Yesterday, New Democrat MP for Vaudreuil-Soulanges Jamie Nicholls cited my article, “Nunavut, Greenland and the politics of resource revenues“, during the second reading of the Northwest Territories Devolution Act in the House of Commons. This is the second time he has cited my article in Parliament, and I’m pleased that he’s found it so useful.
As a member of the Official Opposition, Mr Nicholls took the floor of the House to say that, while his party would support the Act at second reading, it was critical that devolution offer the Northwest Territories (NWT) and its people real control over their lands and resources, as well as a meaningful share of the revenues those lands and resources generate:
In terms of devolution, what are speaking about here today? I have particularly enjoyed Anthony Speca’s article in Policy Options. He stated:
Devolution means first and foremost that the territories’ own elected legislators, not distant southern ministers, make decisions in the local interest over the use and development of lands and resources. Perhaps no less importantly, it also means a share of the substantial revenues those lands and resources may generate.
In exploring those ideas about devolution and Arctic sovereignty, we must talk about what Speca mentioned in his article, which is resources. How will we treat them in this agreement? Again, I point to a quote by John Ralston Saul, which states:
…we are a northern nation. Two thirds of our country lies in what is normally categorized as North lands. One third of our gross domestic product comes out of the three territories and the equally isolated northern parts of our provinces. And that one third is what makes us a rich, not a poor, country.
One-third of our GDP comes from the north. This GDP is largely from the rich natural resources that exist in those territories. The question we should be asking here surrounding Bill C-15 is this: are we more interested in prosperity for the south or true prosperity for the people of the north? This is an essential question that we should be asking in this House with respect to Bill C-15. I am quite disturbed that government members are not standing up to give speeches, nor are members of the Liberal caucus, because it is a very important question that we should be asking.
After citing my article a bit further, Nicholls put the question another way:
The question I have to ask is this: does this agreement give the Northwest Territories the long-term capacity to guarantee their fiscal capacity to deliver northern-sourced solutions and services to the north, rather than what has happened so often in the past, which unfortunately was the south importing unimaginative southern solutions for northern people?
To my mind, Mr Nicholls is exactly right to ask it. As I argued in my article, during devolution negotiations Ottawa seems to have put its own priorities ahead of the NWT’s:
The NWT’s cap [on resource revenues shared with the federal government] is set at a round 10 per cent of its G[ross] E[expenditure] B[ase]—a mere fraction of a hypothetical and somewhat historically arbitrary proxy for the NWT’s expenditure needs. This distinction suggests that one of Ottawa’s primary political impulses at the negotiating table was to limit the potential future cost of devolution to the federal treasury, rather than to help propel the NWT along the track of its political evolution within Confederation. Ottawa’s practice of dealing with fiscal matters at a separate table once political matters have been settled only strengthens that impression. The overall result was an agreement that appears to have aligned Ottawa’s presumable political and fiscal objectives first and foremost, not the NWT’s.
I applaud Mr Nicholls for highlighting these concerns. I’d only ask him to have a look at one of my other articles, “Political vision and fiscal reality in Canada’s North“, which explains why the NWT’s core annual funding from Ottawa — and that of the other territories, most especially Nunavut — is a “hypothetical and somewhat historically arbitrary proxy” for their true expenditure needs. In other words, it explains how each year the territories are starved of the funding they need to deliver social services and invest in their communities — and why ungenerous devolution agreements such as the one debated in the House yesterday will do little to help.
Download a copy of the Hansard of the House of Commons for December 5, 2013, from the website of the Parliament of Canada.
(One minor point for Mr Nicholls: The figures cited for Greenland in my article refer to exploration and development expenditure by mining companies in Greenland, not royalties. However, it’s true that Greenland’s resource-revenue sharing agreement with Denmark better promotes fiscal self-reliance than the NWT’s agreement with Ottawa does.)