Yellowknife (Mar 09/05) - A fight over resource revenue royalties may cause trouble before a widely expected devolution agreement for the territory comes this spring.

Premier Joe Handley says the lion's share of resource royalties from mining and oil and gas activities should go to the territorial government, while Aboriginal Summit executive director Don Morin is demanding that they get half.

Don Morin: "First Nations want 50 per cent, minimum."

The summit represents most of the aboriginal governments in the territory except for the Dehcho First Nation.

Morin said aboriginal governments will need at least 50 per cent if they're going to run their own health, social services and education programs effectively.

"That's our mandate from the leaders," said Morin. "Fifty per cent, minimum."

The federal government collected only $61.9 million from the NWT's diamond industry last year, but the GNWT expects that number to top $7.5 billion in royalties from the three mines over their lifetimes.

The Mackenzie Valley Pipeline project is expected to produce even richer dividends for the government - $21.7 billion over 30 years.

Resource royalties are a key component of the devolution agreement that will see Ottawa hand down province-like powers to the NWT. Currently, almost all revenue collected from royalties on oil and gas and mining go to Ottawa.

Handley said he expects a devolution agreement with Ottawa to include annual resource royalties on top of the $725 million the GNWT currently collects in federal grants. He said that could put an extra $500 million a year into GNWT coffers year by 2015.

The premier said a 20 to 30 per cent share for aboriginal governments would be more appropriate, although he conceded that the GNWT workforce may actually shrink once more aboriginal governments come into power.

"It has to be tied to the delivery of programs and services," said Handley, who called Morin's demand a "bargaining position."

"None of the chiefs have told me they want 50 per cent."

The premier said, while aboriginal governments will need a share of royalties to start up programs and run them, the territorial government will still be required to handle most of the service workload, including capital infrastructure projects like roads and bridges.

However, Morin said aboriginal governments will need a lot more than 30 per cent. He indicated that the GNWT may not be a suitable model for governing the territory once land claims and self-government agreements have concluded.

"We should be getting more than that," the former premier said.

"The existing government structure we have at the Northern level, is that the best thing for the North? Maybe not, because we've really never looked at how the North should be governed."

Handley is expecting the federal government to deliver an agreement-in-principle on devolution sometime this spring, possibly by early April.