Conservatives want NWT to retain all resource royalties

A 2015 aerial view of the Kelvin Camp diamond exploration site near Gahcho Kue mine - Pat Kane
A 2015 aerial view of the Kelvin Camp diamond exploration site near Gahcho Kue mine. Pat Kane/

Delegates at the Conservative Party convention in Halifax have voted to back a proposal for the three northern territories to retain 100 percent of their resource royalties.

At present, the Northwest Territories retains 50 percent of its royalties from mining, oil, and gas – a sum which is then split between the territorial government and its Indigenous partners.

The amount retained is also capped at five percent of the territory’s gross expenditure base (which is a rough approximation of what the NWT spends on public services in a given year). Recently, the cap has hovered between around $70 million and $80 million.

The policy resolution passed by convention delegates reads: “The Conservative Party believes it is essential to the economic development of the three northern territories that they retain 100 percent of resource royalties through comprehensive resource revenue sharing agreements with the federal government.”



The resolution also pledges a Conservative government would “support strategic investments … to enable Northern solutions to employment, educational, health and social challenges.”


David Connelly, a mining consultant and the national Conservative Party’s northern regional vice-president, said the resolution demonstrated Conservatives’ commitment to helping the North become self-sufficient.

Connelly applauded his party’s proposed removal of the cap on royalties, while acknowledging the territory does not currently generate enough in royalty income to hit that cap.

He told Cabin Radio: “The cap doesn’t matter too much if there is not much mining, oil and gas, or royalty generation going on. But the removal of the cap says if you do more to develop [the industry], you keep all of the royalties from that.



“We don’t have to go to Ottawa cap in hand, saying: ‘We’ve sent you all our money, now can we please have some back to build a road or build a power line.’”

The territory is currently pressing the federal government for hundreds of millions of dollars in financial aid to complete a series of transformative infrastructure projects. Those initiatives range from the Mackenzie Valley Highway, and a road through diamond mining country to Nunavut, to a program connecting the territory’s power grid to the south.

‘Unilateral decisions’

In total, the territory needs to fill a hole in its finances worth some $2 billion or more to complete those projects in the next decade.

Taking the Mackenzie Valley Highway as an example, the present Liberal government has contributed $102.5 million to advance an initial phase of the project. However, the estimated full cost of the highway is greater than $700 million.

Connelly said the Conservatives’ resolution would not cure such a deficit overnight, but “would ensure there was a long-term, ongoing flow of revenue to the territories from the development of their natural resources” alongside a commitment to federally fund infrastructure.

Connelly claimed the resolution – which he said was backed by more than 99 percent of convention delegates –showed Conservatives were prepared to let the North make its own decisions.

“No more unilateral decisions from Ottawa for, let’s say, a moratorium that shuts down oil and gas on the Beaufort,” he said, alluding to an earlier Liberal government decision which deeply aggrieved Premier Bob McLeod.

The resolution does not mean Andrew Scheer’s opposition will immediately pursue change at parliamentary level, but indicates a future Conservative government would attempt to turn the resolution into federal policy.



The Northwest Territories is currently represented by a Liberal MP in Michael McLeod, who received a 48 percent share of the territory’s vote in 2015. Floyd Roland, the Conservative candidate, finished in third with 18 percent, behind the NDP’s Dennis Bevington – who had been the incumbent – on 30 percent.

That result represented a 23 percent swing toward the Liberals, a record for the riding. A Conservative has not represented the territory in Ottawa since Dave Nickerson, a mineral exploration executive who held office from 1979 to 1988.

Asked if the territory’s Conservatives had begun planning for the 2019 federal election, Connelly said he understood a committee had already “looked at some 20 names” as it works to select a candidate.