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Arctic Yearbook 2014
1973, its GDP peaked at $178 million dollars, or $25,500 per citizen (in 2005 dollars). However,
overconsumption and poor revenue management quickly erased this expansion and, by 2007, its
GDP had shrunk to less than $19 million dollars, or $1,900 per citizen (Bauer 2014a). The economy
has never recovered, and the government remains fiscally troubled (Bauer, 2014a). Mining further
caused serious environmental consequences: 80 percent of the island’s land was stripped and 40
percent of its marine life killed (Shennon 1995).
Drawing on lessons from Nauru and other similar cases, some governments have established funds
to sustain wealth from non-renewable natural resources. In some jurisdictions, the establishment of
a wealth fund arises out of legitimate concerns about the potential impacts that large, volatile, and
exhaustible natural resource revenues have on the stability of an economy. In other regions, fund
establishment comes from a desire to promote transparent and accountable management of
expected revenue flows. Another common objective for establishing a fund is to build an
endowment for future generations or the elderly. However, natural resource funds are not always
established with the public or national interest in mind. In some countries, for example Azerbaijan,
natural resource funds enable governments to avoid public scrutiny or bypass formal oversight
(Bauer, 2014a).
The NWT Heritage Fund: Legislation (Act), Current Status, and
Opportunities
In preparation for new resource royalties flowing from Devolution, legislation allowing for the
establishment of an NWT Heritage Fund was passed in 2012, based on the framework of the
Alberta Heritage Fund (GNWT 2013b).14
In the fall of 2013, the NWT’s Ministry of Finance undertook public consultations on the budget
in seven regional centers in the territory. At these public consultations, the NWT’s Ministry of
Finance proposed that 5 percent of resource revenues be placed into the fund, or approximately
$2.25 million (as of 2013) (Wohlberg 2013), while 95 percent would be earmarked for
infrastructure investment and servicing the GNWT debt (GNWT 2013a).15 This sparked a healthy
public debate over the appropriate deposit amount for the fund, given other perceived pressing
needs, such as funding infrastructure or servicing debt (Wohlberg 2013).
On February 10th 2014, MLA Wendy Bisaro tabled the public policy report A Question of Future
Prosperity: Developing a Heritage Fund in the Northwest Territories (Briones et al. 2014) in the NWT
Legislative Assembly, in order to press the Minister of Finance to commit more than 5 percent of
revenues to the fund, and to introduce legislation to administer it. Following the debate, the Minister
of Finance announced that a 25 percent share of the GNWT royalties from the extraction sector will
be allocated to the new Heritage Fund. Regulation was passed in 2013 prior to the NWT Fund
beginning to accrue significant revenue (Northwest Territories Heritage Fund Regulations 2013).
A Question of Future Prosperity