Mr. Speaker, I have a return to written question asked by Mr. Yakeleya on October 18, 2006, regarding leakage of resource royalties in the North.

1. Can the Premier provide the amount of royalties leaving the North and staying with the federal government, and our return from these resources in the last 10 years?

Later today, I will table a chart that shows federal resource revenues from the North over the past 10 years. The federal government does not publish separate numbers for each territory. However, most of the royalties after 2002-03 would be from the Northwest Territories, because Yukon implemented a devolution agreement in 1998 and

any mines operating in Nunavut were unlikely to have generated significant royalties.

The Government of the Northwest Territories does not report tax revenues specifically from the resource industry. However, the Department of Finance estimates that from 1999 to 2004, corporate, property and fuel tax revenues received directly from resource companies totalled $115 million. This does not include taxes from spin-off industries or businesses that service the resource industry, nor does it include personal income taxes, payroll taxes and other taxes that employees of resource companies might pay.

2. In terms of our financial fiscal imbalance, what does the North need to do to begin having our revenue from our resources managed by the North?

Revenue from NWT resources will be managed by the North once a devolution agreement among Canada, the GNWT and aboriginal governments is signed and implemented. There are a number of outstanding issues that must be resolved before such an agreement can be signed, including the allocation of revenues among northern governments, and the net fiscal benefit northern governments will receive on their resource revenues, after offsets against federal transfers are accounted for.

Canada has indicated that it is not prepared to discuss the net fiscal benefit until after new equalization and territorial formula financing arrangements are in place.

3. Will the GNWT provide an opportunity to discuss post-revenue sharing in the North? Who or when will the North sit down to discuss federal resources revenue management framework?

The GNWT will continue to work in partnership with aboriginal governments to get the best deal for the NWT. Bilateral discussion on resource revenue sharing amongst NWT governments had been under way since 2002. A joint GNWT/Aboriginal Summit proposal was developed and presented to the Government of Canada in 2003. Since that time, aboriginal governments' support for the 2003 proposal was withdrawn. Aboriginal Summit and GNWT negotiators worked on and exchanged proposals into the fall of 2005 at which point their respective mandates had been exhausted.

Discussions were initiated at the political level and have continued with aboriginal leaders, but no agreement-in-principle has been reached. Premier Handley, Minister Roland and Minister Bell met with aboriginal leaders on the matter in June 2006. I subsequently met with leaders in December 2006.

Difficulties arise in trying to come to agreement on how revenues should be shared amongst NWT governments in the absence of knowing what the net fiscal benefit from the revenues will be, a matter yet to be negotiated with the Government of Canada. In order to overcome this difficulty, the GNWT has proposed principles to guide the sharing of resource revenues in lieu of actual amounts.

The federal Department of Finance showed little support for the May 2003 joint proposal although some negotiations did take place to try to define a fair and adequate net fiscal benefit. In April 2005, Finance Canada made a proposal that the NWT receive a minimum of $30 million with any further sharing to be reviewed upon completion of the work of the federal Expert Panel on Equalization and Territorial Formula Financing. The GNWT did not accept the federal offer.

4. Can the Premier outline a strategic plan that demonstrates how northerners will react, should we not get a satisfactory resource revenue or devolution agreement within the next year?

Over the past 10 months, the GNWT has received positive commitments from the new Prime Minister and Minister of Indian Affairs and Northern Development that reaching an agreement on devolution and resource revenue sharing is a priority. We are working hard to try to reach an agreement-in-principle before the end of this fiscal year.

5. What will be the process to get the aboriginal governments a fair share of the resource revenue agreement and the devolution agreement?

The GNWT intends to continue to press the Government of Canada for a fair deal on the net fiscal benefit for the NWT from resource revenues through all available avenues including national fiscal imbalance discussions, devolution discussions and territorial formula financing discussions. At the same time, the GNWT will work with aboriginal governments to develop a fair sharing arrangement.