Report: Arctic Development Needs Ottawa Investment

The Ottawa government needs to invest at least C$100 million in the Arctic to jump start economic development there, according to a report released last week by the National Round Table on the Environment and the Economy. Aside from additional investments in infrastructure or the proposed natural gas pipeline, the report noted money is needed now to improve the regulatory and investment climate in the region.

Investments have to be made to allow aboriginal participation in both investments in the region and in assessing the impact on the environment, because without native participation, development will not succeed, said the NRTEE report. The NRTEE, based in Ottawa, took three years to complete the report.

"It's both the bearer of great opportunities and the potential harbinger of devastating social influences that will forever change traditional aboriginal communities," said the report.

Without strategic reinvestment, the oil and gas industry "has made it clear" that economic development will be compromised," said David McGuinty, executive director of the NRTEE. "We have not come even close to tapping in to the potential in the Western Arctic and one of the reasons is there are disincentives at play here for companies."

Current activity in both northern Canada's diamond mining and oil and gas development has "all the hallmarks of a major resource boom," but brings with it profound social, economic and political issues," said the NRTEE report.

The NRTEE reports directly to Prime Minister Jean Chretien. Three years ago, NRTEE set up the think tank to examine non-renewable resource development in the Northwest Territories, and the final report, "Aboriginal Communities and Non-Renewable Resource Development" was to be released at the opening of a three-day Capacity Building Forum in Yellowknife.

McGuinty said that the country's existing regulatory boards and rules cannot meet the demand and speed of investment needed by a proposed pipeline that could transport gas from the Mackenzie Delta to the Lower 48.

According to the report, if the pipeline project is approved, direct and indirect expenditures with field development drilling would be about C$1.1 billion over four years --- along with the C$1 billion already estimated in associated economic activity. The project also would provide 2,540 full-time jobs, according to NRTEE.

Among other things, the NRTEE recommended that Ottawa contribute C$60 million for an adult education program to improve literacy among aboriginal tribes, improve high schools and add computer training. It also recommends C$25.8 million over six years to monitor and evaluate the cumulative effect of economic development on Canada, and another C$15 million over three years to assist aboriginal organizations in becoming a part of the consultation process. Nearly half of the 40,000 people who live in the Northwest Territories are of aboriginal descent, and they consider their identity inseparable from the land.

McGuinty said that aboriginal communities "should have equity participation. I think in many respects the private sector operators understand there is now a reverse onus. It's almost a condition precedent for getting the deal."

The 125-page report noted that "non-renewable resource development is not consistent with the NRTEE's vision of sustainable aboriginal communities if it results in the creation of `have' and `have not' communities, or if certain groups within aboriginal communities are excluded from the benefits of development," the report noted.

The NRTEE said that the government must settle outstanding land claims with native tribes quickly and then give power to territorial and aboriginal governments that would otherwise delay development. It also noted that the government should use a "more generous infrastructure funding formula" that would not penalize the region for its sparse population.

Already, NRTEE noted that substantial investments have been made in the Northwest Territories. In 1999, the oil and gas industry committed C$183 million in return for federal exploration licenses in the Mackenzie Delta. Another C$466 million was committed in 2000 to explore in the Mackenzie Delta and the Beaufort Sea. Another C$75 million also was directed for the right to explore two blocks of Inuvialuit-owned land in the Delta.

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