Arctic Yearbook 2014 - Page 207

  207   production began in 1970, a plan for savings was only established twenty years later, with the implementation of their Savings Fund – the Government Pension Fund-Global. Early on, a decision was made to invest in urgent spending needs, such as education, social services, and infrastructure, with the position that oil wealth should be used to develop a qualitatively better society with more equality (Norwegian Asset Management Department 2013). Transfers to the fund began in 1996, following these primary investments (Drohan 2013). The fund has strict rules, including regular, comprehensive and independent internal and external audits. Further, it is one of most transparent funds in the world. The NWT, with a vast landscape containing diamonds, gold, silver, copper, zinc, oil and gas, holds a potential resource wealth that has attracted interest from investors, oil and mining companies (Conference Board of Canada 2013). The development of these resources promises to make Canada’s North more accessible, with significant economic, social, and political implications (Irlbacher-Fox & Mills 2007). A concern expressed by the NWT citizens and leaders is what the economic and social future holds once extraction has been exhausted, and how the territory can use resource revenues to invest sustainably over the long-term for the benefit of its future generations. While a range of policy choices exist to invest in future generations, the GNWT has chosen to save a portion of its resource revenues through a Heritage Fund.12 Northern Mining Projections: How Can Minerals Be More Than Just a Boom? The NWT has huge resource potential. According to the territorial government, there are an estimated 90 billion barrels of undiscovered recoverable oil, 1,670 trillion cubic feet of recoverable natural gas, and 44 billion barrels of recoverable natural gas, along with proven deposits of rare earths, cobalt, bismuth, zinc, lead, copper and silver, all of which are in various stages of development (GNWT 2012b; The Conference Board of Canada 2013). In 2011, the NWT produced over $2.1 billion (Canadian dollars) in total mineral shipments, a staggering total for a jurisdiction with a population of only 43,000 residents. There are currently four operating mines in the Territory, including the Ekati Diamond Mine, Rio Tinto’s Diavik Diamond Mine, De Beers’ Snap Lake Diamond Mine, and Cantung Tungsten Mine, while four other mines are pending production: Canadian Zinc’s Prarie Creek, Gahcho Kue Diamond Mine, Avalon’s Nechalacho Rare Earth Metals, and Fortune Mineral’s NICO site (Personal Communication, September 29, 2014, NWT and Nunavut Chamber of Mines).13 Economic growth in the NWT is expected to rise by 1.3 percent in 2014, 2.5 percent in 2015, and 7.9 percent in 2016, driven largely by resource development (Conference Board of Canada 2013). The Heritage Fund offers a timely opportunity for the NWT to capture wealth from this forecasted economic growth, and to mitigate the risk of the ‘boom and bust’ cycle which often characterizes economies dependent on non-renewable natural resources. Lessons from Other Jurisdictions Policy makers in the NWT can draw a cautionary lesson on how to address boom bust economies from the Island of Nauru, a clear example of recklessly wasted natu