Mining News

NWT Takes Advantage of Devolution

Posted by Cheryl Rutledge on 11/10/2014 4:09:43 PM

By Taylor Jackson and Kenneth P. Green

The Northwest Territories (NWT) has taken its first step towards developing its own resources since devolution took place. The CBC is reporting that the territory has approved a potential mining development’s environmental assessment. The review was also completed in two months, when the initial timeline was for the review to be completed in seven, signaling that, at least for the moment, long regulatory approval times will not act as an impediment to potential investment.

Minister of Lands Robert C. McLeod has said “[o]ur thorough review and timely decision proves that Northerners know their own priorities and should be the ones deciding how NWT resources are developed and our land and environment are protected.” Executive Director of the NWT and Nunavut Chamber of Mines, Tom Hoefer, was optimistic when he stated “[o]ur hope is that the N.W.T. is emerging as a fresh N.W.T.”

Indeed, the first mining regulatory approval post-devolution should be heralded as good news. The process of devolution gave the Northwest Territories the power to develop its resources as it saw fit. Until the devolution agreement went through, the federal government held the power to regulate and approve development of NWTs resources, and the agreement should be seen as a landmark step in a positive direction of allowing the territory to have sovereignty over many of its crucial economic decisions.

The previous excess and cumbersome regulatory process certainly had a negative effect on investment. As evidenced by the Fraser Institute’s Annual Survey of Mining Companies, on the Policy Perception Index, which is comprised of 15 policy factors such as uncertainty over regulations and disputed land claims, in 2013 NWT had the worst performance of any Canadian jurisdiction and was ranked as the 47th (of 112) most attractive jurisdiction in the world. In contrast to this relatively poor performance on policy factors, when respondents considered the jurisdiction based on its mineral potential given world class policy, NWT became the 9th (of 112) most attractive jurisdiction in the world for investment in mining.

With a current climate of mediocrity regarding mining policy in NWT, policy improvement would be welcomed. It is estimated that NWT will collect $60 million in revenues from mining and resources in 2014. In a situation where world class potential is being muted by lackluster policy, policy improvement could go a long way in generating economic gains for the province.

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