A real economy fosters strong communities

A real economy fosters strong communities

There is something intrinsically wrong with the NWT economy. Of its 33 communities, only Yellowknife and Hay River have a robust private sector and somewhat stable economies, although even they rely on government for a least a third of of their base. All other communities in the NWT are overwhelmingly dependent on government. That is not healthy.

The priority of both the federal and territorial governments is to foster a resource-based economy. The North is seen by southern leaders as a storehouse of wealth to be drawn from to fuel the national economy. Northern residents are placeholders who affirm Canadian sovereignty, incidental to and at the convenience of development. The approach is top-down and disconnected from local needs – a form of neocolonialism – and the NWT government follows along blindly.

We have heard a lot of hype in recent years about the need to reduce regulations, eliminate boards and “streamline” environmental assessments to attract new mines. The wheels have been greased, the doors are flung open wide, and look: no mines are coming. The reality is that resource development is driven by the market. If the value of the commodity is high, the mines find a way to go in. If the price of oil is high, the drilling happens. As it was with the diamond mines, so shall it be. Waiting for resource development to occur does not an economy make.

When resource extraction does take place, the problems are many and varied. These are mega-projects. The impacts often work against the traditional Aboriginal economy, subverting it over time by altering the landscape and impacting wildlife. Shift work, typical in such projects, is often not compatible with Northern residents and so workers from afar are brought in. Those locals suited to the lifestyle earn large incomes that contrast with others in their community, creating divisiveness. Worst of all, most resource projects last only a few decades and the vacuum that remains when they depart, after having altered so much, leaves communities worse off than they were originally.

Most of those issues are avoidable. Resource development projects should be the icing on the cake, adding to the local economy to bring wealth and benefits to already robust and healthy communities in a carefully planned and well-timed way. A community that is strong is resilient, can optimize the benefits of a nearby major project and weather the impact of its departure. Few, if any, communities in the NWT are in that position. That must change.

The key is to foster the growth and development of small businesses in every community. Small businesses are the backbone of every economy, providing services and creating jobs. They are invaluable, yet little is done to encourage or support them.

Running a small business in a government-based economy is like sleeping with an elephant – if it rolls over, and you know it will, you get squashed. Governments tend to look at the big picture, yet ignore what is happening at the the core. They must be consistent, predictable, and use local products and services, always.

Unfortunately, governments at all levels also tend to either have poor policies or their well-thought-out policies get ignored in the bureaucratic shuffle. A case in point is the NWT’s “Business Incentive Policy” (BIP) which has been overdue for a revamp for more than a decade. Walmart is an eligible NWT business under BIP. Enough said.

Over a decade ago, the NWT government had a policy that required all of its staff, everywhere, to support local businesses. If a service was available locally, it had to be used (with the caveat that it had to be competitively priced and of decent quality).

That not only stimulated the growth of services in communities for use by government offices, but those services were also available for local residents. Businesses grew and multiplied. Entrepreneurs flourished. Communities were made stronger. For some reason, explained only by those who understand how governments work, that policy was abandoned, replaced by centralization and expansion, the natural growth cycle of bureaucracy. Instead of utilizing private sector solutions, the NWT government switched to creating solutions internally, and grew. Of course the practice trickled down to community governments.

No government should ever commit financial resources to an undertaking without first finding creative ways to keep the money within local communities. Spending money outside communities, or worse, outside the NWT, when it could have been dispersed within the local economy, is flawed, foolish and counterproductive.

Communities with strong local economies provide residents a higher quality of life and thrive in multiple ways. What should be done, needs to be done, is a concerted effort to strengthen community economies by stimulating local businesses to grow and prosper.

Northern Journal

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