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Fentie anticipates devolution strife

The Northwest Territories has almost reached of a devolution transfer agreement with Ottawa.And if it gets a better deal than the Yukon, Premier…

The Northwest Territories has almost reached of a devolution transfer agreement with Ottawa.

And if it gets a better deal than the Yukon, Premier Dennis Fentie will demand a bigger piece of the resource-revenue pie.

“The next devolution agreement, that is certainly coming upon us shortly, will be with the Northwest Territories,” Fentie said in a news conference Monday.

He had just returned from a weekend meeting with Prime Minister Stephen Harper in Ottawa.

“The evidence that we have today suggests that there is probably going to be a better resource-revenue sharing agreement with Ottawa and the NWT than the Yukon has,” said Fentie.

“Should that be the case, the Yukon will immediately demand a re-opening of our devolution agreement with respects to resource-revenue sharing.”

The territories must be the principle beneficiaries of revenues from their natural resources, such as minerals and oil and gas, said Fentie.

Devolution agreements are supposed to guarantee a fair cut of resource revenues to allow the territories to become more self-sufficient and less reliant on transfers from Ottawa, he added.

But the Yukon’s devolution agreement was flawed from the outset, in part because it made Ottawa the principle beneficiary of Yukon resources, he said.

The Yukon receives about $500 million in ongoing funding from the federal government, including more than $33 million specified in the devolution agreement that former premier Pat Duncan signed in 2001.

Under the agreement, the Yukon receives 100 per cent of royalties and stumpage fees on mineral and forestry revenues, up to $3 million.

Anything more than that gets subtracted from the amount that Ottawa regularly doles out to the Yukon.

So if the Yukon makes $4 million from the mining sector, it would keep $3 million and suffer a $1 million cut in federal funding the following fiscal year.

Since devolution took effect, mining royalty revenue in the Yukon has never topped $3 million.

In 2005, total revenues from the mining and forestry revenues brought the territory about $1 million.

Oil and gas revenues are not included in the 2001 devolution agreement.

They are governed by the 1993 Canada Yukon Oil and Gas Accord that, like the mining arrangement, promises the Yukon the first $3 million from oil and gas royalties.

However, if royalties from Yukon oil and gas exceed $3 million, an existing formula splits the revenues between Ottawa and the Yukon.

The formula gives Ottawa 60 per cent of revenues over $3 million, up to $17 million.

So if the Yukon ever made $13 million from the oil and gas sector, it would keep $3 million and suffer a $6-million cut in federal funding the following fiscal year.

The Yukon gives all self-governing First Nations a cut from its share of any resource revenue.

Under Harper, Ottawa wants to leave more benefits from resource revenue in the North than the Liberals did, said Fentie.

“He is committed to providing more powers to the territories, province-like powers,” he said.

“One of the main elements of that is going to be resource-revenue sharing.

“I get the sense that we may be looking at a situation where our fiscal arrangement would be comprised of an exclusion in the actual transfer of non-renewable resource revenues. They’ll be separate.

“Those are the types of incentives that are required to build financial sustainability here in the Yukon.”

Fentie didn’t get any one-on-one time with Harper.

But neither did NWT Premier Joe Handley and Nunavut Premier Paul Okalik, perhaps signifying Harper’s commitment to a pan-northern approach.

But Harper understands the unique challenges facing each territory, said Fentie.

“It’s fair to say the Yukon has a much stronger financial position than the other two territories,” he said.

“We virtually have no debt, which is not the case with the NWT, who are probably very close to their debt limit.”

Fentie has long said he was willing to work with Ottawa regardless of which party is in power.

There are provisions for re-negotiation within the Yukon’s devolution agreement that could have been exercised any time during Fentie’s mandate, said Liberal leader Arthur Mitchell.

The agreement says financial provisions “may be amended with the written consent of Canada and the (Yukon government).”

“(Fentie) has been there for three years, and he could have gotten the prime minister to open this up at any time,” said Mitchell.

“If (Fentie) is critical of the arrangement we have, he should be going back to Ottawa, regardless of who is prime minister and say that … in light of what’s been happening in Nova Scotia and Newfoundland and Saskatchewan, in light of the negotiations in the NWT, we want to level the playing field.”

Contact Graeme McElheran at


School prowler

A suspicious man has been loitering in the woods near Grey Mountain Primary School, say police.

Last week, three separate complaints were lodged with Whitehorse RCMP.

Callers reported “an unknown adult male who was watching students at the Grey Mountain Primary School from a forested area,” say RCMP.

While it is likely the same person, police are not certain.

So far, the man has not spoken to any of the children, states the RCMP release.

Police remind parents, teachers and students to be vigilant and take normal precautions.

The school is also taking action, said Chris Gonnet, public schools director of learning.

Police, parents, classroom teachers and students will be notified, he said.

“We’ll develop a message box around that, making sure that kids are well informed,” he said Wednesday morning.

“But we do it in a manner that we won’t alert them to hysteria or raise the level of concern with them.”

In Riverdale, many children walk to and from school, added Gonnet.

When incidents like this occur, schools “streetproof” students by reinforcing safety messages, he said.

“The standard thing about beware of strangers, don’t talk to strangers, don’t get into cars or go somewhere if a stranger asks you to,” said Gonnet.

While few details about the suspect have been released, police are investigating complaints.

Residents should call police if they see anyone lurking around the school. (CO)