The Northwest Territories' regulatory system for industrial development remains flawed, and the territory's economy is suffering in part because of it, according to the man who reviewed the system for the federal government.

Speaking to a packed room at an N.W.T. Chamber of Commerce event in Yellowknife Wednesday night, Neil McCrank said one only need look at the long regulatory process for the proposed Mackenzie Valley pipeline to see the system's flaws.

"I don't think, in the entire dominion of Canada, we could populate all of the boards that currently exist in the Northwest Territories," McCrank said, referring to the numerous land and resource management boards in the territory.

A retired chairman of the Alberta Energy and Utilities Board, McCrank was appointed by Indian and Northern Affairs Minister Chuck Strahl in 2007 to recommend improvements to northern regulatory processes, which development proponents and critics alike have said are slow, inefficient and complicated.

McCrank said the territory's economy is suffering in part because it takes a long time for a mining, oil or gas project to be approved under the current processes.

"In 1999, the mineral exploration in the N.W.T. was 18 per cent of the national total. A few years later, it's two per cent and going down," he said.

McCrank's report, released in July 2008, called for a restructuring of the N.W.T.'s regulatory system with fewer management boards.

"The regional land and water boards would be merged into the one central Mackenzie Valley land and water board. There'd be one," he said.

As for the report itself, McCrank said he doesn't know how or when the federal government will respond to his recommendations.

McCrank spoke on Wednesday to a largely sympathetic crowd of just under 100 business and government leaders, including John Curran, marketing manager with Discovery Air in Yellowknife.

"There are more people out exploring on the land these days. Still, the majority of the work up here seems to be going in the Eastern Arctic," Curran said.

"I think if we can get the regulatory regime in the N.W.T. sorted out, then we'll see more activity up here again, too."