Plundering the north for hyper-profits

The Government of the Northwest Territories (GNWT) is pinning its hopes on the devolution of natural resources and acquiring the right to collect resource royalties from the federal government. [...] Although the profits from most mines and petroleum operations in the NWT remain confidential, it is estimated that in 2004 the Norman Wells field made a net profit of 87.0% while Rio Tinto reported an EBITDA1 rate of return of 75.2% and an after tax rate of return of 34.5% on the Diavik diamond mine. [...] These royalties are collected by the federal government under the authority of the Canada Petroleum Resources Act3 and the Canada Mining Regulations.4 While it is commonly understood that the ability to capture resource royalties is essential for the future public welfare of the NWT, the actual value of resource royalties is not widely known. [...] This lack of public transparency and discussion is particularly problematic as the Government of the NWT (GNWT) attempts to negotiate the devolution and transfer of natural resources, including the right to collect resource royalties, with the federal government. [...] Resource royalties collected by the federal government are reviewed in terms of both absolute value and as a percentage of the value of the resources extracted.