Liberals call for new devolution talks

The Yukon needs a better devolution deal, says Liberal Leader Arthur Mitchell.

The Yukon needs a better devolution deal, says Liberal Leader Arthur Mitchell.

Our agreement with Ottawa to assume province-like responsibilities over the management of natural resources looks positively stingy compared with what the Northwest Territories signed on January 26.

Yukon’s devolution agreement, which was struck in 2001, only allows the territory to keep a maximum of $3 million in mining royalties annually. Anything above that goes to Ottawa.

The NWT’s deal, by comparison, allows the territory to keep half of its royalties, up to a certain percentage. Yellowknife expects to take in $60 million in royalties this year, thanks to the territory’s operating diamond mines.

Now’s the time to strike a better deal for the Yukon, said Mitchell. With three hardrock mines now operating, and more expected to open in the next few years, he worries the territory could miss out on “hundreds of millions of dollars.”

This hasn’t been much of a worry for the territory until now, because until last year, the only operating hardrock mine was Minto. It sits on First Nation land, so royalties flow to the Selkirk First Nation.

Floyd Roland, the Northwest Territories’ premier, has come under fire for signing the agreement without winning over the support of First Nations. Similarly, “we often see the Yukon take the sole lead, and then afterwards try to deal with First Nations,” said Mitchell.

“We think it would be better to do this jointly.”

That’s what the Yukon has already done, said Premier Dennis Fentie. “As recently as September of 2010,” the territory has engaged in talks with First Nations to develop a joint position on how to sweeten the Yukon’s devolution deal, he said.

The Yukon’s devolution agreement was negotiated by a former Liberal government, Fentie noted. And he boasted that federal transfers to the territory have ballooned under his leadership.

Fentie has no plans to raise mining royalties, he said. “We have a regime here that allows us to compete globally. We’re not going to jeopardize that,” he said.

Mining is once again booming in the Yukon. Two new mines that opened last year are expected to shift into full production in 2011: Yukon Zinc Corporation’s Wolverine mine near Ross River, and Alexco Resources’ Bellekeno mine near Keno City.

The Klondike is once again at the centre of a major gold rush, as companies hurry to stake and drill properties surrounding the White Gold property, which has been acquired by Kinross, one of the world’s biggest gold producers.

Another exploration boom is underway near Mayo, at ATAC Resource’s Rau property, north of Keno City.

At Howard’s Pass, near the Northwest Territories border in southeast Yukon, Selwyn Resources, a Chinese-backed venture, is launching a major drill operation to prove up what’s suspected to be one of the biggest unexploited lead and zinc deposits on the planet.

Victoria Gold Corporation recently submitted to regulators their plans to mine their Dublin Gulch deposit northeast of Mayo.

And Western Copper Corporation aims to develop Casino, a massive, low-grade copper deposit 300 kilometres northwest of Whitehorse.

Casino, if it ever opens, would be a monster of a mine, creating an estimated 650 jobs while ore is mined for 30 years. It would also generate a lot of royalties: Mitchell figures it alone “has the potential to be in the $200-million range.

“Obviously, we’re not going to receive all of that. But we should receive some of it.

“There’s a lot of activity going on,” he said. “And there’s a likelihood that a lot of them will lead to mines.

“The missing ingredient, in our view, is royalties.”

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