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Exploration spending down; regulatory system to blame?

Jeanne Gagnon
Northern News Services
Published Wednesday, April 22, 2010

INUVIK - Make the Northwest Territories a more attractive place to invest by streamlining the regulatory regime to attract exploratory dollars, recommends the president of the NWT and Nunavut Chamber of Mines.

Estimates from Natural Resources Canada (NRCAN), say exploration expenditures in NWT were at $29.5 million in 2009, down from $148 million in 2008 - an 80 per cent drop. Last year, expenditures in Nunavut were $189 million and $75 million in the Yukon. For 2010, NRCAN's preliminary estimates shows expected exploration expenditures in the NWT to more than double at $66.3 million.

NNSL photo/graphic

Neil McCrank speaks to businesspeople and politicians at the 2010 NWT Chamber of Commerce AGM held in Yellowknife last week. - Jeanne Gagnon/NNSL photo

Part of the reason for the decline, said John Kearney, president of the NWT and Nunavut Chamber of Mines, is the NWT is not currently seen as an attractive place to invest.

"Part of it is because of what is perceived to be a complicated regulatory environment. The second one is (difficulties) to land access," he said.

It's not easy to get access to land, said Kearney, as large parts of the territory are protected areas or parks, for instance. He added getting permits within a reasonable time for mining projects or exploration is hard.

"They (the other two territories) are believed to be more attractive. They are believed to have a more positive outlook for mineral resources," he said. "While the economic recession impacted exploration generally, the NWT was the worst hit."

The mining industry, local communities as well as the aboriginal and NWT governments should all work together to increase the territory's attractiveness as a place to invest and explore, said Kearney.

"From a geological point of view, I'm very optimistic but I think we have to make it more attractive and easier to explore," he said. "I think if all parties work together in their own best interest, it can be done."

A few years ago, the federal government mandated Neil McCrank, former chairman of the Alberta Energy and Utilities Board, to examine regulatory reform. The central tenet of his July 2008 report was that the Mackenzie Valley Land and Water Board should be established as the only land and water board in the NWT.

"In the last couple years, there is six times more exploratory spending in the Yukon and Nunavut than there is in the NWT. (This is evidence) the system is not working the way it should," said McCrank to the audience of business people and politicians at the NWT Chamber of Commerce AGM last week.

After his speech, McCrank said his recommendations were complex and far-reaching and will require a significant amount of discussion among parties before they're implemented.

"I don't think it's just industry that has an urgent timeline. I think governments do and I think, frankly, the communities that signed the land claims agreement have an urgency as well, from what I've heard from them," he said.

"Regulatory reform is always a subject that should be covered by governments and the public - they should be interested in it. That debate should go on indefinitely and try to get the best system you can get."

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