Providing coverage of Alaska and northern Canada's oil and gas industry
October 2003

Vol. 8, No. 41 Week of October 12, 2003

Time running out for Premier Kakfwi

Aboriginal NWT official to quit before devolution deal

Gary Park

Petroleum News Calgary Correspondent

Northwest Territories Premier Stephen Kakfwi has little time left to achieve his most cherished dream — control for his people over revenues generated by petroleum and diamond operations in Canada’s North.

“Our land is producing revenues and we want a share of it, to take care of ourselves like everybody else,” he told the Far North Oil and Gas Forum in Calgary Sept. 29, just one day before he stunned the Northwest Territories Legislature by announcing he will not seek re-election Nov. 24.

“This is not an ultimatum. It’s simply saying that this is a pie. It’s good for producers, for gas-users, for diamond mines and it’s going to be great for the (Canadian) government and we want a piece of it.”

As an aboriginal radical, Kakfwi was instrumental in scuttling the original plans for a Mackenzie Valley gas pipeline 25 years ago. He has since become the most vigorous proponent of the project — but not without setting conditions.

With C$30 billion in gas, oil and diamond royalties and taxes at stake in the next two decades, Kakfwi has stepped up his demands for the management and administration of Northwest Territories resources, including a “net fiscal benefit,” to be turned over to his government and First Nations.

He told the Calgary conference that the Mackenzie pipeline “is ready to go ... but things have to be done in the right order.”

He also believes the government of Canadian Prime Minister Jean Chretien is ready to negotiate a revenue-sharing pact before Chretien leaves office by February 2004.

For now, the federal government has set a deadline of next March for a draft negotiating framework on the broad principles of devolution, including how much additional cash the territory will get — and even that process is lagging behind schedule.

If a deal is not reached, Kakfwi said in an interview with The Globe and Mail, “we might review our support for the pipeline, we might review our support for the diamond mines.”

The alternative is a bizarre prospect.

The Northwest Territories Finance Department has calculated that for every dollar of extra revenue from energy and mining projects, its costs will rise by C$1.04 to meet the soaring demands for roads, schools and other infrastructure.

“We are going broke,” Kakfwi said. “We are living on a fixed income. That has to change.”

Unlike Canada’s 10 provincial governments, the Northwest Territories has no power to impose royalties from the exploitation of its natural resources. It depends on the federal government for an annual grant.

A member of the Northwest Territories legislative assembly for 16 years and premier for almost four years, Kakfwi gave no indication what he will do next.

But he insisted his decision to step down had nothing to do with the prospect of a tough battle to get re-elected in the Sahtu riding, or the prospect that aboriginal self-governments might withdraw their support for the Northwest Territories government if the devolution talks falter.

Kakfwi told the legislative assembly that the Northwest Territories, under his leadership, has made progress on achieving significant aboriginal ownership of the Mackenzie Valley pipeline as well as resource royalties for the territories.

“I did not want to leave feeling defeated, disappointed with the lack of progress,” he said. “I wanted to be able to say I have made advances on the agenda before I considered a change and we are there.”

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