Political tremours in Ottawa are shaking confidence in the fiscal fortunes of the Yukon.
The territory has profited from federal Liberal Party goodwill for many years. But the sugar daddy is in danger.
Prime minister Paul Martin’s minority government is sucking air after being repeatedly walloped by testimony at the Gomery Commission inquiry, which is probing the sponsorship scandal.
And its collapse might affect the territory’s financial fortunes, say opposition politicians.
“The current government in Ottawa could fall any day now, even before the federal budget is passed,” NDP leader Todd Hardy told the legislature.
“The Yukon is in a very vulnerable position. The members of this house are being asked to approve $784-million worth of spending for this fiscal year, but 72 per cent of this government’s revenue for this year is supposed to come directly from the federal government.”
Such reliance on a “fragile minority government” is going to require some “shrewd planning,” said Hardy.
However, “not one nickel” of the Yukon’s $784-million budget announced in March is jeopardized by early-election rumours in Ottawa, said Premier Dennis Fentie.
“Whomever may be in office in Ottawa, we will expect and work towards the same goals that have already commenced,” said Fentie.
But the focus of the federal Liberals has clearly shifted from economic solidarity that is so vital to the Yukon, to compromise and cancellation as politicians cling to power.
For instance, federal Health minister Ujjal Dosanjh decided not to attend a recent meeting with regional Health ministers.
“We have no understanding on why he cancelled it, but we’re not concerned about that whatsoever,” said Fentie.
“We’ve already accomplished a great deal in increasing our ability to deliver health-care services to Yukoners and we’re going to continue to focus on improving our health-care system.
“I would find it highly unlikely that any national government would reduce our ability to deliver a standard of health care here for our citizens North of 60 that every other Canadian in this country enjoys.”
But the same can’t be said for the $120-million “northern strategy” Martin pledged to Canada’s three territories in December.
“That has not been given spending authority by Parliament, and we have not booked one nickel of it,” said Fentie.
“We now have a federal government committed to partnering with us in building the North’s future.
“Great progress has been made, and I have no concerns that changes in government in Ottawa would compromise or diminish the progress that we’re making now and the potential for progress in the future.”
But Fentie, Northwest Territories Premier Joe Handley and Nunavut Premier Paul Okalik aren’t waiting on Ottawa.
They met in Yellowknife last weekend to discuss a pan-northern strategy of their own.
“We met in Yellowknife on a number of issues, and they included the northern strategy,” said Fentie.
“It included our agreement to proceed with an economic development opportunity strategy in the North to reduce what we’ve experienced, historically in the past, of outflow of benefits, profits and revenues and retaining as much of that as we can.”
The North needs to retain its capacity to build “megaprojects” like natural gas pipelines, added Fentie.
The Yellowknife meetings yielded a “discussion paper” on sovereignty and security in the North.
“In these times of shifting geopolitical landscape, globalization, climate change and energy concerns, the focus on Canada’s North is greater than it has ever been,” says the report.
“Northerners have always been affected by world events and world powers, and Canada’s North holds increasing strategic importance.”
That importance is military, the report notes first, given the Canadian North’s proximity to the northwest Pacific and Russia.
Furthermore, the report predicts Arctic marine travel will increase as sea ice melts in the Northwest Passage, which is “claimed by Canada to be internal waters, but claimed by some other countries to be an international strait.”
Climate change, oil and gas development and controversial US plans for a ballistic-missile-defence system are also highlighted.
“The US military is currently working to field five ground-based missile defence interceptors at Fort Greely in central Alaska, less than 200 kilometres from the Alaska/Yukon border,” says the report.
“Northerners remain concerned with the possibility of contamination from either the construction of sites or their contents, that ballistic missile defence sites near Canada could become targets for attack, and that Canada’s North could be subject to nuclear or biological ‘debris’ from objects shot down during attack.”
The report’s conclusion recognizes the North’s military and economic potential, its capacity as a climate-change meter and its need for modern communications.
“The issue of the status of Arctic waters will regain prominence as pressure increases for Arctic development and shipping access,” it predicts.
“Taking a lesson from the past, Canada cannot exercise its sovereignty and ensure northern security for the future without the involvement of northern peoples today.”
Canada’s new international policy statement indicates support for their involvement, said Yukon MP Larry Bagnell.
“As part of the first-ever comprehensive strategy for the North, Canada has reasserted its sovereignty and is collaborating with the Arctic Council and circumpolar countries to protect the people and fragile environment of the Arctic,” Bagnell said in a release.
The policy statement — drafted by the federal departments of Foreign Affairs, International Trade, International Co-operation and National Defence — solidifies the North in Canada’s overall strategy.
“I am very excited that we have been able to have this new recognition for the North, that I have fought so hard for, into Canada’s foreign and defence policy,” said Bagnell.
National Defence plans to increase surveillance and control of the Arctic with satellites and manned and unmanned aircraft.
The department will also beef up search-and-rescue aircraft and communications infrastructure.
The new military commitments may be evidence of an election campaign, which the Globe and Mail speculates could be called by June 27.
Regardless, the Yukon is on equal footing with Canada now, said Fentie.
“The Yukon government, being masters in its own house vis-a-vis devolution, will have a lot to say about whatever federal government takes office and how they involve themselves with us.”