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Arctic Yearbook 2014
demonstrates the risk when fund rules can be ignored, particularly if they are not clearly established,
or if exceptions allow for significant departures from the rules (The Fraser Institute, 2013). As there
were no rules governing minimum resource revenue deposits into Alberta’s Fund, regular
contributions to the Alberta Fund were suspended from 1987 until 2005 and minimum required
contribution deposit rules were established only in 2013 (Revenue Watch Institute & Vale Columbia
Center 2013c). Enacting strong deposit, withdrawal, and investment rules will help mitigate potential
risks.
Issue 3: Establish Robust Transparency and Oversight Mechanisms – Including Appointment
of a Supervisory Council to Oversee the NWT Heritage Fund
A key recommendation in the policy report (Briones et al. 2014) was expanding the Secretariat of the
Fund to form a Supervisory Council. The Supervisory Council would provide independent expert
finance directors, and be composed equally of representatives of various government authorities,
legislators, Aboriginal Governments, financial experts, academics, and civil society, to oversee the
fund on behalf of the government. The majority of members must have security of tenure and be
completely independent of the government for this model to work effectively. This Supervisory
Council would replace the Secretary of the Financial Management Board and report directly to the
Minister of Finance, as well as to the Legislative Assembly. Successful funds are not only an
outcome of good fiscal policy; they are facilitated by robust internal controls, supervision, public
oversight, and transparency. For the Supervisory Council to be successful, qualified individuals must
be appointed, with a strictly vetted job description process, to avoid the risk that the council could
be a channel for nepotism and patronage. The Supervisory Council should include diversity of
representation from independent representatives of the public as well as financial experts. Further
elaboration by the authors, in consultation with the GNWT, is being undertaken to support
regulation in this area.
NWT’s Current Fund Governance Model
Figure 4: Existing Structure of the NWT Heritage Fund’s Governance
A Question of Future Prosperity