Devolution resource money less than predicted: GNWT
NWT government is projecting $40 million in resource revenues for 2014-2015 fiscal year
The Northwest Territories government has lowered its forecast of how much it will collect in resource revenues for the 2014-2015 fiscal year.
The government had originally estimated it would collect a share of revenues totalling $60 million for the year.
In its recently unveiled 2015-2016 operations and maintenance budget — the first to give an idea of how much the N.W.T. will benefit financially from devolution — the government revised that figure to $40 million.
Robert Hawkins, a Yellowknife MLA, called the downward revision "unwelcome news" yesterday in the legislative assembly.
Resource revenues are largely made up of royalties mining and oil and gas companies pay on minerals, metals and hydrocarbons they extract.
Staff at the Department of Finance say the lower forecast is due to a number of factors. They say that in the lead up to devolution the federal government shared little information about how much it collected in resource revenues. Since the devolution agreement came into effect on April 1, the territorial government began collecting half of the resource revenues generated in the Northwest Territories.
Department staff also say that previous forecasts were based on a five-year average while current forecasts now take into account such information as the mining plans of the territory's three diamond mines, which could make for a more accurate forecast.
According to the department, royalties from diamond mining account for 90 per cent of resource revenues in the territory.
That percentage would likely be different had the federal government transferred its one-third share in the Norman Wells oil production field to the territorial government — which it did not — as part of devolution.
In the fiscal year 2013-2014, the federal government collected $84 million in profits from the field, according to the Public Accounts of Canada.
Aboriginal share of royalties
The Inuvialuit Regional Corporation, the Northwest Territory Métis Nation, the Sahtu Secretariat Incorporated, the Gwich'in Tribal Council and the Tlicho Government collectively will receive about 18 per cent of the territorial government's share of resource revenues. The aboriginal governments will share about $10 million, down from an initial estimate of $15 million.
How much each aboriginal group gets is based on the cost of living in that region as well as population, according to an agreement signed with the territorial government in early 2014.
Aboriginal groups are expected to receive their first payment by July 2015.
Factoring out the $10 million going to aboriginal groups and the $7.6 million going to the NWT Heritage Fund, the territorial government will have $22.4 million left from its share of 2014-2015 resource revenues.
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