Responsible Resource Development in the North

In addition to streamlining the regulatory processes required to get Northern resource projects up and running, and efforts to develop geological maps of the north to help prospectors find energy and minerals, the Government of Canada is working closely with the territories to ensure that more of the economic benefits stay in the North.

To that effect, on August 21, 2012, Prime Minister Stephen Harper witnessed the signing of changes to resource revenue sharing agreements which will ensure a greater portion of the revenues generated from the mining and resource economy in Yukon, will be available for use in the territory. 

Jobs and growth

Few countries are as blessed with natural resource deposits as large as those in Canada’s North including: diamonds (Ekati, Diavik, Snap Lake, Jericho); gold (Meadowbank); base metals and silver (Wolverine, Minto, Keno Hill); and tungsten (Cantung). In addition, one-quarter of Canada's discovered resources of conventional petroleum are in the North and remain undeveloped, as well as about one-third of the country's estimated potential.

Canada’s energy and other natural resources are important assets given global economic demand. The natural resource sectors directly employ close to 800,000 Canadians. In the North, mining and energy alone account for one-quarter of territorial GDP and employ approximately 5,000 people, the majority of whom are northern residents.

There are currently 24 advanced projects in the North representing $38 billion in potential new investment that require federal regulatory approvals. If developed, these projects would directly support an estimated 8,000 full-time jobs, most of which would be filled by northern residents.  Thousands more jobs would be created in mining, manufacturing, transportation and other business sectors in the North and across Canada. 

Improving resource revenue sharing arrangements for Yukon

The Canada-Yukon Oil and Gas Accord, signed in 1993, and the Yukon Northern Affairs Program Devolution Transfer Agreement, signed in 2001, transferred responsibility for the management of Yukon lands and natural resources from the Government of Canada to the Government of Yukon. This included the collection of natural resource revenues derived from oil and gas resources (under the Oil and Gas Accord) and from lands, water, forestry and mineral resources (under the Devolution Transfer Agreement). Both agreements feature resource revenue sharing arrangements, under which Yukon retains a share of the resource revenues it collects, without an offset against its Territorial Formula Financing grant.

In August 2011, Prime Minister Stephen Harper and Yukon Premier Darrell Pasloski agreed to a new resource revenue sharing arrangement that would provide the territory with resource revenue sharing arrangements similar to those agreed in principle between the Government of Canada and the Government of the Northwest Territories, in the Northwest Territories Land and Resources Devolution Agreement-in-Principle signed in January 2011.

The amendments signed on August 21, 2012 will update the Devolution Transfer Agreement and Oil and Gas Accord to allow for these improved arrangements.

Amendments to take effect for resource revenues derived in the 2011-12 fiscal year include:

• The two existing revenue streams (oil and gas revenues and mineral, forest land and water revenues) are combined into one and all revenue sharing arrangements are incorporated into the Devolution Transfer Agreement.
• Until it elects to switch to the new arrangement, the Yukon Government retains the first $6 million from this combined revenue stream with the balance offset against its Territorial Formula Financing grant.
• When it elects to switch, Yukon's share of revenues will be 50 per cent of resource revenues, up to a cap of 5 per cent of its Gross Expenditure Base. This will result in treatment similar to that of the Northwest Territories Land and Resources Devolution Agreement-in-Principle.
• In addition, a clause in the Devolution Transfer Agreement which defines land revenues will be amended in order to mirror the treatment of these revenues for provinces under Equalization.

This agreement with Yukon supplements other initiatives that Canada has taken to help the North take advantage of its resource wealth, including the Geo-Mapping for Energy and Minerals (GEM) Program.

The GEM program, which was launched in 2008, is designed to significantly advance and modernize the public geological knowledge needed in the North to make informed resource investment and land-use decisions. To date, GEM has conducted 21 projects in the three territories and the northern parts of six provinces. Thirty regional geophysical surveys have been completed and over 560 open file releases of new geoscience maps and data are available on the Natural Resources Canada website. This data is now being used by mining companies to guide investments, which are generating employment. The GEM program is currently in its fifth year and is focusing on communicating its results.

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