Ullakut. Good morning, Mr. Chair and members of the Standing Committee on Finance. Thank you for giving the Nunavut Association of Municipalities, NAM, the opportunity to appear before you today.
My name is Elisapee Sheutiapik. I am NAM's president. I am the mayor of the city of Iqaluit, which is Nunavut's capital. Here with me today is our CEO, Lynda Gunn.
NAM is a member of the Federation of Canadian Municipalities and serves the interest of 25 municipalities of Nunavut, 24 of which are not tax-based communities.
Nunavut's population is 29,000 people, approximately 85% Inuit. People of Nunavut refer to themselves as Nunavummiut, the people of Nunavut. Nunavut's footprint makes up one-fifth of Canada's land mass and is rated tenth among 64 resource-rich regions in the world by the mining industry.
You've challenged Canadians to make contributions to your 2006 pre-budget considerations on how to strengthen Canada's economy, economic health, and prosperity. You say we must be prepared and must be proactive, and that decisions must be taken today to ensure that we are able to do what is needed today. Today, NAM and its members are prepared to participate proactively with the rest of Canada in attaining that vision of prosperity.
Since we appeared before this committee last fall, we have proposed a strategic sustainable development plan to our community governments, which they have endorsed and have directed us to proceed with. To proceed, however, we need some key decisions by the federal government that recognize the unique challenges facing the communities of Nunavut.
In NAM's submission to the Expert Panel on Equalization and Territorial Formula Financing, we pointed out that the “expenditure needs gap” in the territorial formula financing, the TFF, is not just a measure in accounting ledgers; it can also be measured in inadequate housing, poor health, low education, and inadequate infrastructure.
The expert panel's report cited many examples of how Nunavut is even more challenged by conditions associated with poverty than its sister territories and said that an adjustment to the TFF is not sufficient to address specific gaps in programs, services, and infrastructure in Nunavut.
It concluded that:
Without urgent concerted action to improve housing, health, education, and quality of life for people living in Nunavut, particularly Inuit people, there is little hope that things will change for the better. The Panel urges the Government of Nunavut, the Government of Canada, Inuit leaders, and a wide range of organizations, groups and agencies to come together to address these issues before the situation gets even worse.
While Nunavut is resource-rich, its people and communities will not receive significant benefits from their resource wealth under the current federal fiscal regime. All the public resource revenues from the Northwest Territories and Nunavut's resources flow directly to the federal government.
Canada's public accounts show that during the last five years reported, the federal government took $830 million of northern resource wealth out of the north over and above federal taxes. In 2004 and 2005 alone, it took half a billion dollars.
The expert panel spoke to this issue as well, saying:
The potential of resource developments in the territories is perhaps the best opportunity they have to achieve their dreams of self-sufficiency and self-reliance. Provinces with rich natural resources are able to benefit from those resources. The same principle of net fiscal benefit should apply to the territories.
Nunavut cannot afford to let its resources be taken without fair compensation. Moreover, it is NAM's position that the communities of Nunavut need a direct and fair share of revenues. International development agencies refer to a common phenomenon called the “resource curse”. It is the paradox that natural resources can generate enormous wealth, yet communities in resource-rich regions have poor economic growth, inadequate investment in health, education, and sanitation, and poor social conditions.
The resource curse is integral to northern resource development history: profits go to outside investors; business goes to outside services and suppliers; wages go to outside labour; public revenues go to central governments; and the vast majority of local people are barred from participation by poor education, poor infrastructure, and inadequate services.
Interestingly, one group that recognized the curse and is proposing means to eliminate it is within the mining industry. The International Council on Mining & Metals, of which the Mining Association of Canada is a member, has taken an initiative on sustainable community development in mining regions. Its chairman, who is also the chief executive officer of Newmont Mining, recently said: “...central governments have failed to use tax revenues from mining companies effectively to fund basic public services and empower local governments.”
The need to strengthen local governments in mining areas outlines the importance of a partnership approach. Local agencies are the best means of improving the services and facilities available to affected communities, but they cannot expect to suddenly have the capacity to plan and implement large community development plans. Most national governments must take the lead in supporting these bodies and be assisted by international donor organizations and companies. The companies can also help by planning their own projects, infrastructure, and social investment as part of their regional development. This can raise the chances that prosperity will follow through to the region, and also avoid a cycle of local dependence on companies and social programs.
In conclusion--