Wednesday, 15 June 2011 12:45 Written by Heather Exner-Pirot

Quebec Premier Jean Charest responds to Opposition questions over the Northern Plan Tuesday, May 10, 2011 at the legislature in Quebec City. THE CANADIAN PRESS/Jacques Boissinot

In the puzzle that is northern economic development, two pieces presented themselves in the past few weeks: the province of Quebec’s ambitious Plan Nord, a 25-year mega-plan covering everything from jobs to the environment; and the Inuit Circumpolar Council’s conservative Declaration on Resource Development Principles. 

Plan Nord, announced by Premier Jean Charest and a host of other ministers and community leaders, seeks to transform the northern part of the province over a period of 25 years and engender investments of over $80 billion. It aims to create or consolidate 20,000 jobs a year and generate $14 billion in revenue for the government and Quebec society, all while promoting environmental sustainability and community well-being.  The initial, committed investment from the province is $2.1 billion over five years, no small sum, that could prove a true catalyst for regional economic development. Critics have derided it as colonial, environmentally irresponsible, and wasteful of public funds. But I can think of a number of northern districts who could only dream of such investment and attention. 

A less enthusiastic approach to resource development was offered by the ICC.  Unable to achieve consensus as an organization over the past few years on how to approach oil and gas development and uranium mining, especially as the democratically elected government of Greenland presses full steam ahead on exploration drilling on its western coast, this document was meant to provide some common ground on the issue. The result is cautious. Resource exploitation is good, it seems, so long as it does not negatively impact the environment. Many previous developments have sacrificed the environment for profits; that was misguided and damaging. But the ICC may now be heading to the other extreme, sacrificing economic development for environmental preservation. I was surprised to see that the declaration’s hierarchy of priorities put “security against unplanned or unintended environmental consequences” above the “improvement of community and regional living standards and overall well-being”.   

Plan Nord and the ICC Declaration are similar in that they are wish lists – they include the things their leaderships would like to see in a perfect world, but are unlikely to happen in the real one. Where they differ fundamentally is in determining what those things are and how to get them. From my perspective, all paths go through the road to resources.

There don’t seem to be any ‘secrets’ for success in northern economic development, just one simple truth: development will stem from the exploitation of natural resources. From a macroeconomic perspective, this is because the North lacks a comparative advantage in all of the other usual suspects. The workforce is small, dispersed and poorly educated, and labour is costly. Transportation is prohibitively expensive where it is not simply impossible. Communications and critical infrastructure are patchy. The weather is extreme and climate change is making it unstable. The region is very far from markets. The picture, in this light, is not promising.

But the potential for resource development is fantastic. The North is loaded with it, and the spoils, in the form of royalties and taxes, would be divided among a comparatively small number of citizens.  Greater resource development will also lead to more jobs, for miners and drillers but also for cooks, janitors, engineers, administrative staff and construction workers. The problem, even now, is not one of a lack of jobs but of a lack of skilled workers.   

The young northern population, especially among indigenous people, may also be a boon. Much has been made of the demographic ‘time bomb’ awaiting the North, but the fact of the matter is that a young population can be a huge advantage because it means growth. There will be a need for more schools and teachers and nurses and colleges and after school programs and cultural events. But this is so much better than the alternative – an aging population, closing schools, dying towns and a reliance on pension benefits – that so many other regions in the world, including many northern ones, are now facing.

None of this is hypothetical. The diamond industry in NWT has raised public revenues and personal income levels, while cutting unemployment. And of course the Athabascan tar sands have made Northern Alberta the richest jurisdiction in Canada. 

Nor is it a panacea. Resource exploitation does not alone provide economic and social well-being – just ask a Nigerian or a Saudi Arabian. Or a Fort McMurryan. But it is the single best possibility to improve the material well-being of Northerners. Both the Plan Nord and the ICC Declaration recognize this fact. Governance that is transparent, democratic, accountable and informed will be an important part of whether such resource development is ultimately beneficial to communities. 

None of this will be as easy as Plan Nord or, as straightforward, as the ICC Declaration implies. Time is a necessary, but not sufficient, condition for economic development to occur in the North. Hard work, ideas and determination, along with a healthy dose of capital investment, are also needed but much less reliable. Plan Nord brings welcome vision to the problem.  Only time will tell if it is successful.