Yellowknife (Jan 17/05) - Premier Joe Handley spent a good part of 2004 cultivating his friendship with Prime Minister Paul Martin, and expects it to pay off.

While his predecessor Stephen Kakfwi sometimes paved a bumpy road with former prime minister Jean Chretien, the freshmen Handley and Martin have so far gotten along swimmingly.

The load got heavier for Joe Handley, who started last year off as premier of the Northwest Territories. Handley expects even bigger things in 2005. - NNSL file photo

"You can tell in his eyes, you can tell in statements, that he means what he's saying," says Handley, who became premier around the same time Martin took over the top job in the country -- December 2003.

"When he commits to something, he commits to it. I know if I was to phone him today, by the end of the day he would be calling me, even if he had to reach me at home, in order to follow through on what he intends to do."

Handley can only shake his head when he thinks of the anti-Ottawa antics going on right now in Newfoundland.

That province's premier, Danny Williams, recently ordered Canadian flags removed from outside of government buildings to protest Martin's refusal to give the province a bigger share of off-shore drilling royalties.

"Danny started out right," the premier says.

"He took a stand, and I think the prime minister respected that, but you can also go too far sometimes with people. It just gets to the point where they're going to say, 'no, the heck with you. I don't have time for this.'"

Handley insists that he's no shrinking violet, however. Three years ago, while finance minister, Handley blasted former minister of Indian Affairs and Northern Development Robert Nault, whom he said wasted his time and offended Northerners after reneging on a finance deal.

Handley says if the territories' relationship with Ottawa takes a sudden turn for the worse, he will make his feelings known.

"I know what it's like when someone offends me," says Handley.

"I push back, and I'll push back hard."

For now, though, things seem to be rolling along smoothly. Ottawa made a number of announcements last year, offering new money for the North - including an extra $10 million a year for health care, and $40 million over three years to fund Ottawa's Northern Strategy in the NWT.

News that the proposed Mackenzie Valley Pipeline took another step forward when its investors filed for regulatory approval, capped off a relatively good year, says Handley.

The goodwill over the last year wasn't shared with Ottawa alone. Handley says the territorial government has also made inroads in its relationship with aboriginal chiefs and municipal leaders.

While outstanding issues remain, particularly in their discussions with the Akaitcho and Deh Cho, Handley says they are getting along better this year.

"We're not fighting with each other," says Handley.

"It's not all roses here. There are some rough spots we'll have to work our way through."

Painful cuts

The year didn't go by without some pain, Handley continued.

In an effort to shave expenses off this year's budget, his government was forced to cut several jobs and services, including eliminating the court registry offices in Hay River and Inuvik.

Handley admits they may have been able to avoid making some cuts had they been a little better prepared, and had Ottawa been a little quicker delivering the $10 million windfall the GNWT received later in the year.

"Cutting $20 million out of our operating budget may not seem big, but it is if you start getting into core programs," says Handley.

"I think we went through a lot of pain over the last year, which may not have been necessary if we had been able to make more progress earlier."

Another disappointment was his government's inability to convince diamond mine companies to invest more resources in secondary industries, like diamond polishing.

The government had asked the companies to leave 10 per cent of their "rough" diamonds in the North for processing, "but they haven't come anywhere close to that.

"It's something we'll have to deal with again," says Handley.

One diamond polisher, meanwhile, Sirius Diamonds - which is located in Yellowknife - went into receivership after defaulting on a $8 million loan from the territorial government.

Despite these troubles, Handley believes a secondary diamond industry is still possible in the North.

"I don't think we ever planned to stop at polishing and selling them," said Handley.

"The idea was to always go the full spectrum and get into jewelry. It's something we'll have to work on this year."

Same-sex marriage coming

One piece of legislation expected to come before the legislative assembly this year is a bill on same-sex marriage.

The premier doesn't expect it to have an easy ride, but now that the Supreme Court of Canada has given it the green light nationally, Handley says the territorial government will have to make changes to its Marriage Act.

"Gay rights have to be recognized whether we like it or not," says Handley.

"It is based in the Charter, and the courts have upheld it. We don't believe for a minute that we're going to somehow challenge the Charter or the Constitution of Canada."

Handley predicts the biggest news of all this year will be devolution. He says it may be a long shot, but he believes the transfer of powers from Ottawa could come this year. "(The prime minister) agreed to substantial progress by this spring," says Handley.

"I think it's possible to do it."