My Canada - Today and Tomorrow

Lou Natale, Director of Sales, Nortel Networks and Director, The Empire Club of Canada; Laura Greenberg, Grade 12 Student, North Toronto Collegiate Institute; Reverend Dr. John S. Niles, Rector, St. Andrews United Church, Markham and 2nd Vice-President, The Empire Club of Canada; Brian Dominique, Partner, Cassels Brock and Deputy Chief Negotiator for the devolution of the Northwest Territories; Timothy Hearn, Chairman, President and CEO, Imperial Oil Limited; Paul Flaherty, President and CEO, Northwestel; Charles Coffey, Executive Vice-President, RBC Financial Group and 3rd Vice-President, The Empire Club of Canada; Megan Harris, President, Harris Consulting; Robert Gannicott, Chairman and CEO, Aber Diamond Corporation; and Terry Mosey, Executive Vice-President, Bell Canada.

Introduction by Bart Mindszenthy

Ladies and gentlemen, welcome to the address of the fifth premier in our very special Premiers Speakers Series that continues throughout the season.

As you know, we have invited all the First Ministers to come and talk to us about their Canada--today and tomorrow, and to articulate what they see as the major challenges and opportunities for our country in the next decade.

To support this important series, Ipsos-Reid, the national polling and research firm, graciously volunteered to check the pulse of the nation about the future for the Empire Club of Canada.

The results show a strong and clear trend.

The number-one concern 10 years from now out of the 14 areas of concern we had tested will be services for the elderly and their specific home and health-care needs. That's followed by such issues as family health care, waste disposal, energy and a clean environment.

To see and download the full study, please visit our Web site at www.empireclub.org.

Today, we have the pleasure of welcoming the Honourable Joseph Handley, eighth premier of the Northwest Territories.

He was first elected as a member in the 14th Legislative Assembly in December 1999, after serving as a deputy minister with the Northwest Territories for more than 14 years.

He was a minister of several departments from early 2000 onwards, and started his term as premier in December 2003.

Born in 1943 in Meadowlake, Saskatchewan, Premier Handley moved to the Northwest Territories in 1985 to assume the position of Deputy Minister of Education. Subsequently, he also served as the deputy minister in a number of other departments of the territorial government.

Prior to moving north, Premier Handley was the official trustee and superintendent of the Frontier School Division in Manitoba for nine years, as well as an assistant professor at both the University of British Columbia and the University of Manitoba.

Along the way, he served for two years as a lecturer at two universities in Ghana, and was a teacher and vice-principal at schools in Saskatchewan.

And I must share with you the results of my inquiries about what appears to be a record-setting accomplishment by our speaker today. It seems that Premier Handley holds a national record for being the only person in Canada to be acclaimed an MLA and then to go on and become the only premier to win by acclimation. Back-to-back acclimations.

This educator-turned-bureaucrat-turned-premier made an interesting observation this past January. He noted that: "It is a simple fact that what separates the 'have' from the 'have-not' provinces and territories is the ability to generate [their] own revenues and pay [their] own way. We have the great good fortune of being a resource-rich part of Canada so we have the 'ability' to generate our own resources and become a net contributor to the nation. There is a strong correlation between the economic self-sufficiency that we seek and having the ability to determine our own future. Having one means gaining the other."

What makes Premier Handley's remark all the more relevant is the Prime Minister's comments this week in Sao Paulo that he can envision the territories becoming provinces at some future point. The real challenge may be to find the balance between a territorial agenda for self-sufficiency and a federal agenda for expressing ownership of the Arctic.

Ladies and gentlemen, please welcome to the podium of the Empire Club of Canada the Premier of the Northwest Territories, the Honourable Joseph Handley.

Joseph Handley

Introduction

Thank you for inviting me to share the NWT perspective on "Canada--today and tomorrow." I am honoured to be the first territorial premier to speak to this series.

I certainly welcome the opportunity to explain the current situation in the Northwest Territories and to outline our priorities for the future. It is important to raise the awareness that, despite the great distances between our communities, what happens in the Northwest Territories has a direct bearing on life here in the South. Economic activity north of 60 impacts industry, the national economy and federal government revenues.

I think it's only fair to tell you as well, that my speech really is a snapshot for today because things seem to be changing so quickly. I go to bed in Yellowknife as premier of a territory. I wake up in the morning, read the newspaper, and it looks like I may soon be premier of a province! Of course, this is not likely to happen any time soon and certainly it is not an issue that we dwell upon. I have come to discuss with you the exciting reality that is the Northwest Territories today and where we want to be in the near future.

I want to thank the Empire Club, and particularly your president Bart Mindszenthy, for initiating this national dialogue on the challenges and opportunities facing our country at this pivotal time in our history. This provides a valuable opportunity for all of us to celebrate both the diversity of our great nation and the many ties that bind us.

I read with great interest the results of the Ipsos Reid poll conducted for the Empire Club asking Canadians to rate the most pressing problems provinces and territories face over the next 10 years. Those issues, with some exceptions, are the same as those facing the people of the Northwest Territories--care for the elderly, the sustainability of our health-care system and maintaining the fiscal viability of government programs and services. Like all other regions of the country, the public policy choices surrounding each of these issues are under vigorous debate in the Northwest Territories.

For all that we have in common, we also have some different challenges. Today I'd like to talk about some of those challenges, as well as our tremendous potential and why finding solutions matters--to you and to us.

While the focus of my talk is on the present and future, to understand where we are today I need to start by looking briefly at the past.

Where We Have Come From

The NWT's story is one of unfulfilled promises. For the last half century, successive governments have pledged to unleash our region's potential. As far back as 1953, Louis St. Laurent told Parliament "…the territories are vastly important to Canada and it is time that more attention was focused upon their possibilities and what they will mean to the Canadian nation."

Prime ministers from St. Laurent to Diefenbaker, Trudeau to Chretien, and now Martin have promoted everything from "the road to resources" to "the northern dream." Repeated promises have been made to bridge the gap between south and north to ensure all Canadians, particularly northern Aboriginal people, fully benefit from everything our great country has to offer.

While we have made real and important steps along the way, we have yet to accomplish one of the most important steps. That is to ensure northern governments gain control over the development of their resources and the revenues generated by them. Having access to those revenues would eventually mean the difference between being a "have" and a "have-not" region. The monies flowing from the sustainable development of resources would enable us to become self-sufficient--a net contributor to the public purse.

Where would Alberta be today without access to its own oil revenues and royalties? Could Saskatchewan have celebrated its recent move from "have-not" status without the revenues it receives from the booming business in the oil patch?

Unfortunately, we lack the necessary tools and fiscal levers to fully benefit from the development of our resources. In some ways, the issues we face parallel the issues faced by our friends in Newfoundland and Nova Scotia.

We have been trying for 20 years to negotiate an agreement that would transfer control over our natural resources to northern governments, but with no success. Decisions concerning the development of northern resources remain, to this day, with the Department of Indian Affairs and Northern Development.

Along with our partner, Aboriginal governments in the Northwest Territories, we are in negotiations once again with the federal government to transfer these responsibilities. I am optimistic that Prime Minister Martin sees the importance of reaching an agreement to transfer these responsibilities and revenues to the Northwest Territories and soon.

Let's Talk About Where We Are Today

This obstacle hasn't stopped us from moving ahead in many other areas as vital and active partners in the federation.

The sheer fact that I am invited here today speaks volumes about the great strides in the political development of the North over the past few decades. It was not long ago that all decisions about northern life were overseen by a commissioner appointed by Ottawa. Today, we have a fully responsible territorial government with jurisdictional responsibilities similar to provinces with the notable and important exception of control over our natural resources.

Along with political development at the territorial level, Aboriginal people in the Northwest Territories have made equally impressive progress in negotiating agreements providing a greater level of self-determination for Aboriginal communities and greater certainty for the territory.

In the Northwest Territories, the jurisdiction and responsibilities of Aboriginal and public governments are in a process of transition that will establish new relationships between our peoples and governments. The completion and implementation of Aboriginal rights negotiations are changing the nature and function of the territorial government itself and bringing certainty to the structure of government. This is a welcome evolution for the territory and all those who live or do business in our region.

Just yesterday, I appeared before the House of Commons Standing Committee on Aboriginal Affairs and Northern Development in support of the speedy passage of the Tlicho Land Claims and Self Government Settlement Act. With the passage of this bill, we will have four settled land claims and will establish the very first Aboriginal self-government in the Northwest Territories. This agreement is indicative of the type of governance system we wish to build in the NWT--a system bringing together Aboriginal and public governance in a way that ensures effective governance for all our residents.

What Does This Mean to Canada?

This political maturity and increasing certainty is encouraging the private sector to explore and develop our natural resources. Given the short time today, I want to focus my comments on the development of our diamond and gas resources.

The explosion of mining development since the discovery of diamonds in the NWT has attracted investors and workers from every corner of the country and all around the globe. It's common to see line-ups outside the federal government's mining office for months in advance of when prospecting permits are issued.

In just five years, NWT diamond mines have made Canada the world's third-largest supplier by value of rough, gem-quality diamonds. With the Ekati and Dievik mines already in operation, and the De Beers' Snap Lake project expected to begin production in 2006, the three mines will contribute an estimated $26 billion to Canada's Gross Domestic Product over their lifetimes. Of that, over $7.5 billion will go into the federal coffers. All told, almost 126,000 person-years of work will be created.

While the territorial government has yet to see a single cent of the resource royalties from these operations, Canada as a whole is reaping enormous benefits from our bullish economy. Mining activity, along with oil and gas exploration and the promise of a pipeline on the horizon, have generated exceptional economic growth.

All of this translates into growing opportunities for individuals and businesses in the rest of the country. The majority of new workers filling these jobs come from south of 60, as do the goods and services to support them. Everything from food to steel must be shipped from south to north.

And this is just the tip of the proverbial iceberg.

Where We Are Going

While the impact of diamond mining on the NWT economy has been amazing, the Mackenzie Valley Gas Pipeline project has the potential, if we do it right, to trigger a level of economic growth unprecedented in the history of the Northwest Territories.

With construction scheduled to begin as early as 2007, natural gas could begin flowing through the proposed Mackenzie Valley Pipeline in 2008. Based on the current estimated reserves of natural gas alone, NWT gas will supply southern markets until at least the year 2033.

The return in dollars and jobs over the next 30 years, under a price scenario of US$4 per thousand cubic feet, would see total project revenues of $53.2 billion. This will generate some $23.4 billion for governments. Under our current arrangements with Ottawa, our government would only realize $900 million or just four cents on every dollar collected.

Canadians in the North, South, East and West would all benefit from increased investment and job creation. The numbers are impressive: $7.7 billion in total labour income and 157,000 person-years of employment. Re-investment of corporate profits in new exploration and development could generate an additional $16-$27 billion in GDP and between 243,000 and 406,000 additional person-years of employment.

The addition of this new supply of gas would help restrain gas price increases. Equally valuable, this supply of cleaner burning fuel could save Canada up to $2.1 billion in greenhouse gas emission costs.

All of this matters to Canadians but nowhere does it matter more than in the North.

What It Means to the NWT

This project provides extraordinary opportunities for NWT communities and residents to take control of their economic future. Investment in these gas projects and the associated long-term development of the Beaufort Mackenzie Delta reserves will be approximately $7.6 billion.

For our people, the pipeline represents employment, investment and business opportunities and it means self-reliance and the ability to provide a good standard of living and quality of life for their families. It means real hope and opportunity for all our people.

This project provides important opportunities for Aboriginal people in our territory, including equity participation in the project. The consortium developing this project has entered into a partnership with the Aboriginal Pipeline Group--a precedent-setting agreement that has Aboriginal people in on the ground floor, directly involved in project planning and implementation.

The Aboriginal Pipeline Group has secured the opportunity to take a minimum one-third equity interest in the proposed Mackenzie Valley Pipeline.

We believe this partnership will result in significant Aboriginal participation and economic benefits; benefits only dreamed about in past large-scale resource development projects in the Northwest Territories.

As northerners, we also recognize the importance of the natural environment and our collective responsibility for environmental stewardship for this project and other resource development projects in the Northwest Territories. That's why we have taken a pro-active approach to stewardship by creating and implementing initiatives to protect our natural heritage; initiatives such as the Protected Areas Strategy.

The Protected Areas Strategy is a community and land claimant-driven partnership to identify and establish protected areas in the Northwest Territories. It is innovative and community-driven, and most important, recognizes these decisions must, and will, be made and implemented by northerners--by the people who will be directly impacted by the decisions made.

Another important long-term benefit from this project is the opportunity it will provide to diversify our economy. The pipeline and resulting exploration will lead to new business prospects for northern companies, including manufacturing and value-added opportunities.

New infrastructure, such as the potential for a Mackenzie Valley Highway, will provide impetus to expand our bustling tourism industry.

We also view the Mackenzie Valley as a major energy corridor with not only oil and natural gas, but also hydro-electricity. The pipeline provides a unique opportunity to develop our hydro potential in a way that could lead to cheaper and cleaner energy sources for our communities, reducing our heavy reliance on fossil fuel generation. All of this will lower our cost of living while increasing our quality of life and creating a healthier environment that benefits all Canadians.

For all these reasons, we believe this project is in the long-term strategic interest of the territory and country. We also believe a fundamental issue that must be addressed in the short term is the negotiation of an agreement that ensures an equitable division of revenues between the federal government and northern governments, both public and Aboriginal. This is a critical missing link as we move closer to the development of a Mackenzie Valley Pipeline. It is a non-negotiable principle for our government.

It is a discussion the NWT and Aboriginal governments are having with the federal government. It is one we believe can and should be resolved, at least in an interim manner, before the pipeline proceeds.

It is for this reason I recently approached Prime Minister Martin about the need to negotiate an interim arrangement on revenue sharing that provides northern governments with an immediate benefit from these developments.

Conclusion

I am convinced that, if we do it right, the Northwest Territories has a prominent and vital role to play in the future of this country.

After decades of unfulfilled promises, it is time for all of us to work together to ensure the enormous potential of the Northwest Territories is fulfilled.

The latest Speech from the Throne pledged to develop a Northern Strategy to ensure this occurs. We have been working with the Prime Minister on this exciting initiative. Given his comments this week in Brazil, we are optimistic that this time Canada will deliver.

Thank you.

The appreciation of the meeting was expressed by Charles Coffey, Executive Vice-President, RBC Financial Group and 3rd Vice-President, The Empire Club of Canada.