New mining rules on way for N.W.T.
Residents of the resource- rich Northwest Territories began consulting on a new Mineral Resource Act on Monday, a made- inthe- North piece of legislation aimed at making the territory more attractive for mining investment.
As one of the largest private employers in the territory, mining is an important part of the economy and makes up one-quarter of the region’s GDP. But existing projects are moving closer to the end of their lives and interest from exploration companies dropped, and then stagnated, years ago.
Part of the reason is that mining laws and unsettled land claims have created uncertainty for investors. The government hopes to “redefine” its relationship with the industry through a modern piece of legislation that clearly explains how mining is supposed to be done in the territory.
Residents now have the opportunity to help shape that legislation, which could affect their economy and environment for generations to come.
“It’s time we leave behind the one- size- fits- all framework that we inherited and build a better future ... with people who understand the circumstances of where we live,” said Nick Leeson, manager of legislative and legal affairs for the government of the Northwest Territories.
This is the first time the Northwest Territories has attempted to write its own mining legislation — the federal government controlled public lands in the territory until 2014 — and it’s taking the opportunity to reconsider everything from how mines are taxed to how the land is rehabilitated.
Leeson has spent the last two years studying other mining jurisdictions to see what kinds of laws might work in the territory. The result is a 42- page discussion paper that attempts to explain the intricacies of the mining industry and asks dozens of questions that will eventually shape the new act.
Residents in seven communities across the territory will have a chance to share their opinions with the government in the coming weeks. In a territory with less than 45,000 residents, “everybody and their neighbour” will be notified about this opportunity, Leeson said. The government’s website is also open for comments until Dec. 1.
It’s important to create a balanced act that takes everyone’s interests into account, says Wally Schumann, Minister of Industry, Tourism and Investment for the territory. The challenge is making sure it doesn’t become an unattractive jurisdiction for mining companies.
“This is the piggy bank of Canada,” Schumann said. Only one per cent of the land has been explored, leaving immense opportunity for financial growth. “The importance is so significant. We can’t take our foot off the gas.”
Residents are also aware of the financial benefits of the mining industry. Over 85 per cent believe mining is good for the territory and is vital to the long-term health of the economy, according to a survey commissioned by the government last year.
Almost the same number of people said they were worried about the future of the economy and wanted to see the government take an even more positive stance toward the mining industry.
Mining exploration in the territory lags behind the rest of the country, says Tom Hoefer, executive director of the Northwest Territories and Nunavut Chamber of Mines. Hoefer estimates the territory has missed out on $ 1 billion in exploration i nvestment over the l ast decade due to uncertainties in the N.W.T.’s regulatory regime.
Without an increase in exploration, mining activity is expected to decline in the coming years, says the government’s discussion paper. The territory currently has three mines in operation “with the first of these set to close in as little as five years.” Even if exploration were to increase tomorrow, “it may not be enough to offset the closure of existing mines” because it can take decades to turn a mineral discovery into a mine.
Unsettled l and claims with First Nations and Métis is another reason why investors are staying away f rom t he t erritor y, says Hoefer. The lack of certainty about who is in charge chases away investors, he says. The mining industry is hoping the new Mineral Resources Act will help to change that.
But it is unclear how the new act would affect relationships with Aboriginal groups since it will not change existing legislation, such as the Mackenzie Valley Resource Management Act, which established co- management of land between First Nations and the federal government.
There is no problem with writing a mineral resources act, as long as it respects the rights of First Nations to “do what they want on the land,” said Alex Power, regulatory research specialist for the Yellowknives Dene First Nation. It can’t undo the inherent rights of Indigenous people that are enshrined in the constitution, he says.
Meanwhile, Kevin O’Reilly, member of the legislative assembly representing Frame Lake, sees this as an opportunity to assess whether the industry is being taxed properly.
The Northwest Territories brings in more money from tobacco and l iquor sales than it does from resource revenue, O’Reilly points out. The government made approximately $ 23 million from extractive projects in 2014-2015 after sharing half of its revenue with the Canadian government and approximately 10 per cent with Indigenous governments. It made almost $ 40 million from tobacco tax and liquor commissions in 2015-2016.
“When our government makes more money from sin taxes than resource revenue, there’s something wrong,” O’Reilly said. The goal is to figure out how to use this capital to ensure future generations can benefit without ruining the environment. “We can’t go around digging holes forever.”