NWT lobbies for better revenue deal

Gary Park, Petroleum News Calgary correspondent

The Canadian government stands to harvest almost C$22 billion in revenues from the planned Mackenzie Gas Project — unless it can be pressured to share those spoils with the Northwest Territories.

And the campaign for an equal distribution of those royalties and taxes — potentially one third to the Northwest Territories government, one third to aboriginal governments in the territories and one third to the federal government — has been intensified.

In a letter to the leaders of Canada’s 10 provincial governments and two other territories, Northwest Territories Premier Stephen Kakfwi has laid out the basis of revenue sharing.

“Under existing arrangements, the federal government has control over all natural resources in the NWT and collects all royalties generated by their development,” he said.

What he wants is a transfer of powers to the Northwest Territories. “It’s an issue of dignity; it’s our resources; it’s our land,” Kakfwi said, describing the territories’ objective as the negotiation of an agreement over the land and resources.

So far, the Northwest Territories has gained the support of the four western provinces (British Columbia, Alberta, Saskatchewan and Manitoba) and its two neighboring territories (Yukon and Nunavut).

Kakfwi noted that within 10 years the territories — through its gas project and diamond mines — could become a net contributor to the Canadian economy, instead of a region dependent on federal hand outs.

The Northwest Territories government has calculated that the Canadian government could collect C$18.1 billion directly over three decades from the Mackenzie project, plus clawing back another C$3.6 billion from the territories under the existing revenue formula, leaving the territories with just C$900 million.

The diamond mines are forecast to inject C$7.5 billion into government treasuries, of which the Northwest Territories would collect a mere C$260 million.