Yellowknife (May 11/05) - Premier Joe Handley is coming home from meetings in Ottawa with a potential cash answer to First Nations demands that have stalled the Mackenzie gas project.

"There was an agreement that would see money flowing immediately to deal with socio-economic impacts in communities along the Mackenzie Valley," Handley said in a conference call, Tuesday, with Investment Minister Brendan Bell and Northern media.

Handley wouldn't reveal the extent of Ottawa's offer, which amounts to an interim devolution deal, before he meets Friday with aboriginal leaders in Calgary.

"We'll be able to talk more about what is a realistic number and how we would make this work," he said.

"I want to compare our number with what they're thinking. We also need to work out what will be included in socio-economic benefits."

Imperial Oil shut down engineering work on the $7 billion project last month, charging that First Nations demands amounted to "hundreds of millions of dollars" for schools and hospitals and were beyond the scope of access and benefits agreements.

The money would start flowing from Ottawa, Handley said, "as soon as there is an agreement. It would be an annual amount and would continue until a devolution agreement is completed."

The money for First Nations' socio-economic agendas, Bell said, "should smooth the way to resuming negotiations on access and benefits" with Imperial.

The commitment from Ottawa provides the territorial government with a clear picture of revenue under devolution, and "fiscal certainty" in its own revenue negotiations with the pipeline proponents, Bell said.

Handley also secured a commitment in meetings with Deputy Prime Minister Anne McLellan, Indian Affairs Minister Andy Scott and Finance Minister Ralph Goodale that Ottawa will sign an agreement in principle on devolution this spring.

Wrinkle to plan

The Liberal government's defeat "would be a wrinkle to this," Handley said, but "we have been meeting with leaders of the other parties. So far we've had a positive response to honouring these commitments."