s consultations and Task Force discussions

identified three principal concerns for the longer term. These concerns focus on the

distribution of benefits, economic diversification and resource depletion.

Sustainable Aboriginal Communities in the Long Term Aboriginal Communities and Non-renewable Resource Development

88

Economic Diversification and Long-Term Benefits from Non-renewableResource Development — NRTEERecommendationsThe NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program does not havea mandate to address broad issues of social equity or topropose an overall economic diversification strategy forthe NWT. The NRTEE’s consultations and researchhave, however, examined two measures that have realpotential to ensure that mining and oil and gas activitytoday will produce an equitable distribution of benefitsand promote broader economic diversification into thefuture. These measures are the creation of a savings andeconomic diversification fund and the establishment ofmechanisms for Aboriginal equity participation innon-renewable resource development, includinginfrastructure projects.

Savings and Economic Diversification FundThe idea behind savings and diversification funds is asimple one. A “rainy day” or “tomorrow” fund is builtup over time by diverting a portion of non-renewableresource revenue from current expenditures. The fund isthen managed in order to achieve a mix of objectives

that can include 1) creating and preserving capital assets,2) distributing the benefits from non-renewable resourcedevelopment broadly throughout society or to specificgroups or initiatives, 3) promoting economic diversificationand 4) ensuring a stream of income into the future.

In the same way that individuals save and invest inorder to provide themselves with economic security andlifestyle options following retirement, governments canset aside a portion of current revenue for the day whenthese revenues may no longer flow with the same abun-dance. The case for savings is particularly strong whenrevenue is produced by finite resources. Saving in timesof economic surplus also helps to prevent individualsand governments from growing accustomed to livingbeyond their means. An economy “addicted” to non-renewable resource revenue may suffer severe withdrawalsymptoms if the revenue stream diminishes significantly.Allocating money to a savings and economic diversifica-tion fund reminds everyone that non-renewableresources and economic booms do not last forever.

Savings and diversification funds have been estab-lished in both Alberta and Alaska with revenue fromnon-renewable resources. These arrangements are some-times characterized as “trust funds,” which implies thecareful management of assets for specified purposes orbeneficiaries. Formal restrictions on fund managers aresometimes imposed. Investment criteria and the purposesfor which capital and income may be used can vary.Money allocated to these funds may be invested directlyin specific projects in order to promote economic diver-sification and reach intended beneficiaries. Alternatively,funds may be used to create a portfolio of investmentsthat have long-term potential for income generation andcapital gains. Under this model, capital is preserved overtime and only income on the fund — after inflation-proofing of the capital amount — is used for specificinitiatives.

There is no single formula for savings and diversifi-cation funds. Each model has advantages and disadvantages.There are differing views, for example, on the impor-tance of limiting the discretion of fund managers.Removing the temptation to use funds for short-termpolitical purposes may entail restrictions that govern-ments and other organizations are reluctant to accept.Further research on options and a detailed examinationof the experience of other jurisdictions is necessarybefore choosing a specific model for the NWT.

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Support is growing in the NWT for a savings andeconomic diversification fund. The Economic StrategyPanel proposed the creation of “a[n] NWT fund, fromfuture resource revenues, to assist in diversification ofthe NWT economy.”85 The GNWT’s Non-renewableResource Strategy recommends “developing options todivert a portion of non-renewable resource revenueinto long-term savings plans.”86 The GNWT’s rationalefor this proposal is as follows:

The Northwest Territories has a wealth of mineral andpetroleum resources. However, focusing development exclu-sively on the non-renewable resource sector will leave oureconomy vulnerable to world market forces in a smallnumber of commodities. There is also a need to ensurethat as mineral resources are depleted, a financial legacy isleft for future generations. There are opportunities in abroad number of sectors that need continued attention toensure long-term stability and growth. The long-termhealth of our economy will be directly related to our abili-ty to maximize the benefits available from a robustresource sector while setting the stage for more balancedgrowth in other sectors.87

The GNWT’s strategy also cites recent recommen-dations from the Canada West Foundation that “stressthe need for public sector savings to be achieved fromresource revenues, and the need to use these savings tocreate an economic environment favourable to growth.”88

Alberta’s Heritage Savings and Trust Fund and theAlaska Permanent Fund are noted as possible models.The GNWT recommends further research on experiencein other jurisdictions and concludes that “any approachto investment of resource revenues in a public savingsfund will have to be developed in partnership withAboriginal governments, in order to determine whetherco-operative approaches are optimal.”89

The NRTEE is fully aware of the sensitivities sur-rounding non-renewable resource revenues in the NWT.The division of resource revenue among the federalgovernment, the GNWT and Aboriginal governments isparticularly contentious. Aboriginal beneficiaries underland claim agreements also face extremely complexissues when determining how to allocate non-renewableresource revenues now and in the future. Any proposalabout specific uses for resource revenue requires carefulconsideration.

The NRTEE nonetheless strongly supports theestablishment of a savings and diversification fund as ameans of addressing important issues such as equitabledistribution, economic diversification and resourcedepletion, which must be confronted if non-renewableresources are to contribute to the sustainability ofAboriginal communities. Given the current political cli-mate, the NRTEE underlines that this proposal is abouthow resource revenues are used over the long term, notabout who receives them in the first instance. The issuesraised by the proposal for a savings and economicdiversification fund are therefore distinct from currentpolitical controversy over resource revenue sharing.

The possibility of allocating a portion of the rev-enue stream from non-renewable resources to a savingsand economic diversification fund is one that all threeorders of government in the NWT could consider aspart of their ongoing discussions. The NRTEE there-fore recommends that:

All parties to the Intergovernmental Forum

should devise a mechanism for allocating a

portion of government resource revenue to create a

savings and economic diversification fund, the pur-

pose of which would be to promote long-term

sustainability for Aboriginal communities and for

the NWT as a whole.

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Aboriginal Equity ParticipationAboriginal equity participation in major resource projects— notably pipelines — and in the companies thatprovide goods and services to resource developers is apromising means of securing long-term benefits fromnon-renewable resources. Experience with equity partici-pation is increasing in the North. Major projects, suchas pipelines connecting Arctic gas to southern markets,would provide tremendous new opportunities. TheNRTEE’s Aboriginal Communities and Non-renewableResource Development Program has confirmed broad-based support for increased Aboriginal equityparticipation in northern non-renewable resource devel-opment.

A number of successful Aboriginal-owned corpora-tions and joint ventures are already active in the miningand oil and gas sectors. Pipeline development is anotherarea of increasing equity participation. The Acho DeneKoe First Nation in Ford Liard has secured equity posi-tions in two pipeline projects through partnerships withthe Liard Valley Producers Group, led by Chevron, andwith Paramount Resources on the Shiha Pipeline project.The Inuvialuit Regional Corporation is a partner in theIkhil Gas Project, which supplies the town of Inuvikwith natural gas.

Equity participation means thatAboriginal people will have directownership in non-renewableresource development. In legaland financial terms, ownershipmeans direct proprietary inter-ests in companies andprojects. More broadly, how-ever, Aboriginal ownershipwill include a sense of com-mitment, direct involvementand partnership with others inthe development of the NWT’snon-renewable resources. Aboriginal com-munities will be part of the process,not simply its beneficiaries.

Equity participation, however, isnot free of risk: capital invested inprojects or companies will not alwaysgenerate a positive rate of return. Whatequity investment does provide is adirect claim to financial benefits fromnon-renewable resource development

and a direct say in how development occurs. This type ofinvolvement is particularly attractive for projects, such aspipelines, that have a long-term potential for wealth cre-ation but are likely to provide relatively few employmentand business opportunities for Aboriginal people andother northerners following the construction phase.

The revenue and more intangible benefits that flowfrom equity participation can support the long-term sus-tainability of Aboriginal communities in two main ways.First, the funds generated from Aboriginal equity stakesin projects and businesses could be used to ensure abroader distribution of benefits from non-renewableresource development, to promote economic diversificationand to finance investments (e.g., savings and economicdiversification funds) that could provide a financial basisfor sustainable Aboriginal communities following deple-tion of non-renewable resources. Equity participation isthus a means of addressing the three key issues of distri-butional fairness, economic diversification and resourcedepletion that are raised by reliance on non-renewableresource development to lever long-term sustainability.

Second, practical experience with equity ownership islikely to help build and diversify Aboriginal entrepreneurial,financial, management and administrative capacity.

Business skills acquired through equity participation innon-renewable resource development will be

transferable to other sectors. Aboriginalcommunities will gain expertise and an

increased sense of economic self-confidence and self-determinationfrom their experience with Aboriginal-owned corporations, joint venturesand equity stakes in major projects.Equity participation thus providesAboriginal communities with another

vehicle to achieve long-term sustain-ability by building capacity through

non-renewable resource development.There are, however, significant obstacles

to increased Aboriginal equity participation innon-renewable resource development. Accessto capital is a major problem. Expertise isalso necessary to assist Aboriginal communitiesand organizations in structuring the legal, taxand corporate governance aspects of equityinvolvement. Additional research on innovativecorporate structures and financing arrangementsis required.

Aboriginal youth must

stay in school longer at

the elementary, secondary

and post-secondary levels.

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Aboriginal Communities and Non-renewable Resource Development Sustainable Aboriginal Communities in the Long Term

Government has two critically important roles toplay. First, it should provide a clear policy framework tosupport increased Aboriginal equity participation in non-renewable resource development. Second, it shouldindicate the extent of direct financing, loan guarantees orother forms of assistance that it will provide to promotethis objective in a tangible manner. The government’spolicy framework and financial support for Aboriginalequity participation should, of course, be developed inclose collaboration with industry and with Aboriginalorganizations and governments.

Equity participation by Aboriginal communities andother northerners in non-renewable resource projectshas been recommended in several recent reports. TheEconomic Strategy Panel noted that an equity position ina Mackenzie Valley pipeline could provide NWT resi-dents with a substantial source of tariff revenues. It alsoidentified the promotion of equity participation as a keymeans of maximizing the benefits to northerners ofnon-renewable resource development.90

The Joint Aboriginal-Industry Resource DevelopmentWorkshop recommended a major program to increaseAboriginal corporate capacity.91 The program includesfinancial support to Aboriginal development corpora-tions for feasibility studies and business planning, theestablishment of partnerships and joint ventures withresource developers, and the due diligence assessmentof mining and oil and gas properties. These measureswould enhance the ability of Aboriginal organizations totake equity stakes in businesses and projects linked to thenon-renewable resource sectors. The required budget isapproximately $5 million over the next five years.

The GNWT’s Non-renewable Resource Strategyincludes a four-year initiative intended to “support long-term wealth creation through northern equityparticipation in oil and gas infrastructure.”92 The particu-lar focus is to support the Aboriginal Pipeline Group insecuring an equity interest in the proposed MackenzieValley gas pipeline. This initiative is expected to:

• provide financial support in the early stages forassessing technical, legal and business advice;

• undertake research to facilitate an understanding ofsimilar arrangements in other jurisdictions and bestpractices for equity participation;

• work with industry to facilitate an understanding ofthe northern business environment and the currentfiscal benefits that accrue to northerners; and

• examine innovative tolling and financing arrangementsto help facilitate Aboriginal equity participation inpipeline infrastructure development.93

A four-year budget of $1.6 million is proposed by theGNWT.

The Minister of Indian Affairs and NorthernDevelopment, Robert Nault, has confirmed thatincreased Aboriginal equity participation in resourcedevelopment and other business ventures is a priorityfor the Government of Canada. In a speech delivered inWinnipeg 18 May 2000, Minister Nault described chal-lenges and opportunities relating to Aboriginal economicdevelopment. In particular, he noted that Aboriginalcommunities lack the resources to become true businesspartners in large-scale development. The Minister thenoutlined the following strategic direction:

As Canada’s economy continues to grow, I believe thereare going to be a great number of opportunities for thesecommunities to become equity partners in major ventures.This is especially true of the resource sector, where numer-ous large-scale oil and gas, mining, and forestry projectsare starting to come together — many of them within tra-ditional lands and territories.

First Nations and Inuit are going to be heavily involvedin projects. So why should they not also derive the kind ofbenefits we associate with equity positions? Not onlywould the communities benefit financially, the climate ofstability would attract further investments.

From my discussions with First Nations and Inuit lead-ers, I know they are looking for more than economicspinoffs when resource development occurs in their tradi-tional lands. While agreements on employmentopportunities, subcontracting, and training are welcome,they are only part of the picture. I believe we need toexpand our efforts so that First Nations and Inuit canbecome partners in the true business sense of the word.That is, they need to be able to take equity positions indevelopments.94

As a tangible contribution to achieving this goal,Minister Nault confirmed the availability throughDIAND’s Opportunity Fund of $10.5 million for the2000-2001 fiscal year to support Aboriginal equity par-ticipation. The Minister also promised additionalfunding for subsequent years.


92

The Department of Indian Affairs and

Northern Development should monitor, on a

yearly basis, the demand for capital to support

Aboriginal equity participation in northern non-

renewable resource development, including

infrastructure projects, and should adjust the avail-

able funding levels accordingly to ensure that

Aboriginal communities can secure equity stakes in

major projects.

The NRTEE commends Minister Nault for hisvision and initiative in establishing a national program topromote Aboriginal equity participation. The NRTEE isconcerned, however, that the funds available for thispurpose in the North will be inadequate to meet the pro-jected needs. Equity participation can make a majorcontribution to the long-term sustainability ofAboriginal communities in northern Canada. Pipelineprojects appear to offer particularly promising opportu-nities at the present time, as shown by the experience inthe Fort Liard area and the preliminary work of theAboriginal Pipeline Group. With a number of large-scale resource development and pipeline projects on thehorizon, significant financial support for Aboriginalequity participation in northern non-renewable resourcedevelopment is required now. The NRTEE thereforerecommends that:

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The “Free Entry” System —Divergence Among Key Players

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Aboriginal Communities and Non-renewable Resource Development The “Free Entry” System — Divergence Among Key Players

The basic principles of free entry under the CanadaMining Regulations apply throughout the NWT, exceptwhere subsurface minerals are owned by Aboriginal peo-ple. Where land claims are settled, the surface rights andaccess provisions of land claim agreements take priorityover the “surface holder” compensation provisions inthe Canada Mining Regulations.

The free entry system is sometimes characterized asguaranteeing a “right to mine.” It does allow individualsand companies to acquire ownership rights in subsurfaceminerals and exclusive rights to undertake explorationand development within staked mineral claims. Theholder of a mining lease is not, however, permitted toproceed automatically to production without satisfying

further regulatory requirements. A leaseholder is subjectto all laws of general application, including environmen-tal and resource management laws. Bringing a mine intoproduction requires submitting the project proposal toenvironmental assessment and obtaining a water licenceand a surface lease. Recent practice suggests that, formajor projects, resource developers must also negotiatean environmental agreement with regulators, a socio-eco-nomic agreement with the GNWT, and impact andbenefits agreements with Aboriginal organizations.

The debate about free entry centres on the implica-tions for Aboriginal communities of the “rights”established under this system. Views differ as to thenature of these rights and their practical consequences

T he “free entry” system was the subject of vigorous debate throughout the

consultations and Task Force discussions of the Aboriginal Communities and Non-renewable Resource

Development Program. This system is established by the Canada Mining Regulations and applies to land

access and tenure arrangements for mining. In particular, it sets the rules for acquiring title to

Crown-owned minerals. The four key features of the free entry system are:

• · the right of prospectors to enter most lands containing Crown-owned minerals in order

to undertake mineral exploration;

• · the right of prospectors to acquire mineral rights by properly staking a claim and hav-

ing it recorded with the mining recorder;

• · the exclusive right of the claim holder to carry out further exploration and develop-

ment within the area covered by the claim; and

• · the right of the claim holder to obtain a mining lease — the tenure instrument

required to undertake mineral production — provided that proper procedures and require-

ments have been complied with.

The “Free Entry” System — Divergence Among Key Players Aboriginal Communities and Non-renewable Resource Development

96

for Aboriginal control over exploration activities andnon-renewable resource development on traditional lands.

The Criticisms of Free EntryCritics of the free entry system see it as a significantimpediment to Aboriginal control over activities ontraditional lands. The strongest opposition to this sys-tem comes from some Aboriginal and environmentalorganizations. They argue that free entry:

• establishes mining as the preferred land use in theNWT, overriding other legislation and policy suchas land use plans, protected area designations andwildlife management regimes;

• restricts the scope for government authorities toexercise their discretion to control exploration activityand the staking of claims, and eliminates discretionto prevent a mineral rights holder from obtaining amining lease as of right;

• may not yield the appropriate levels of economicrent to the owners of Crown and Aboriginal landand resources, since rights allocation under freeentry is based on priority of staking in time anddoes not incorporate price differentials reflectingeither the mineral potential of claims as revealedthrough publicly funded information (e.g., providedby the Geological Survey of Canada) or the expect-ed value of the land to the individuals or companiesstaking the claims;

• has the effect of subordinating the interests and val-ues of Aboriginal communities regarding land useissues to the interests of the mining industry; and

• is inconsistent with Aboriginal rights and with theprinciple of Aboriginal participation in decisionmaking on resource development because itincludes no requirement for consultation withAboriginal communities during the processes ofacquiring and exercising rights of land access andmineral ownership.

For critics of free entry, addressing the defects that theysee in this system is essential to promoting sustainabledevelopment and ensuring Aboriginal control over theuse of land and resources. The arguments that freeentry is inconsistent with the fundamental principles ofsustainability and Aboriginal self-determination are cen-tral to their critique.

The arguments relating to sustainable developmentare framed in terms of “balance” and can be summa-rized as follows. Sustainable development, from itsearliest discussions, has sought to balance economy andenvironment. It is not about the primacy of a singleresource and its use. Free entry is the antithesis of balancebecause it establishes, at the very outset, the primacy ofmineral exploration and development in the hierarchy ofland and resource uses. At present, the only way to off-set this imbalance is to withdraw lands from industrialuse through an order-in-council issued by the federalgovernment — an instrument that is as blunt as the freeentry system itself. The existence of respective systemscancelling each other out is consistent with a vision of

The basic principles of free entry under the Canada

Mining Regulations apply throughout the NWT,

except where subsurface minerals are owned by

Aboriginal people.

97


sustaining one kind of resource use at theexpense of others, as opposed to givingfair and balanced consideration to thefull range of land uses. This rangeof potential land uses shouldinclude sustainable ones — suchas trapping, subsistence harvest-ing, tourism, eco-tourism,outfitting, nature appreciation andbird watching — that depend onhealthy ecosystems and wildlifepopulations. Currently, virtually alllands are open to mining not becausethey should be but because this is thedefault response of government under thefree entry system. Sustainable develop-ment, it is argued, requires a morenuanced approach.

The critique of free entry relating toAboriginal self-determination focuses par-ticularly on the need for greater Aboriginalcontrol over resource development inorder to protect the land use values ofimportance to Aboriginal people. In sub-missions by NRTEE Task Force members and other keyplayers, it was argued that the failure to engage legitimateAboriginal interests in all phases of mineral explorationand development has been a serious problem. In particu-lar, Aboriginal interests are too often not engaged at allat the initial exploration phase of project development.Land claims have, to a certain extent, addressed theseconcerns. However, it is essential to maintain a widerperspective when considering the impacts of develop-ment on Aboriginal interests.

The critics of free entry note that industrial activity,whether on Aboriginal or non-Aboriginal land, has his-torically fragmented landscapes and disrupted ecosystemprocesses. Aboriginal communities have a strong interestin a future that includes the sustainable use of renewableresources. Ecosystem-based approaches to project plan-ning, impact identification and management, along withmonitoring, evaluation and mitigation, will therefore berequired for land and resource management. Issues relat-ing to land fragmentation, wildlife migrations andwatershed quality can only be dealt with effectively on anecosystem basis. The coexistence of free entry and landclaim agreements does not, it is argued, meet the needsof ecosystem-based management. Aboriginal control

over only part of the land and water may besmall comfort in the face of ecosystem-

wide damage, since renewableresources can as easily be threat-ened by free entry onnon-Aboriginal land as onAboriginal land. As a result, thesite-specific and reactive regula-tory regimes for mining —including the free entry system —

should be replaced with alternativearrangements that would facilitate

Aboriginal self-determination, notablyin the area of protecting the ecosystem-wide values that may be threatened bymineral exploration and development.

In addition to raising fundamentalconcerns regarding sustainable develop-ment and Aboriginal self-determination,critics of free entry highlight severalspecific deficiencies with respect to thefree entry system and its relationship toland and resource management. Theythen suggest practical solutions. The crit-

ics argue, for example, that legal analyses of free entryprovisions and case law on Aboriginal rights are con-tributing to uncertainty regarding tenure and access, amatter of central concern to the mining industry,Aboriginal communities and other key players.Clarification of these issues through a full, open andtransparent review of the free entry system would, it isargued, be in everyone’s interest. The critics also arguethat broader reform of the free entry system and othereconomic, environmental and land use legislation isrequired, notably to establish a balanced and legally bind-ing land use planning process that accommodates allvalues and interests before land use decisions are made.The defects of free entry are, from the critics’ perspec-tive, aggravated by deficiencies in the overall regime forland and resource management.

Finally, critics of free entry note that variations onthis system are used in other jurisdictions. For example,map staking is used in Newfoundland and Labrador.While still a version of free entry, map staking avoids theimpacts of land staking, which can be considerable inmajor staking rushes such as those witnessed recently inthe NWT, Nunavut and Labrador. Nunavut now has apermitting system under which companies and individuals

It is essential to main-

tain a wider perspective

when considering the

impacts of development

on Aboriginal interests.


98

nominate areas for mineral exploration. This systemgives the Aboriginal communities affected by mineralexploration the power to review nominated areas priorto the granting of approvals. Australia has adopted a“concession” system as a means of giving governmentgreater discretion to impose order on the disposition ofmineral lands.

In their submissions to the NRTEE process andtheir contributions to Task Force discussions, critics offree entry advocated a series of specific initiatives aimedat laying the groundwork for amendments to the accessand tenure provisions of Canadian mining legislation.One proposal was to compare the access and tenure pro-visions in oil and gas legislation with those in mining law.The objectives would be to explore the consequencesof each regime for Aboriginal communities and forthe environment, and to document the views ofAboriginal communities on these issues. An analysis

of implementation strategies for alternatives to the freeentry system was also recommended. Finally, critics offree entry argued that a full national review of minerallands disposition, focusing particularly on the free entrysystem, should be undertaken as soon as possible by anindependent body. Broad terms of reference, openness toparticipation and transparency of process were identifiedas the key ingredients to ensure the success of thisreview.

The ResponseSupporters of free entry respond to critics in two ways.The mining industry, in particular, argues that the freeentry system is fundamental to mining in the NWT.Industry views the rights established under the CanadaMining Regulations as creating the confidence and incen-tives that are necessary for the industry to operate inthe NWT. Free entry is seen as providing a measure ofcertainty regarding access and tenure. It also maintains

diversity in the industry by encouraging inde-pendent prospectors and junior companies.

The case for free entry also rests on the argumentthat the critics misunderstand its significance within theoverall regulatory regime for mining and exaggerate theextent and implications of the “rights” that it establishes.The supporters of free entry argue that:

• the practical significance of rights established underthe Canada Mining Regulations can only be judged bylooking at the entire body of environmental regu-lation and other requirements that govern thevarious stages of mineral exploration and develop-ment in the NWT;

• procedures for land withdrawals allow governmentauthorities to prohibit mineral exploration and min-ing activity wherever they determine that it isinappropriate;

• at the exploration stage, the requirement of land usepermits for any activities beyond initial prospectingentails review of activities by affected communitiesand government agencies;

• the right to bring a mineral property into produc-tion upon issuance of a mineral lease is a “fallacy”because obtaining authorization to mine requiresextensive public consultation, successful completion

The site-specific and reactive regulatory

regimes for mining — including the free

entry system — should be replaced with

alternative arrangements that would

facilitate Aboriginal self-determination.

99


of comprehensive environmental reviews, licensingfor specific activities (e.g., water uses), and the nego-tiation of socio-economic, environmental andimpact and benefits agreements — as illustrated bythe recent experiences of BHP and Diavik in gainingauthorization for diamond mines in the NWT; and

• any Aboriginal concerns with the free entry systemare, in any case, being addressed through landclaims, making amendment of the Canada MiningRegulations unnecessary to resolve these issues.

On the basis of these arguments, supporters of the cur-rent system reject the need for initiatives directed atamending the basic free entry provisions of the CanadaMining Regulations.

Aboriginal PerspectivesAs noted above, some Aboriginal organizations haveexpressed very strong opposition to the free entry sys-tem in the NWT. These views were forcefully stated byrepresentatives of the Deh Cho First Nations and theLutsel K’e Dene First Nation. A particular concern isthe ability of prospectors to enter traditional lands andacquire mineral claims without consulting First Nations.In consultations under the NRTEE’s AboriginalCommunities and Non-renewable ResourceDevelopment Program, Aboriginal leaders from theDeh Cho Tribal Council, the Lutsel K’e Dene Band andrepresentatives from other areas of unsettled land claimsexpressed frustration with their lack of control over theissuance of land use permits by DIAND. Aboriginalpeople, they argued, should have direct decision-mak-ing authority concerning the availability of land forstaking. They attribute their inability to exercise controlover prospecting and mineral development on tradition-al lands in part to the rights and procedures establishedpursuant to the free entry system. More generally, theyview the free entry system as inconsistent withAboriginal title and their treaty rights. Pressures to re-open or develop mines add to the urgency of theirconcerns with the free entry system. The free entry sys-tem is seen as contributing to a pace of development thatis sometimes too fast from the Aboriginal perspective.

The NRTEE’s consultations and Task Force discus-sions revealed, however, that concerns with free entryare not shared by all Aboriginal organizations. Some

Aboriginal representatives took the view that this issue isnot a priority and, in any case, can be adequately dealtwith through land claim processes and the regulatoryregime. Others argued that improved consultation withcommunities at the exploration stage and throughoutresource development would address the principal irri-tants without the need to change mining legislation. It isalso noteworthy that settled land claims in the Northhave recognized and protected the basic elements of thefree entry system, providing industry with relativelyunfettered access up to the point where rights to developminerals are granted.

The level of concern with free entry amongAboriginal people is linked, like so much else, to landclaims. Aboriginal communities in areas of unsettledclaims are particularly vulnerable to exploration anddevelopment activity on their traditional lands. Whereclaims are settled, however, Aboriginal surface and sub-surface ownership rights are secure and mechanisms arein place to give Aboriginal communities more of a rolein decision making regarding mineral exploration anddevelopment.

There is, therefore, no single Aboriginal position onthe free entry debate. Aboriginal people are united inseeking greater control over non-renewable resourcedevelopment on their traditional lands. They differ, how-ever, on whether the Canada Mining Regulations and thefree entry system as currently practised in the NWT areobstacles to achieving this objective.

Free Entry — The NRTEE’s PositionThe NRTEE recognizes that certain Aboriginal organi-zations and other key players in the North arefundamentally opposed to the free entry system formining that is enshrined in the Canada MiningRegulations. These concerns were clearly and articulatelyexpressed in consultations and Task Force discussionsthroughout the Aboriginal Communities and Non-renewable Resource Development Program. At thesame time, the NRTEE has heard strong support forthis system from industry representatives. Within gov-ernments, there appears to be little or no support for amajor reform of the Canada Mining Regulations at thistime. The NRTEE notes, as well, that concerns withfree entry are not shared by all Aboriginal organizations.


100

Faced with this divergence of views on how toproceed, the NRTEE is unable to present a consensusrecommendation dealing with the free entry system formining. There is clearly a need for all interested partiesto continue to work toward a constructive resolution ofthe contentious and complex issues raised by free entryin the North.

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C h a p t e r T e nC h a p t e r T e n

1010

Conclusion

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Aboriginal Communities and Non-renewable Resource Development Conclusion

Non-renewable resource development also brings with itsignificant risks. Unless development is properly man-aged, it can seriously undermine the environmental,social, cultural and spiritual foundations of Aboriginalcommunities. Minimizing these risks is therefore essen-tial if the development of non-renewable resources andsustainable Aboriginal communities are to coexist in theNWT and throughout northern Canada.

The recommendations set out above are directed tomaximizing the benefits and minimizing the risks ofnon-renewable resource development for Aboriginalcommunities. The proposed strategy has five principalcomponents. First, the development and implementationof an integrated policy framework for cumulative effectsmanagement is necessary to address the risks toAboriginal communities of multiple resource projectsand their related infrastructure. Second, the climate forinvestment in the North’s non-renewable resource sectorsshould be improved in order to secure the economicbase for levering a sustainable future. Third, action isrequired to address the needs of Aboriginal communities

in the critically important area of capacity building.Fourth, Aboriginal participation in consultationprocesses should be supported, since these processesare the key to meaningful involvement in decisionmaking regarding non-renewable resource development.Finally, specific measures should be taken to ensure thatnon-renewable resource development provides a basisfor long-term sustainability.

This report reflects the wisdom and practicalinsights gathered through the extensive research andconsultation undertaken by the NRTEE’s AboriginalCommunities and Non-renewable Resource DevelopmentProgram. The recommendations presented here areintended to guide government, Aboriginal communities,industry and all key players down a path that leads to thevision of sustainable Aboriginal communities developedby the NRTEE Program’s multi-representational TaskForce. The NRTEE urges everyone with an interest innon-renewable resource development in the North towork in partnership in order to make that vision a reality.

Non-renewable resource development in the North has the potential to

generate significant economic benefits for Aboriginal people, other northerners and all Canadians.

These benefits will not, however, flow automatically to Aboriginal communities. Non-renewable

resources will contribute to the sustainability of Aboriginal communities only if those communities

are able to take advantage of the opportunities that arise from resource development.

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A p p e n d i c e sA p p e n d i c e s

107

Aboriginal Human Resources Council of CanadaHall, Craig: National Director, Partnership Strategies

ADK Holdings Ltd.Parrish, Shane: General Manager

Akita DrillingHunt, R.J. (Rob): Vice-President, Sales & Marketing

Aklavik Indian BandFurlong, Charlie: Chief (NRTEE Aboriginal Task ForceMember)

Assembly of First NationsArnott, Siobhan: A/Director, Environment Unit (nowPolicy Advisor, NRTEE)Booth, Dale: (formerly) CEO & Director, EconomicDevelopment Fontaine, Phil: (formerly) National ChiefMcGregor, Alexandra: Policy Analyst, Environment &Health

Aurora CollegeEvans, Maurice: President

Begade ShotagotineMendo, Maurice

Behdzi Ahda’ First NationKochon, Richard: Chief

Berkley Petroleum CorporationWalsh, Ann

Calvin D. Helin Personal Law CorporationHelin, Calvin D.: Lawyer

Canadian Aboriginal Mining AssociationMatthews, Hans: PresidentMcGregor, Larry: Environmental Officer

Canadian Arctic Resources CommitteeKeith, Robbie: Executive Director (now retired) (NRTEEAboriginal Task Force Member)O’Reilly, Kevin: Research Director

Canadian Association of Oilwell DrillingContractorsHerring, Don: Managing Director

Canadian Association of Petroleum ProducersAlvarez, Pierre: PresidentManning, David: President (now past)Nepinak, Michael: Manager, Aboriginal AffairsPierce, Chris: Vice-President, Strategic Planning

Canadian Council for Human Resources in theEnvironment IndustryTrump, Grant S.: Executive Director & CEO

Canadian Energy Pipeline AssociationStowkovy, Bonnie: Manager, Environment &Transportation

Canadian Energy Research InstituteCoad, Leonard: Vice-President, North American NaturalGas & ElectricityTanner, Jim: Research Associate, Environment-Energy

Canadian Environmental Assessment AgencyArseneau, Jean: Director, Policy Analysis (now withIndustry Canada)Saunders, Kurt: (formerly) Policy Analysis DirectorateSherhols, Peter: Director, Policy Analysis

Canadian Institute for Resources LawDonihee, John: Research AssociateKennett, Steve: Research Associate

Canadian International Development AgencyBreault, Guy: Senior Policy Analyst, PolicyCoordination/YDC DivisionCroal, Peter: Senior Environment Specialist,Environmental Assessment & Compliance Unit

Canadian Nature FederationMacNamee, Kevin: Director, Wetlands Program

Chevron Canada ResourcesLehr, Lynn: Senior Landman, Western Canada BusinessUnit (NRTEE Aboriginal Task Force Member)

Note: This program was carried out over a number of years, and some participants’titles/organizations may have changed during that time.

Program Participants

AAA p p e n d i x

Appendix A Aboriginal Communities and Non-renewable Resource Development

108

COMINCO Ltd.Parker, David: Manager, Regulatory & Public Affairs

Compass ConsultingKer, Alexandra: Consultant

Congress of Aboriginal PeoplesPalmater, Frank: Vice-President

Dechi Laot’i CouncilJudas, Joseph: Chief

Deh Cho Tribal CouncilNadli, Mike: Regional Vice-Chief

Deline First NationBayha, Danny

Denendeh Development CorporationBekale, John: President

Dene Nation — Denendeh National OfficeArmstrong, Allison: Environment CoordinatorBailey Hopf, Greg: Youth and Recreation ProgramsCoordinatorErasmus, Bill: National Chief

Denendeh Youth Committee MembersAkaitcho RepresentativesBeaver, Regan: Fort SmithGuild, Travis: Fort ResolutionMarlowe, Veronica: Lut’sel’keDeh Cho Representatives Ekanalie, Hanna: Trout LakeJumbo, Caroline: Trout LakeJumbo, Rebecca: Trout LakeDogrib RepresentativesFootball, Adeline: Snare LakeLamoulle, Jasper: RaeRabesca, Charlene: RaeGwichin Representatives Gardlund, Inga: AklavikMcLeod, Kristine: InuvikPascal, Jackie: Fort MacPhersonSahtu Representatives Edgi, Audrey: Fort Good HopePierrot, Judith: Fort Good HopePierrot, Verna: Fort Good Hope

Deninu K-ue First NationBoucher, Maurice

Department of Foreign Affairs & InternationalTradeBrennan, Patrick: Policy Analyst, Aboriginal &Circumpolar AffairsLord, Wayne: Director, Aboriginal & Circumpolar Affairs

Department of Indian Affairs & NorthernDevelopmentArcand, George: Associate Regional Director General,Alberta RegionAtiomo, Emmanuel: Resource Management AdvisorBannon, Peter: (formerly) Director, Policy & Planning,NT RegionBeaubier, Hiram: Director General, Natural Resources &EnvironmentBecker, Brenda: Land Specialist Claims Negotiations, NTRegionBrant, Dan: (formerly) Senior Policy Advisor, AboriginalAffairsDecary, Michel: Executive Assistant, Minister of DIANDFortier, Mimi: Director, Northern Oil & Gas DirectorateGreenall, Wayne: Benefits Advisor, Northern Oil & GasHearn, Kate: Director, Mineral Resources Directorate,NT Region Hume, Valerie: Policy Coordinator, SustainableDevelopment, Resource Planning & ConservationLivingstone, David: Director, Renewable Resources &Environment Directorate, NT RegionMatthews, Lorne: Mineral Development Advisor, NTRegionMcIvor, Elaine: Environmental Scientist, Environmentand Conservation, NT RegionMcKinstry, Paul: Special Assistant (Northern Affairs),Minister’s OfficeMoore, James R.: Assistant Deputy Minister, NorthernAffairs (NRTEE Aboriginal Task Force Member)Murphy, Dan: A/Director, Lands Trusts ServicesPaget, Doug: Chief, Special Projects, Mineral ResourcesDirectorateRelf, Carolyn: Chief Geologist, NWT Geology Division,Co-Manager, C.S. Lord Northern Geoscience CentreRobb, Malcolm: Manager, Mineral Development, NTRegionSacha, Fred: Director, Economic Development &Aboriginal ProcurementSeale, Lorraine: Environmental Management Scientist(Diavik), NT RegionSerafini, Shirley: Deputy MinisterWhitby, Leslie: Director, Environment & RenewableResources Directorate (alternate — NRTEE AboriginalTask Force Member)Williams, Cynthia: Assistant Deputy Minister, Socio-Economic Policy & Program Redesign

Diavik Diamond Mines Inc.Leblanc, Pierre: Project Executive (NRTEE AboriginalTask Force Member)

109

Aboriginal Communities and Non-renewable Resource Development Appendix A

Prest, Stephen: PresidentWilly, Doug: Past Vice-President, Community &Government Affairs (formerly NRTEE Aboriginal TaskForce Member)

Dogrib Treaty 11 CouncilBlondin, Ted: Land Claims Negotiator (NRTEEAboriginal Task Force Member)Camsell-Blondin, Violet: Financial Controller (alternate —NRTEE Aboriginal Task Force Member)Rabesca, Joe: Grand Chief

Dominion Energy CanadaCrowe, Carole: Advisor, Aboriginal & Community Affairs

Ecology NorthO’Brien, Chris: Researcher

Ekati™ Diamond MineDawe, Anne Marie: Training CoordinatorExcell, Jim: President (NRTEE Aboriginal Task ForceMember)Hanks, Chris: Environmental SpecialistWilliams, W. Scott: Manager, Environment, Resource &Planning

Elizabeth Mackenzie Elementary SchoolMatthews, Dave: (formerly) Principal

Enbridge Pipelines Inc.Byrne, Bill: Manager, Northern RegionMilne, Greg: Manager, Safety & EnvironmentRoyer, Lorraine: Manager, Government Relations

Environment CanadaColeman, Tim: Director, Northern Corporate Affairs,Regional OfficeOgilvie, Carey: Environmental Assessment Coordinator,Regional OfficeShea, Elizabeth: Senior Policy AnalystSimon, Linda: Director, Aboriginal AffairsWilson, Peigi: (formerly) Senior Policy Analyst, AboriginalAffairs

Ernie McDonald Land CorporationLennie, Winter: President

Finance CanadaArabackyj, Stephane: EconomistMcCuaig-Johnston, Margaret: General Director, EconomicDevelopment & Corporate FinancePotter, Mark: Chief, Resources, Energy & EnvironmentPryce, Valerie: Policy Analyst, Aboriginal PolicyToms, Bill: Senior Chief, Resource Taxation

Fort Fitzgerald BandBenwall, Howard

Fort Good Hope Metis Nation Local 54 Land CorporationMcNeely, Winston: President

Fort McPherson Metis Local 58Firth, Ernest: President

Fort Providence Metis Local 57Lafferty, Jr., Richard: Board Member

Fort Simpson Metis Local 52Rodh, Albertine: A/President

Franklin GeosciencesFranklin, James: Consulting Geologist

Government of the Northwest TerritoriesBailey, Robert: Assistant Deputy Minister, Operations,Resources, Wildlife and Economic Development(RWED)Emmett, Katherine: Director, Policy, RWEDHandley, Joe: Minister of FinanceKakfwi, Stephen: Premier & Minister of RWEDKube, Phil: Senior Financial Advisor, FinanceLatrides, Gloria: Coordinator, Literacy, Adult BasicEducation; Education, Culture and Employment.Lawrance, James: Special Advisor, Aboriginal RelationsMatthews, Doug: Director, Minerals, Oil & GasMcLeod, Bob: Deputy Minister, RWEDPaquin, Emery: Director, Environmental ProtectionService, RWEDParker, Chuck: Coordinator, Mackenzie ValleyDevelopment Project, RWEDSparling, Gabriela: Assistant Deputy Minister,Intergovernmental Affairs, Department of theExecutive (NRTEE Aboriginal Task Force Member)Stroeder, Celina: Regional Superintendent, RWED

Government of NunavutMcMullen, Jane: Community Minerals Advisor,Department of Sustainable Development

Gulf Heavy OilBachynski, Terry: Manager, Land (now with CanadianForest Oil Ltd.)

Gwich’in Tribal CouncilRoss, Peter Snowshoe, Norman

Hay River Dene ReserveCardinal, DouglasLamalice, Shirley

Appendix A Aboriginal Communities and Non-renewable Resource Development

110

Health CanadaJones, Catherine: Program Issues Officer, Medical ServicesBranchLennon, Keith: Consultant, Year 2000 Project

House of CommonsBlondin-Andrew, Ethel: Secretary of State (Children &Youth)Thorne, Jackie: Executive Assistant

Human Resources Development CanadaMoore, Jeff: Director General, Aboriginal AffairsOliver, Reine: Program Officer, Aboriginal Relations

Imperial Oil ResourcesAnderson, D.J. (Don): Area Manager, Norman WellsOperationsSteinhauer, Roy: Aboriginal Affairs Manager, Projects &Technical Services

Indian Resource CouncilFox, Roy: President

International Council on Metals & the EnvironmentNash, Gary: Secretary-General

Inuit Circumpolar ConferenceFenge, Terry: Director of Research

Inuit Tapirisat of CanadaBraidek, Alan: Executive DirectorLoring, Eric: ResearcherRujas, Aluk: Executive Assistant

Inuvik Metis Local 62McNeil, Bernie: President

Inuvik Native BandGreenland, Barry

J.A. Pirie & Associates Inc.Pirie, James: Principal

Jacques Whitford Environment LimitedGriffiths, Angela: Senior Environmental Analyst

Jean Marie River BandSanguez, Stanley

Ka’a’gee Tu First NationChicot, Lloyd: Chief

Liidli Koe First NationAntoine, JonasCli, Rita: Chief

Lutra Associates Ltd.Little, Lois: Consultant, Principal Partner

Lutselk’e Dene BandCatholique, Florence: Wildlife, Lands & EnvironmentCommitteeLockhart, Felix: Regional Vice-Chief — AkaitchoTerritory & Chief, Lutselk’e Dene First NationParlee, Brenda: Researcher

Mackenzie Valley Environmental Impact ReviewBoardKlein, Heidi: Executive Director

Metis National CouncilIves, Peter: Executive Assistant

Mining Association of CanadaGratton, Pierre: Vice-President, Public Affairs &CommunicationsPeeling, Gordon: President & CEO

Mining Watch CanadaKneen, Jamie: Campaign CoordinatorKuyek, Joan: National Coordinator

Monopros LimitedJoyce, Joe: President & CEOMcKinlay, Todd: Divisional Manager — West

Nahanni Butte BandMarcellais, Peter: Chief

National Energy BoardStewart, John: Environmental Advisor, WEI/TMPL/BC-ALTA

Natural Resources CanadaBurns, Martin: Policy AdvisorCameron, Ric: Assistant Deputy Minister, Energy SectorCampbell, Jim: Director, Economic & Fiscal Analysis,Energy SectorClark, Al: Director, Frontier Lands ManagementClausen, Scott: Sustainable Development PolicyIntegrationJohnstone, Rob: Minerals & Metals Policy, SustainableDevelopment Policy IntegrationLucas, Stephen: A/Senior Director, Strategic Policy andRegional InitiativesPearson, Mark: Director, Sustainable Development &Environment DivisionSeekings, Dan: Policy Advisor, Office of the MinisterSmith, Duncan R.: Advisor, Hydrocarbon Resources,Frontier Lands ManagementThompson, Julie: Minerals & Metals Policy, SustainableDevelopment Policy Integration

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Aboriginal Communities and Non-renewable Resource Development Appendix A

North Slave Metis AllianceCamsell, Ernie: Elder, Rae EdzoDowdall, Robert (Bob): Executive DirectorPaul, Clem: PresidentStevenson, Mark: Professor, University of Alberta, andAdvisor to Metis AllianceTurner, Bob: Manager, Lands & Resources

Northern Canada ConsultingFunston, Bernie: Consultant

Northwest Territories Development CorporationKoe, Fred: President & CEO

Nunavut Environmental Impact Review BoardPokok Aknavigak, Larry: Chairperson (NRTEEAboriginal Task Force Member)

NWT Chamber of MinesVaydik, Mike: General Manager

NWT Community Mobilization PartnershipBrown, Barb: Executive AdvisorVan Tighem, Gordon: Executive Director

Pehdzeh Ki Dene BandMoses, Albert

Peter Eglington Associates Ltd.Eglington, Peter: Principal

Petroleum Services Association of CanadaSoucy, Roger: President

Prime Minister’s OfficeLoveys, Marjory: Senior Advisor, EconomicDevelopment, Policy & Research

Privy Council of CanadaCaron, Fred: Assistant Deputy Minister, AboriginalAffairsStagg, Jack: Assistant Deputy Minister, Economic &Regional DevelopmentThompson, Paul: Policy Officer, Economic & RegionalDevelopmentVincent, Pierre: Policy Officer, Aboriginal Affairs

Prospectors and Developers Association of CanadaAndrews, Tony: Executive Director

Queen’s UniversityDoggett, Michael: Director of Mineral ExplorationProgram, Department of Geological Sciences

Rae Edzo Community Metis RepresentativeDouglas, Sholto

Rae Lakes Dogrib BandWetrade, Archie: Chief

Salt River First NationBeaver, Raymond

South Slave Metis Tribal CouncilHeron, Tim

Suncor EnergyAllan, Randi: Manager, Stakeholder RelationsByl, Margaret: Manager, Heavy Oil Development

Syncrude Canada LimitedLoader, Robert: Manager, Emergency Response & SiteServices

Telit Gwich’in CouncilFirth, William George

Trout Lake BandDeneron, Dennis: Chief

Tssigehtchic Metis Local 63Clark, Mavis: President

West Kitikmeot/Slave StudyMcCullum, John: Study Director

West Point First NationCayen, WendyThomas, Karen: Chief

World Wildlife FundCarpenter, Bill: Regional Director, Arctic Program(NRTEE Aboriginal Task Force Member)Hummel, Monte: PresidentIacobelli, Tony: Senior Manager, Landscape Conservation& Planning, Arctic & North American Programs (alternate — NRTEE Aboriginal Task Force Member)

Yellowknives Dene First Nation (Dettah)Crapeau, RachelEdjericon, Richard: Chief

Yellowknives Dene First Nation (Ndilo)Liske, Peter: Chief

Yukon GovernmentTrudeau, Harley: A/ADM, Intergovernmental Affairs,Executive Council Office (NRTEE Aboriginal TaskForce Member)

113

BBA p p e n d i x

Background Research PapersPrepared for the NRTEE

Arnott, Siobhan (NRTEE), “Aboriginal Communitiesand Non-renewable Resource Development IssueIdentification Paper,” (working draft) 3 March 2000.

Coad, Len, Jim Tanner and Isak Lurie (Canadian EnergyResearch Institute), “Oil and Gas Activity in theNorthwest Territories,” 23 March 2000.

Doggett, Michael (Michael Doggett and Associates),“Aboriginal Communities & Non-renewable ResourceDevelopment: The Magnitude of Opportunity (min-ing),” March 2000.

Eglington, Peter (Peter Eglington Associates Limited),“Fiscal Report: Some Recommendations forEncouraging Investment and Aboriginal Participation inthe Economy of the NWT,” July 2000.

GeoNorth Ltd., “Aboriginal Communities and Non-renewable Resource Development. Roundtable/Workshop: Doing It Right — Building Positive LinksBetween Northern Communities and Non-renewableResource Projects,” (report from workshop held29–30 March 2000, at the Explorer Hotel, Yellowknife)May 2000.

Griffiths, Dr. Angela (Jacques Whitford EnvironmentLimited), “Cumulative Effects Assessment andManagement in the Northwest Territories,” July 2000.

Ker, Alex (Compass Consulting in association withMichael Doggett and Associates), “Impact BenefitAgreements as Instruments for Aboriginal Participation inNon-renewable Resource Development,” March 2000.

Ker, Alex (Compass Consulting in association withMichael Doggett and Associates), “The Legal,Regulatory and Policy Framework for Non-renewableResource Development in the Northwest Territories,”March 2000.

Little, Lois, and Bob Stephen (Lutra Associates Ltd.),“Potential Social Effects of Non-renewable ResourceDevelopment on Aboriginal Communities in the NWT,”July 2000.

The NRTEE extends its appreciation to all who assistedwith the Aboriginal Communities and Non-renewable Resource Development Program,

especially Steve Kennett, Research Associate, Canadian Institute of Resources Law,who consolidated all the work undertaken by the Task Force over the past

two years in order to draft the present State of the Debate report.

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Important Complementary Initiatives

CCA p p e n d i x A p p e n d i x

The NRTEE’s Aboriginal Communities and Non-renewable Resource Development Program has used amulti-stakeholder process, extensive consultations andcommissioned research to develop recommendations thatare directed to the public, private and non-governmentalsectors. It is hoped that the NRTEE’s program willcomplement the other studies, intergovernmental process-es and policy initiatives that have examined, or arecurrently examining, issues related to non-renewableresources and Aboriginal communities in the NWT andthroughout northern Canada. Several examples of thesecomplementary initiatives are outlined below.

Intergovernmental ForumThe Intergovernmental Forum brings together the feder-al, territorial and Aboriginal governments to discussissues that are territorial in scope. At the firstIntergovernmental Forum meeting held in Hay River 5May 2000, leaders agreed to work together on pipelinedevelopments, devolution and capacity building forAboriginal governments leading up to the intergovern-mental meeting in the fall. This uniquegovernment-to-government-to-government approachwill provide a process for ongoing dialogue among theparties on such key issues as devolution of control overnorthern resources and other shared concerns. TheGNWT is committing full-time staff to this process aswell as providing financial support to ensure Aboriginalgovernment participation in the Forum. Several of theNRTEE’s recommendations are directed specifically tothe Intergovernmental Forum or are intended to informits work.

Towards A Better Tomorrow: A Non-renewable Resource Strategy for the Northwest TerritoriesThe report entitled Towards a Better Tomorrow:A Non-renewable Resource Development Strategy for theNorthwest Territories outlines the investments that are

required to create a favourable environment forresource development in the North, to manage develop-ment effectively and to ensure that northern residentsobtain maximum benefits. It emphasizes the need for allkey players with an interest in non-renewable resourcedevelopment to work together. The detailed strategy hasbeen presented to the federal ministers of IndianAffairs and Northern Development and Finance, toAboriginal organizations through theIntergovernmental Forum and to representatives fromindustry. The strategy proposes an investment level of$340 million over the next four years, with $100 millionto be provided by the GNWT. In a number of impor-tant areas, the NRTEE reached conclusions anddeveloped recommendations that are consistent with thepolicy directions proposed in the GNWT’s Non-renew-able Resource Strategy.

Economic Strategy PanelThe previous NWT Minister of Resources, Wildlife andEconomic Development, Stephen Kakfwi, initiated theEconomic Strategy Panel in January 1999 to examinethe opportunities and challenges faced by the NWT.The Panel represented a cross-section of NorthwestTerritories interests and was led by Richard Nerysoo,Gwich’in Development Corporation, and DarylBeaulieu, Dehton Cho Corporation. The diverse inter-ests represented on the panel ensured a broad andinformed view of what needs to be done to stimulatedevelopment and improve the circumstances of NWTresidents. A set of comprehensive recommendations,detailing how the GNWT might focus its economicdevelopment efforts, is presented in a report entitled,“Common Ground: NWT Economic Strategy 2000.”The report was tabled during the third session of the14th Legislative Assembly of the NWT, held 20 June2000. Sections of the report that address capacity build-ing, the land and environment, and non-renewableresources are particularly relevant to the NRTEE’sfocus.

Appendix C Aboriginal Communities and Non-renewable Resource Development

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Joint Aboriginal-Industry ResourceDevelopment ProgramThe Steering Committee of the Joint Aboriginal-Industry Resource Development Workshop created animplementation program “to develop themining/oil/gas industry in NWT and Nunavut.” Thisprogram is described in the report entitled Gathering OurStrengths: A New Way of Developing Northern Resources (June1999). The key program priorities include measures toincrease Aboriginal corporate capacity, facilitate infra-structure projects, accelerate geoscience activities, assistindustry/ labour transportation, and provide leadership indeveloping training and education initiatives for the min-ing/oil/gas industry. The report proposes anindependent program delivery structure, a specificbudget and an implementation plan. The NRTEE’srecommendations also address needs in several ofthese areas.

DIAND’s Sustainable Development StrategyThe Department of Indian Affairs and NorthernDevelopment released Toward Sustainable Development in1997. The principal themes of the strategy include con-tinued devolution of programs to First Nations and theterritories, implementation of the inherent right to self-government, and social and economic improvements inthe communities of Aboriginal people and other north-erners. The section dealing with DIAND’s role innorthern Canada discusses key issues relating to envi-ronmental threats, resource development and theeconomy, emerging institutions of public government,capacity, scientific and traditional knowledge, and con-sultation and partnerships. It then identifies thefollowing six goals: 1) to strengthen communities byfacilitating capacity building; 2) to facilitate and maintaineffective partnerships; 3) to integrate sustainable devel-opment into departmental and interdepartmentaldecision making; 4) to maintain and support healthy envi-ronments; 5) to develop and maintain sound naturalresource management regimes and 6) to meet theDepartment’s international obligations in support ofsustainable development. Specific objectives, targets andactions are then identified. DIAND’s broad goals andmany of the specific initiatives set out in TowardSustainable Development are consistent with the NRTEE’srecommendations presented in the main body of thisreport.

Gathering Strength — Canada’sAboriginal Action PlanThe Government of Canada’s response to the RoyalCommission on Aboriginal People was issued in 1998.Gathering Strength — Canada’s Aboriginal Action Plan pres-ents a long-term, broad-based policy approach designedto increase the quality of life for Aboriginal people andto promote self-sufficiency. A commitment to addressthe needs of communities by building a real partnershipwith Aboriginal people lies at the heart of the govern-ment’s action plan. The four main objectives are: 1)renewing the partnerships; 2) strengthening Aboriginalgovernance; 3) developing a new fiscal relationship and4) supporting strong communities, people andeconomies. Gathering Strength addresses several mattersdirectly relevant to the NRTEE’s focus on Aboriginalcommunities and non-renewable resource development.In relation to capacity building, it emphasizes the needfor increased professional development of Aboriginalpeople in land, environment and resource management.The Aboriginal Human Resources DevelopmentStrategy is also introduced. Access to debt and equitycapital is recognized as a major issue for Aboriginalbusinesses and community development. Increasedaccess to lands and resources is to be promoted by initia-tives to strengthen co-management processes, accelerateAboriginal participation in resource-based development,and improve the benefits that communities receive fromthis development. In a section dealing particularly withthe “Northern Agenda,” Gathering Strength identifies theneed “to ensure that Aboriginal people and communi-ties share in the wealth and benefits expected to flowfrom major resource development in the NWT.”

The Northern Dimension of Canada’s Foreign PolicyThe Department of Foreign Affairs and InternationalTrade issued The Northern Dimension of Canada’s ForeignPolicy in June 2000. This policy is based on a commit-ment to Canadian leadership on northern issues;partnerships within and beyond government; and ongoingdialogue with Canadians, especially northerners. Twoof the key objectives are “to enhance the security andprosperity of Canadians, especially northerners andAboriginal people” and “to promote the human security

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Aboriginal Communities and Non-renewable Resource Development Appendix C

of northerners and the sustainable development of theArctic. A major thrust of the policy concerns trans-boundary and circumpolar issues. The policy is, however,strongly rooted in Canada’s “experience in developingnorthern institutions, community building, and workingwith Aboriginal people and other northerners,” notablythe innovative approaches to governance and naturalresource management that have emerged in Canada’sNorth. The policy’s objective of strengthening theArctic Council, for example, reflects “an identified needfor capacity building within Arctic communities; and asearch for means to ensure sustainable economicgrowth in the circumpolar world as traditionaleconomies wane, while maintaining a focus on environ-mental protection.” The policy also notes that “animportant focus of Canada’s northern foreign policy isto promote both the analysis and the development ofmanagement/monitoring/ enforcement regimes.” Theseobjectives correspond closely with a number of the pri-orities identified by the NRTEE’s AboriginalCommunities and Non-renewable ResourceDevelopment Program.

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E n d n o t e s

1 Department of Foreign Affairs and InternationalTrade, The Northern Dimension of Canada’s Foreign Policy(Ottawa, June 2000).

2 Department of Foreign Affairs and InternationalTrade, Joint Statement by Canada and the Russian Federationon Co-operation in the Arctic and the North, 2000, atwww.dfait-maeci.gc.ca

3 The following description is based largely on twopapers commissioned by the NRTEE: Michael Doggett(Michael Doggett and Associates), “AboriginalCommunities & Non-renewable Resource Development:The Magnitude of Opportunity (mining),” unpublished,2000; and Len Coad, Jim Tanner and Isak Lurie(Canadian Energy Research Institute), “Oil and GasActivity in the Northwest Territories,” unpublished, 2000.

4 Employment figures from www.diavik.ca (7 December2000).

5 See, for example: Government of the NorthwestTerritories, Towards a Better Tomorrow: A Non-renewableResource Strategy for the Northwest Territories (Yellowknife, 15May 2000), pp. 2–5 and Appendix B, “PotentialResources and Benefits”; and Steering Committee ofthe Joint Aboriginal-Industry Resource DevelopmentWorkshop, Gathering Our Strengths: A New Way ofDeveloping Northern Resources (Yellowknife, 1999),Appendix 1, “Development Potential of the Mineral/Oil/Gas Industry.”

6 Gathering Our Strengths, p. 2.


8 The details on caribou behaviour are drawn fromS.A. Wolfe, B. Griffith and Carrie A.G. Wolfe,“Response of reindeer and caribou to human activities,”Polar Research 19 (1) (2000), pp. 1–11.

9 Economic Strategy Panel, “Common Ground: NWTEconomic Strategy 2000,” unpublished, 2000, p. 33.

10 This section of the report is based largely on LoisLittle and Bob Stephen (Lutra Associates Ltd.),“Potential Social Effects of Non-renewable ResourceDevelopment on Aboriginal Communities in the NWT,”unpublished, July 2000.

11 K. Abel, Drum Songs: Glimpses of Dene History(Montreal: McGill-Queen’s University Press, 1993),quoted in “Potential Social Effects,” p. 10.

12 Towards a Better Tomorrow, Appendix C, “ManagingDevelopment,” Strategy #9, p. 3.

13 These figures are taken from “Common Ground,”p. 37. They are based on the 1999 NWT LabourForce Survey.

14 “Common Ground,” p. 41.

15 Assembly of First Nations, National Chief MatthewCoon Come Welcomes the Prime Minister’s Commitment toSocial Justice, Press Release, 8 December 2000.

16 Thomas R. Berger, Northern Frontier, NorthernHomeland: The Report of the Mackenzie Valley PipelineInquiry. vols. 1 and 2 (Ottawa: Minister of Supply andServices, 1977), pp. xxvi–xxvii.

17 Northern Frontier, Northern Homeland, p. xxii.

18 Donald Wood, Canada North Almanac (Yellowknife:Research Institute of Northern Canada, 1976), quotedin “Potential Social Effects,” p. 11.

19 A list of Task Force members is found on page xiii.

20 These papers are listed in Appendix B.

21 World Commission on Environment andDevelopment, Our Common Future (Oxford: OxfordUniversity Press, 1987), p. 8.

22 West Kitikmeot/Slave Study Society, West Kitikmeot/Slave Study Annual Report 1999 – 2000 (Yellowknife, 31March 2000).

23 NWT Bureau of Statistics, 2000 NWT Socio-Economic Scan, Report found atwww.stats.gov.nt.ca/Statsinfo/Generalstats/Scan/scan.html

24 Department of Indian Affairs and NorthernDevelopment, Towards Sustainable Development (Ottawa,1997), p. 43.

25 Government of Canada, Gathering Strength —Canada’s Aboriginal Action Plan (Ottawa, 1998), pp. 6–9.


27 Towards a Better Tomorrow, pp. 7, 11.





Endnotes Aboriginal Communities and Non-renewable Resource Development

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32 “Common Ground,” pp. 67–72.

33 For example: Whitehorse Mining Initiative,Leadership Council Accord, Final Report (Ottawa, October1994), p. 25; and Canadian Environmental AssessmentAgency, NWT Diamonds Project: Report of theEnvironmental Assessment Panel (Ottawa, June 1996), pp.11–14.

34 Towards a Better Tomorrow, Appendix C, “Creating theRight Environment for Development,” Strategy #1, pp.1–3.


36 NRTEE, Budget 2001 Recommendations (Ottawa,November 2000).

37 “Response of reindeer,” pp. 3–4.

38 Towards a Better Tomorrow, Appendix C, “Creating theRight Environment for Development,” Strategy #10,pp. 5–8.



41 NWT Cumulative Effects Assessment andManagement Working Group (led by the Department ofIndian Affairs and Northern Development andEnvironment Canada), CEAM Framework Work PlanSummary (Yellowknife, 13 April 2000), p. 3.

42 Cumulative Effects Assessment and ManagementWorkshop — Developing a Blueprint for a CoordinatedApproach in the NWT, held 7–9 December 1999, inYellowknife.

43 Department of Indian Affairs and NorthernDevelopment, Commitment to Develop an NWT CumulativeEffects Assessment and Management Framework Announced,News Release 1-99171, 6 December 1999.


45 Canadian Environmental Assessment Act, s. 58 (1.1).

46 For example, the provisions for cost awards to“local interveners” in s. 31 of Alberta’s Energy ResourcesConservation Act.

47 Intergovernmental Working Group on the MineralIndustry, Task Force, “Funding Government GeologicalSurveys: How Much Is Enough?” Report to MinesMinisters, 56th Mines Ministers’ Conference,

Charlottetown, PEI, September 1999.

48 Prospectors and Developers Association of Canada(PDAC), “The Investment Climate for Exploration inCanada — With an Emphasis on Land Access and LandTenure Issues,” Brief to the Energy and MinesMinisters’ Conference, Charlottetown, PEI, September1999; and PDAC, “The Investment Climate forExploration in Canada,” Brief to the Energy and MinesMinisters’ Conference, Toronto, September 2000.





53 Towards a Better Tomorrow, p. 2; and “CommonGround,” p. 67. (Both documents cite surveys ofCanadian mining companies conducted by theFraser Institute.)

54 “Funding Government Geological Surveys,”Appendix C, p. 15.

55 “The Investment Climate for Exploration in Canada— With an Emphasis on Land Access and Land TenureIssues,” 1999, p. 14. The need for a long-term commit-ment to geoscience funding in Canada was reiterated byPDAC in “The Investment Climate for Exploration inCanada,” 2000, pp. 9–11.

56 National Geological Surveys Committee,“Cooperative Geological Mapping Strategies AcrossCanada,” Submission to the 57th Mines Ministers’Conference, Toronto, September, 2000.

57 Towards a Better Tomorrow, Appendix C, “Creating theRight Environment for Development,” Strategy #7, pp.19–24.

58 Gathering Our Strengths, pp. 8–11.


60 Peter Eglington (Peter Eglington AssociatesLimited), “Fiscal Report: Some Recommendations forEncouraging Investment and Aboriginal Participation inthe Economy of the NWT,” unpublished, July 2000,Part 1, “Investment Incentives (tax reductions).”

61 The price that a gas producer receives for gas at thegas field. The netback price is determined by deductingthe pipeline transportation costs (from the field to themarket) from the market gas price, which in this case isthe price of gas in Alberta.

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Aboriginal Communities and Non-renewable Resource Development Endnotes

62 NRTEE, Creating a Legacy of Economic, Community andEcological Well-Being: Laying the Foundation for the NewMillennium. Budget 2000 Recommendations (Ottawa,October 1999).

63 InfoLink Consulting, Notes from a meeting ofthe NRTEE Task Force on Aboriginal Communitiesand Non-renewable Resource Development, Ottawa,28–29 June 2000, pp.10–11.

64 Towards a Better Tomorrow, p. i.




68 BHP Diamonds Inc. Announces the Workplace LearningProgram, Press Release, 8 November 2000 (atwww.bhp.com).

69 Department of Indian Affairs and NorthernDevelopment, Toward Sustainable Development, vol. 1(Ottawa, 1997), p. 43.

70 Toward Sustainable Development, pp. 44-45.

71 The Northern Dimension of Canada’s Foreign Policy, pp.12, 13.

72 Gathering Strength — Canada’s Aboriginal Action Plan,p. 16.


74 Gathering Strength — Canada’s Aboriginal Action Plan,pp. 20, 22.


76 Towards a Better Tomorrow, Appendix C, “Creating theRight Environment for Development,” Strategy #5, p.12.

77 Towards a Better Tomorrow, Appendix C, “ManagingDevelopment,” Strategy #13, pp. 1–2.





82 NWT Department of Education, Culture andEmployment. Towards Excellence ’99. A Report onEducation in the Northwest Territories (Yellowknife, 1999) p.16.

83 Towards Excellence, p. 16.



86 Towards a Better Tomorrow, Appendix C, “MaximizingBenefits,” Strategy #18, p. 13.








94 Minister of Indian Affairs and NorthernDevelopment, Robert D. Nault, Address to the VisionQuest 2000 Conference, Winnipeg, Manitoba, 18 May2000.

aboriginal communities and non-renewable resource development

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