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Richard Gleeson
Northern News Services
Nobody knows that better than the First Nation claiming the diamond-rich Lac de Gras area, site of the first two mega-mines.
Yellowknives Dene chiefs have referred to their Akaitcho First Nation pay-out from Ekati as "peanuts" compared to the profits BHP Billiton is reaping.
Under the terms of a private agreement chiefs say they were coerced into signing by a federally-imposed deadline, the five Akaitcho communities share a $1 million annual pay-out from the mine. Ekati produced more than $600 million in diamonds in its first year of operations.
Is the rest of the NWT getting a fair share of the profits from diamond mining?
"Right now? Absolutely not, not at all," said Finance Minister Joe Handley. A deputy minister of Resources, Wildlife and Economic Development during the ushering in of diamond mining, Handley said the lion's share of corporate taxes and all of the mineral extraction royalties go to the federal government.
"There are far too many people who are rotating out of the south right now rather than living in the North and working at the mine. While we're thankful for the jobs we get and the business we get, we're just not getting our fair share."
BHP Billiton spokesperson Graham Nicholls disagrees with Handley's contention that "hundreds" of diamond mine workers identified as 'Northerners' in the company's hiring reports actually live in the south.
Nicholls said he's confident all of the workers identified as northerners live in the North.
Handley said the government is currently considering options for securing some of those profits to deal with increased pressures the diamond industry has put on government services and infrastructure.
Those options include the introduction of a mineral tax.
"It's a possibility we are looking at," Handley said.
The legislation for a new tax is ready to go. It was drafted three years ago, when one of Handley's predecessors, John Todd, threatened to introduce a tax "that would choke a mule," if BHP Billiton did not agree to provide rough diamonds from Ekati to Northern cutting and polishing plants.
Other options include an increased payroll tax (which would be rebated to Northern residents) and continuing to lobby the federal government for investment in Northern infrastructure.
"I haven't heard of any such proposal, but clearly it would be of concern to us," said Nicholls of the possibility a new mineral tax.
Nicholls said the company is caught in the cross-fire of a dispute between the territorial and federal government over how royalties and taxes from the mine should be shared.
"That's not a situation a very significant investor in the NWT is pleased to be in," he said.
Last year Handley attempted but failed to introduce a highway toll that targeted the mining industry.
The toll was to generate revenues that would be used to rebuild and maintain highways. Though Handley emphasized the government is considering, not planning, a new tax to apply to the mines, the idea is appealing to Kevin O'Reilly of the Canadian Arctic Research Committee.
Under the terms of the funding agreement between the GNWT and federal government, none of the revenue generated by a new tax would be clawed back by Ottawa.
"If we want to make sure there's something for people to do after the diamonds and oil and gas are gone, we need to do something about this now," O'Reilly said.
"(The territorial government's) foremost interest is to protect the rights and interests of people in the NWT and they're not doing it."
Handley said the benefits of a new tax would be temporary. The revenues it would generate would likely be clawed back once the federal-territorial funding agreement is renegotiated, in 2004.
