The North: a hotbed of issues

The North: a hotbed of issues

Editor, We have serious issues in the Northwest Territories.

First and foremost is the economy; it’s shrinking and there’s nothing on the horizon to suggest that’s going to change anytime soon. De Beers’ Gahcho Kue project is under construction and Dominion’s Jay Pipe is in environmental assessment, but these two prospective mines will not replace the employment loss created when one of our larger diamond mines ceases operations.

Moreover, there are no new mine projects of any scale on the horizon. Exploration investments continue to decline. In 2014, companies spent $31.5 million trying to find new deposits in the NWT. That’s 53 per cent less than was invested in the Yukon and about one-third of exploration investment in Nunavut.

Without serious exploration investments there are no new discoveries. We simply aren’t attracting the level of investment required to surface new mine projects.

The reasons, according to the Fraser Institute’s Survey of Global Mine Executives:

  • Our regulatory regime is too onerous and unpredictable;
  • We have an infrastructure deficit that significantly drives up the cost of exploration and project development; and
  • We still have unsettled land claims.

All of which leads to investor uncertainty. Given the choice – and they have the choice – mining companies will invest where conditions are more favourable.

We’re a resource-based economy. We need our elected officials to get focused on the impediments listed above; that’s their job. Otherwise the economy continues to shrink and with it employment, federal transfers and tax revenues.

Beyond attracting new investment, the most pressing issue is outmigration. Government has the ability to tackle this challenge on two fronts: lower the tax burden and put incentives in place to attract new residents. Regrettably neither territorial nor municipal governments have lifted a finger.

All of these conditions – along with the cost of living and operating in the North – are driving people and businesses out o f our territories. From Jan. 1, 2014 to April 1, 2015 more than 700 people left the Northwest Territories, a population decrease of 1.7 per cent. In Yellowknife, Inuvik, Hay River and Fort Smith, our four largest centers, the outmigration rates are tracking the same pattern.

One would reasonably assume that outmigration represents a major risk for both levels of government. The impact on federal transfers to the GNWT is $30,000 per person per year. The 15 months of data described above will result in a $2.1 million reduction in transfers at a time when we need every penny.

Outmigration also puts municipal operations at risk as towns attempt to collect growing revenue requirements from a shrinking pool of taxpayers.

Business people across the NWT know it. Outmigration isn’t just about people leaving, it’s also about business owners closing up shop and moving to lower-cost jurisdictions. Hay River has not been immune to this trend with decreasing business licenses over the past 36 months and at best static population growth. We can’t afford to lose any more.

And everyone knows we need a results-oriented energy strategy. Electricity costs are damaging the economy and hurting everyone. We face some of the highest energy costs in North America. We need our elected officials to stop talking about the problems and start talking about solutions.

Against this worrisome backdrop, we have a general territorial election upcoming in November. There’s much to think about. We need to pull together and make the right things happen. We have serious issues in the NWT. We need serious-minded people to resolve them.

Brian Willows

Brian Willows has lived in Fort Smith, Yellowknife, Inuvik and, primarily Hay River for more than 40 years. He and MaryAnn are the proud parents of five children and five grandchildren all born in the North. Willows is the former Chief Operating Officer of the NWT Power Corporation.

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