Mining activity in Canada's north is set to boom, with 140,000 new jobs forecast in the next few years.
In anticipation of the forecast growth, Nunavut Premier Eva Aariak is pushing the federal government for a "devolution" of powers which would allow the territory more control over resource development.
Nunavut, created in 1999, is the last jurisdiction in Canada in which major decisions about its land and resources are made in Ottawa.
"It makes economic sense," says Aariak, speaking to Sunday Edition guest host Karin Wells. "Right now, none of the royalities goes to Nunavut. Under devolution, we would be able to share in that."
Currently, Nunavut has one mine operating. The Agnico-Eagles Meadowbank gold mine contributes to about 30 per cent of the territory's GDP last year. Another four mines are being developed in the region.
While environmental assessments are conducted under the aegis of the Nunavut land claims agreement, it's Ottawa that gets final say on whether a mine is given the green light.
"Soon we will see an ice-free Northwest Passage," Aariak said. "Before long, the world will be at our doorsteps."
Aariak said negotiations for devolution need to start immediately. More than half of the territory's population is under 25 years old, and Aariak said she would like to have a say in what kind of opportunities residents will have in the future.
"Devolution will provide us the power for controlling the pace of development and allow us to have environmental stewardship," she said.
Aariak said in the end, it's about "self-reliance" and making sure the territory can "stand on its own two feet."
Diversification better than mining
However, Catherine Coumans of MiningWatch Canada cautions Aariak about moving so quickly towards having Nunavut govern its own resources. The non-profit watchdog tracks environmental and sustainability issues around mining.
Coumans, in an interview on Sunday Edition, said the premier would do better to concentrate on diversifying instead of relying on mining exploration.
"There's no promise those mining jobs would go to people in the territory," Coumans said. "In fact, a mining company says it's bringing back Chinese foreign temporary workers to a mine in B.C."
Coumans said if you examine how mining has affected developing countries — such as Ghana and Zambia — you'll find none of them have benefitted from that type of resource development.
"The Oxford Policy Management group [which works with the World Bank, NGOs and UNICEF] examined that issue and found that in 10 years, countries that only developed its natural resources were worse off," Coumans said.
Coumans said that the level of governance needed to make sure the territory doesn't end up worse off than when it began developing its resources is "quite costly."
'Mining companies will siphon money off through transfer pricing...profits are made by the subsidiary so no taxes are paid.'—Catherine Coumans, MiningWatch Canada
Regulating mining companies and making sure their profits remain within the country's borders involve creating institutions for governance prior to any development.
"Mining companies will siphon money off through transfer pricing," explained Coumans. "They set up subsidiaries in tax havens around the world and they enter into transactions in which profits are made by the subsidiary so no taxes are paid [where the mine exists]."
Coumans said Nunavut would be better off spending what money it has on education and infrastructure rather than having to regulate mining concerns.
She also points out that mines have a short life and in the end, it's left up to taxpayers to pay for the resulting legacy costs — dealing with the toxic waste left behind.
"There needs to be more critical awareness around the costs associated with mining and not just the benefit," Coumans said.