Arctic Yearbook 2014 - Page 209

  209   Figure 2: Predicted Size of NWT Heritage Fund in 20 years if annual average royalties are 45 million (75 percent of $60 million) and the fund achieves a 5 percent rate of return. The predicted size of the Fund, at a 25 percent deposit rate, could result in approximately half a billion dollars in twenty years (Figure 2). The authors project a 5 percent rate of return based on benchmarks set by other public savings funds. One benchmark used was the Canada Pension Plan’s average annual return of 7 percent over the last ten years (Canada Pension Plan Investment Board 2014). However, recognizing the Canada Pension Plan as a much larger sized fund with a long-term investment mandate, whereas the NWT Heritage Fund is smaller and could have multiple mandates, the authors also considered Chile’s two lower-risk natural resource wealth funds as benchmarks for the NWT. Chile’s Economic and Social Stabilization Fund made an average return of 3.6 percent in USD from July 2013 – July 2014 while Chile’s Pension Reserve Fund made an average return of 4.67 percent during the same time period (Government of Chile Ministry of Finance 2014). To project a growth rate for the NWT’s fund, the authors averaged the Canada Pension Plan’s average annual return over ten years with the returns from the two Chilean funds from 2013-2014. The resulting projection, as illustrated in Figure 2, was a 5.09 percent annual return for the NWT fund, assuming that moderate risk will be taken for the fund’s investment strategy. Early Engagement: Building Relationships for Research in Public Policy Throughout the public policy initiative that led to this paper,16 citizen and government engagement was a strong objective guiding the research methodology. Three approaches to consultation were undertaken: 1. Roundtable discussions with industry, government, Aboriginal governments and other stakeholders; 2. Public dialogues; and 3. Open discussion and exchange with the GNWT. In August of 2013, a Northern Roundtable was hosted17 in Yellowknife, which focused on critical issues facing the natural resource industry within the NWT. Participants included Aboriginal government and community leaders, elected leaders of the GNWT, representatives from the mining industry, representatives from municipal and federal government, natural resource management experts, and non-profit organizations. The NWT’s newly legislated Heritage Fund emerged as an area of developing public p