In 1993, then Prime Minister Brian Mulroney began the largest nation-building project Canada has seen since Newfoundland joined confederation in 1949 ”” to draw Canada’s definitive northern borders. Those borders would form a new jurisdiction in the Canadian federation and be based entirely on historical and present Inuit occupation. In doing so, Canada could lay claim to all of the lands and waters of the Arctic Archipelago.

Mulroney’s government signed a contract with the Inuit of Nunavut asking them to ”œcede, release and surrender to Her Majesty The Queen in Right of Canada, all their Aboriginal claims, rights, title and interests, if any, in and to lands and waters anywhere within Canada and adjacent offshore areas within the sovereignty or jurisdiction of Canada” on behalf of them and ”œtheir heirs, descendants and successors.” In return, Canada agreed to create a new legal jurisdiction in the Canadian federation and to build an Inuit majority public government.

The resulting agreement, the Nunavut Land Claims Agreement set a new precedent in land claims and in government-Aboriginal relations. Not only is Nunavut the largest land claim settlement in history (approximately 2 million square kilometers or 20 percent of the country) but it is also a binding contract with an aboriginal group to cre- ate a public government that is representative of the popu- lation. This creates a unique situation in which the federal government is legally obligated to ensure that the Nunavut government has the financial and human resources to fulfill its functions as a government, and both governments are obligated to ensure that Inuit are trained to occupy 85 per- cent of the positions within the Nunavut public service.

In signing the Nunavut Land Claims Agreement, the Inuit of Nunavut agreed to forgo the typical Aboriginal self-government arrangement that exists in other land claim settlements and Indian reserves across Canada. The Inuit of Nunavut opted instead for a government that would control an entire jurisdiction in the Canadian fed- eration. The decision stemmed from the belief that within the Canadian political system, a government like those of the Canadian provinces would be best suited to deliver the rights and bene- fits provided by the Nunavut Land Claims Agreement.

It is now 15 years since the Govern- ment of Canada promised to hand over the powers of governance to pub- licly elected leaders, but it has not yet lived up to this engagement. After sever- al attempts at negotiation and requests for arbitration, the Inuit of Nunavut have launched a $1-billion lawsuit against the Government of Canada for failing to fully implement the Agreement.

The lawsuit was filed in 2006 in the Nunavut Court of Justice by the Inuit land claim organization Nunavut Tunngavik Incorporated (NTI). In 2007 the federal government filed a motion to force NTI to include the Nunavut government as a co-defendant in the suit, stating that they had equal respon- sibility for implementing the land claim agreement. This motion was dismissed by the court on the grounds that the Nunavut government was not a signatory to the land claim agreement. The federal government has since appealed this decision.

It is my contention that the fate of Nunavut is intimately linked to the credibility of Canada’s claim to Arctic sovereignty. Indeed, the delays in implementing the Agreement and the persistent gaps and problems Nunavut faces in terms of fiscal autonomy and governance considerably weaken Canada’s claim to the Arctic lands and waters. In failing to provide Nunavut all the means to ensure its economic, social and cultural development,

Canada weakens the most compelling legal argument to support its claim: that of historic title based on Inuit occupation. In fact, given the inherent constitutional limits of territorial gov- ernments to provide necessary levels of public services, giving Nunavut full provincial status should be considered very seriously.

Although the federal government has created the new legal jurisdiction of Nunavut and its government, it has withheld the funding and support required in order for the Nunavut gov- ernment to provide the social, cultural and economic benefits promised in the agreement. Following the creation of the Nunavut government, Ottawa did not provide the funding and training initia- tives needed to transform the Nunavut government into a predominantly Inuit public service. This was a key promise the Crown made in the Nunavut Agreement. Thus, Nunavut’s govern- ment remains woefully understaffed and unable to deliver essential public servic- es effectively.

Why has the federal government fallen so far short of its end of the deal? One could argue that the department charged with implementing the Nunavut Land Claim lacks the necessary mandate or proven experience to deliver on Ottawa’s promises, particularly the promise of building a government.

Criticism of the Department of Indi- an and Northern Affairs (INAC)’s ability to perform its functions runs deep. In 1996, the Royal Commission on Aborig- inal Peoples determined that INAC was ”œevasive or negligent on the matter of meeting federal treaty and claims obliga- tions” and that ”œit operates under a lega- cy of colonialism and paternalism.” The commission actually recom- mended INAC be disbanded, a recommendation that was never implemented. Seven years later these criticisms resurfaced. In a 2003 report to the House of Commons, the Auditor General of Cana- da highlighted INAC’s inabil- ity to devolve powers and implement land claims in Nunavut, the Northwest Territories and the Yukon. In her report, the Auditor General conclud- ed that INAC has inadequate manage- ment structures, lacks accountability and has not worked to support the full intent of the Nunavut Land Claims Agreement.

But ultimately it is likely a case of mistaken perspective: Ottawa is view- ing the building of the new territory as being no different than the oversee- ing of an Indian reserve ”” something to be administered in perpetuity by the Department of Indian and Northern Affairs ”” rather than view- ing the creation of Nunavut as a com- mitment from one public government to another.

Paradoxically, Canada does have proven experience in delivering gover- nance and development assistance abroad. In countries such as the Ukraine, Haiti and Afghanistan Canada has proven its ability to coor- dinate the provision of assistance from multiple federal departments and agencies. By lending experienced administrators, technical staff and funding packages to the governments of developing countries, Canada has helped to build their necessary institutional capacities and expertise for the delivery of public services and governance. The success of Canada’s development work overseas is based on the premise that assistance can only be successful if it is controlled and delivered by the local government, elected by the local people.

Unfortunately, we have not drawn on this experience while attempting to deliver development and governance assistance in Nunavut. The federal gov- ernment should have set up a develop- ment team at the service and command of the newly elected territorial govern- ment. In practice, this team would have a mandate for building capacity within the Government of Nunavut. Similar to Canada’s international development work, the team would have clear time- lines and objectives and, most impor- tantly, an exit strategy.

Another key problem has to do with the fact that territories are constitutionally inferior to provinces. Although Canada’s territories are inde- pendent jurisdictions in the federation, they differ from provinces in four key ways: they cannot borrow money; they do not have a constitutionally protect- ed right to equalization and transfer payments to ensure that standards of living, infrastructure and social service s are on par with citizens living accross the country; they do not own the lands and resources within their own bound- aries; and they do not receive any royalties from those resources.

True, the federal government does provide payments and transfers to the territories through the Territorial Formula Financing (TFF) to help them provide equal levels of services, infra- structure and health care. However, unlike provinces, territorial govern- ments have almost no other sources of revenue. In Nunavut, for example, TTF transfers represent 84 percent of the government’s revenue. Furthermore, what little revenue can be collected from other sources, such as corporate or personal income tax, is subtracted or clawed back at the rate of 80 per- cent. The level and structure of the TTF transfers effectively acts as a disincen- tive for economic development and a barrier to self-sufficiency.

The complete inadequacy of the TTF program was highlighted in the 2006 report to Parliament from the Expert Panel on Equalization and Territorial Formula Financing.

In its report the Panel stated that ”œwhen Nunavut was established as a territory on April 1, 1999, TFF funding was not designed (nor was it adequate) to address existing deficiencies in health, housing, education, and social infrastructure, programs, and servic- es.” The panel indicated that even adjustments to the TFF would not be sufficient to address the serious gaps in Nunavut’s programs, services and infrastructure. The panel concluded that Nunavut’s serious disparities must be addressed on an urgent basis with targeted funding programs.

Despite rhetoric from the recent federal Throne Speech on strengthening sovereignty, governance and devolution in the north, Nunavut’s government is prevented from generating the financial means to provide its citizens with basic infra- structure and public services. While provinces are typically able to raise these revenues through resource devel- opment royalties, the Government of Canada (through INAC) has retained ownership and control over Nunavut’s lands, waters and natural resources. As a result, Nunavut does not receive any royalties from the exploitation of its natural resources.

In the longer term, this will likely become even more problematic, as Nunavut’s natural resources are some of the most important in the world, geologically comparable to those of South Africa, Australia and Brazil. With significant deposits of diamonds, gold, iron and uranium, and an estimated 20 percent of Canada’s oil and gas r e s e rves, Nunavut’s economic potential is greater than most provinces’. Given this fact, it is shameful that more than 50 percent of Nunavut’s youth do not graduate from high school, that the suicide rate is nine times the national average, that 54 percent of the popula- tion lives in crowded housing condi- tions, and that Nunavut’s citizens have a life expectancy 10 to 15 years lower than that of southern Canadians.

Simply put, the Nunavut govern- ment has been given the responsibility of providing education, health care, roads and jobs, but not the means to properly fund these services. The fed- eral government has not agreed to set- ting timelines and milestones for devolving powers to the Nunavut gov- ernment, and it does not have any exit strategy. It is clear that in the coming years, there will continue to be an overt federal presence in the owner- ship and administration of Nunavut’s natural resources.

Of particular concern is its unwill- ingness to transfer control of the oil and gas resources located between the islands of the Arctic Archipelago to the Nunavut government. Ottawa claims that the seabed resources of the Arctic Archipelago are offshore of Nunavut and thus fall under federal jurisdic- tion. But Canada’s whole claim to ownership over this seabed rests on the existence of Nunavut’s boundaries ”” which were drawn to include all of the waters of the Arctic Archipelago ”” based on Inuit ”œtraditional and current use and occupation of the lands, waters and land-fast ice therein.”

It seems as though Canada would like to have it both ways: claiming on the one hand during discussions of Arctic sovereignty that the internal waters of the Arctic Archipelago belong to Nunavut, and on the other hand during discussions of oil and gas revenues that the same internal waters do not belong to Nunavut. But why should Nunavut’s jurisdiction over its internal waters be different from British Columbia’s jurisdiction over the internal waters of the Strait of Georgia between the British Columbia mainland and Vancouver Island?

The paradox of Canada’s claim to ownership and control of these Arctic waters is that Canada has not taken any steps to build Nunavut’s transportation infrastructure and capacity to administer Arctic waters and communities. There are no roads linking any of Nunavut’s communi- ties, no ports to administer marine transportation or regulate Canadian Arctic waters, and communities are completely dependent on diesel elec- tric generation for power. This impairs both Nunavut’s economic develop- ment and Canada’s ability to adminis- ter and control its northern waters.

In the provinces, this infrastruc- ture is normally acquired through provincial-federal cost-sharing initia- tives or provincial public-private part- nerships. In Nunavut, however, it is INAC, and not the territorial govern- ment, that controls access to both types of financial program. Since Nunavut’s creation, INAC has been issuing the permits for natural resource development companies to build the major transportation and energy infra- structure needed to access and exploit Nunavut’s vast stores of natural resources for private and federal profit. Despite the needs of Nunavut’s com- munities, and the pleas from Nunavut’s government for assistance, none of this infrastructure will be linked by road, rail, ship or power line to the isolated communities in close proximity to most of these major developments. As a result, an entire network of highways, railroads, icebreakers, deepwater ports, and airstrips, as well as hydropower and wind power generating stations will provide no benefit to the commu- nities of Nunavut, nor will they be available to Canada to administer its northern waters or for Nunavut to gain badly needed infrastructure for com- munity economic development.

The federal government does have a policy of devolving ”œprovince- like” powers to territorial govern- ments, but its implementation is entirely dependent on its own whims and priorities. For instance, it took no less than 105 years to devolve all of the ”œprovince-like” powers to the Yukon Government. This process was com- pleted in 2003. But Yukon still does not have ownership of its natural resources, nor has it been granted provincial status.

The idea of an evolution of the Canadian federation north of the 60th parallel, that is, Nunavut’s ascension to full provincial status, has been sorely missing from recent devolution negotia- tions. These negotiations have been focused merely on gaining ”œprovince- like” powers. In my view the Nunavut government has entirely underestimated the power of its greatest bargaining chip: to assert or deny Canada’s claim to Arc- tic sovereignty.

Historic precedent exists for admit- ting territories into Confederation as provinces. On three occasions in Canadian  historya prime minister had the necessary foresight and vision to create new provinces from its northern territories. In 1870, the government of Sir John A. Macdonald negotiated a settlement with the Métis people of Rupert’s Land and created the Province of Manitoba. Manitoba did not undergo a period of transition as a territory; it was admitted into the Cana- dian federation as a full province with the power to provide services to its peo- ple and targeted payments to bring its level of governance and infrastructure on par with the Canadian provinces.

Again in 1905, Sir Wilfrid Lauri- er’s government created the jurisdictions of Alberta and Saskatchewan from its northern territory and admitted them as provinces with sim- ilar province-building financial incentives. Full ownership and con- trol of natural resources was later transferred to the three prairie provinces in three separate resource transfer agreements in 1930.

With the creation or admission of a new province in the Canadian federation comes, of course, a robust pack- age of financial and infrastructural benefits. Canada has built railroads and highways, hundreds of small craft harbours and deepwater ports and even interprovincial ferry services to link its provinces from the Atlantic to the Pacific. When Newfoundland joined confederation in 1949, a Royal Commission was launched to recom- mend measures for bringing it up to the level of services as the other provinces. As a result, Newfoundland received multi-million dollar pay- ments over more than a decade to ease its transition to provincehood.

Ownership of onshore and coastal oil, gas and mineral resources is a key attribute of being a province in Canada. New precedent in Atlantic Canada further allows provinces to capture 100 percent of royalties from offshore oil and gas resources. If Nunavut is to have the means to pro- vide services on par with those of southern Canadians, why should its terms of union be any less favourable than those afforded to the other Canadian provinces?

Great consideration should be given to the strategic importance of financing and constructing trans- portation infrastructure for Nunavut communities. Providing Nunavut with ports, roads, airstrips, rail- road and intercommunity ferry services is essential to unlock Nunavut’s vast stores of natural resources and to administer marine transportation in Canadian A rctic waters. With even nominal foresight and northern strategy, the federal govern- ment could help secure much of Nunavut’s infrastructure needs within the next 10 years. Industry is waiting for the financial incentive to develop Nunavut’s mineral and petroleum resources ”” incentive that could easily take the form of shared-cost trans- portation and energy infrastructure, devised to benefit both the industry and the communities of Nunavut.

Canada’s northern strategy needs to be more than broken promises, out- dated colonialist institutions and mean- ingless posturing from the throne. Nunavut’s citizens are not second-class Canadians, they are the key to defining Canada’s northern borders, its Arctic sovereignty and its credibility as a northern nation.

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