While admitting its election came too late to ameliorate the Mackenzie Gas Project’s (MGP) regulatory ordeal, Canada’s nine-month-old Conservative government is vowing to make life easier for developments the northern pipeline is expected to inaugurate.

Chilling facts prove an economic thaw is needed above the 60th parallel of latitude that separates Canada’s provinces and arctic territories, Indian Affairs and Northern Development Minister Jim Prentice told business and government leaders in the Alberta capital of Edmonton.

Producers drilled about 25,000 wells in the western provinces last year but only 12 in the Yukon, Nunavut and Northwest Territories (NWT), he said in vowing to change the northern industrial and regulatory landscape. Prentice, in private life a Calgary lawyer, is the federal cabinet minister responsible for all government issues raised by the MGP.

“We have a spider’s web of regulatory confusion north of 60 degrees that makes it difficult to get on with things,” he told the Edmonton Chamber of Commerce in a speech that was broadcast live on the Internet to Whitehorse, Yellowknife, Prince George and Prince Rupert.

“We have to address this suffocating regulatory environment north of 60 degrees for the well-being both of aboriginal and non-aboriginal people there,” Prentice added in an interview.

The C$7.5 billion (US$6.8 billion) MGP — currently mired in more than a year of two parallel sets of hearings involving a dozen federal, territorial, native and local authorities — has no choice but to keep on trying to make the old regime work, he said.

But he set his sights on at least starting to introduce improvements to northern government in time to let the arctic pipeline fulfill its promise of becoming a “basin-opening” catalyst for continuing development of northern Canadian gas.

Northern territories need a more balanced approach to industrialization and their traditional top priorities of environmental and cultural protection, Prentice said.

“This is a long-term infrastructure build. This is an important natural gas infrastructure spine that runs through the entire Mackenzie Valley. It’s not going to be driven by spot gas prices,” Prentice said.

Initiatives underway include revived aboriginal land claim negotiations, talks on “devolution” of province-like powers to northern territories, C$300 million (US$270 million) in native housing construction and creation of a federal Crown or government corporation to run a C$500 million (US$450 million) community adjustment fund for settlements along the pipeline route.

The special fund will only be spent if the project is approved and construction proceeds, Prentice said. “No pipeline, no money.” He will travel soon into the Deh Cho region of the southern NWT that continues to resist the pipeline, insisting its land claims should be settled before approval of the project.

Ottawa under the Tories has made a confidential offer. Discussions are underway. “We’ve made considerable progress,” Prentice said. But the government will not refuse to let the pipeline go ahead before the Deh Cho claim is settled if the project is approved first, he added.

Two of 14 Dene and Metis communities in the region took steps to buy into the gas project after concluding the Conservatives mean business when they say no native group will be allowed to veto the MGP. The Acho Dene Koe in Fort Liard and Liidlii Kue First Nation in Fort Simpson formed a partnership to pick up a 30% interest in the Aboriginal Pipeline Group, which has rights to one-third ownership of the proposed Mackenzie Valley gas transmission system.

The new partnership will attempt to drum up participation by the other Deh Cho communities. The other NWT native nations along the pipeline route — the Inuvialuit and Gwich’in on the Mackenzie Delta and the Sahtu in the central Mackenzie Valley — long ago took their shares in the aboriginal investment firm, which are allotted in proportion to the length of the pipeline in their districts.

Norwegian emphasized the new partnership is strictly a business deal that does not alter the Deh Cho’s land claim policies. Prentice, a veteran of notoriously difficult Canadian aboriginal law and government issues before he went into politics, set no target dates for settling territorial claims.

Questioned by native and northern officials, Prentice said he would have to be convinced that big increases in Ottawa’s northern grants and budgets would help. “As a nation we are investing considerable sums north of 60 degrees,” the minister said.

Annual federal northern spending works out to about C$28,000 (US$25,200) for every man, woman in child in Nunavut, C$19,000 (US$17,100) per capita in the NWT and C$17,000 (US$15,300) in the Yukon, he estimated. Total federal, provincial and local government spending in the rest of Canada averages C$8,000 (US$7,200) per capita, he said.

NWT Finance Minister Floyd Roland urged Prentice to take action on plans to open up northern frontiers to development. “Time is of the essence,” said Roland, whose territorial government has repeatedly sounded alarms that further delays could put the MGP into mothballs if liquefied natural gas imports into North America increase before the arctic pipeline can be built, or if other supply sources emerge.

Devolution of province-like powers and resource revenues would set the stage for the territorial government to introduce pro-development policies, said Roland, who is also NWT deputy premier.

The NWT does not seek part-ownership in the northern pipeline but encourages Ottawa to help the Aboriginal Pipeline Group cover its costs of a one-third share in the project. The native investment alliance is seeking a federal loan guarantee. “If that’s what it takes we should seriously look at it,” Roland said.

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