Saving for the future in Canada’s North West

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April 1 2014 marked a historic moment for Canada’s North. Home to only 43,000 citizens, Canada’s Northwest Territories makes up 14% of Canada’s landmass and 18% of its freshwater supply. Under the Devolution Agreement, federal responsibilities of managing public land, water and resources in the Northwest Territories transferred to the Government of the Northwest Territories (GNWT).

For the first time, the GNWT will start to manage the royalty revenues that flow from mining diamonds, gold, natural gas and other resources within the territory. Two years ago, the GNWT adopted legislation allowing for the formation of the NWT Heritage Fund to save a portion of resource royalties for future generations. As extractive industries perceive a new wave of opportunity and an era of exploration in Canada’s North, how can GNWT ensure sustainable development for its citizens today and tomorrow?

Saving for the future

The GNWT new Heritage Fund was created in recognition of the fact that revenues from non-renewable resources will not last forever. The goal of the NWT Heritage Fund is to save a portion of royalty revenues collected today into a locked fund for 20 years and to transfer its use to future generations in NWT. The remainder of royalty revenues will be used for current government operations with a priority on infrastructure development and debt repayment.

In February 2014, GNWT Finance Minister announced 5% of resource royalties would be allocated to the Heritage Fund. After steadfast disapproval from several members of the legislative assembly, the Minister revised the savings figure to 25%.

Natural resources belong to citizens of the territory. To achieve all three benefits of resource royalty inflows into GNWT of enabling infrastructure investment, debt repayment and savings into the Heritage Fund, the government needs to ensure good governance. It does not matter if the headline saving numbers are 5%, 25% or 50% – the Heritage Fund will not thrive without proper governance.

Following lessons learned from other savings funds of resource-endowed regions (eg Norway, Alaska, Wyoming), the GNWT has a rare opportunity to start fund governance right with strong deposit and withdrawal rules. If deposit (what goes into the fund) and withdrawal rules (what is allowed to be disbursed out of the fund) are unclear with room for interpretation, then the Heritage Fund’s savings objectives can waver.

For example, the Alberta Heritage Trust Fund was established in 1976. However, deposit payments varied from 30% of non-renewable resource revenues being deposited annually to 15% to finally all deposits being stopped in 1987. The Fund was used by government to invest in direct economic development and for social investment purposes.

The Alberta government began depositing money again in 2005 and the Savings Policy was restructured in 2013 and will see the Fund retain all of its income for future investments. The market value of the Fund in 2013 was $16.8 billion. However, research has shown that if the Alberta Fund had had stricter deposit and prevention of withdrawal rules, the Fund could be nestling on $42 billion + (following Alaska’s Permanent Fund rules) or $121 billion+ (following Norway’s Petroleum Fund governance rules) worth of endowment. Learning from Alberta’s historical lessons, GNWT has a unique opportunity in time to establish strong governance rules from the beginning.

A culture of saving

Literature and practice both indicate the success of savings funds is dependent on creating a culture of saving. One of the most important and effective methods of enforcing governance is civic engagement and participation. The mechanics of running a Heritage Fund is a technical topic. However, the ownership of the Fund is by the people. For the first time since devolution, on Tuesday May 27, 2014 a public dialogue will be hosted on the topic of governance for the new GNWT Heritage Fund in Yellowknife, Canada. The public dialogue will be the first step in raising public awareness and familiarity with the aims, objectives and governance of the Heritage Fund. Saving for future prosperity is no easy task and this will be the beginning of civic dialogue for generations to come.

*Julia Fan Li [2008] is a Gates Cambridge Alumna. She was a 2013/2014 Action Canada Fellow and co-authored the reportA Question of Future Prosperity: Developing a Heritage Fund in the Northwest Territories”. This report was tabled in the GNWT Legislative Assembly on February 10, 2014. Action Canada is a national fellowship programme for Canadians who have demonstrated leadership and a passion for Canada. Picture credit: Wiki Commons and NASA Visible Earth

An ideology behind evolution

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Philosophy and science aren’t often easy to mix. But because I study human evolution, calls for me to speculate on the subject are often unavoidable. The evolution of our species is a fairly intriguing topic for most people and tends to incite strong reactions, whether from curious people who want to know more or those who view evolution as a threat to other ideologies and want to challenge my thinking. Philosophy often enters the discourse when someone is familiar with the tenets of natural selection and asks me how I can possibly derive meaning and significance from life if I genuinely believe humans are nothing but the product of millions of years of random processes that only boil down to which individuals are fortunate enough to survive and reproduce. They ask me how anything can matter at all if life is only about getting your genes into the next generation.

These are good, interesting questions that I enjoy thinking and talking about. Every paleoanthropologist has surely thought about how we conceptualise humans’ place in evolution, how we should exist in relation to other creatures on the planet, and if there is some “meaning of life” behind it all beyond the essential survival and reproduction. However, studying human evolution and recognising that our species is a product of millions of years of development and changes and little miracles has never given me any sort of existential crisis about the meaning of life. If anything, it has given me a great deal of respect for our species, other species, and the Earth itself.

In the roughly six million years since the human lineage split from the chimp lineage, our ancestors went through some pretty incredible challenges to survive and spread across the globe. Each challenge shaped our species, such as the need for communication and language, advanced cognitive skills, and great dexterity for tool making and use. All of this led to who we are today, and there were lots of opportunities where it could have gone wrong, where the odds were against our ancestors and it’s remarkable that they managed to survive and ultimately thrive. Knowing that I’m the product of these millions of years of “random processes” and very cool ancestors gives me quite

the opposite of an existential crisis – it excites me and motivates me to learn about our evolutionary history and make discoveries about what led to our unique species. It also simply makes me glad to be alive, to experience new things, to learn and explore and have fun.

This became especially clear to me when I spent time at Olduvai Gorge, a fossil site in Tanzania often called “the cradle of humankind” due to its wealth of fossils of human ancestors. While there I found a stone tool that we estimated to be about three million years old. Someone, and not even a fully human someone, had held it millions of years ago, and now I was in the same place, holding it in my own hand. This shared experience and connection with such a distant ancestor easily highlighted evolution’s significance to me.

There’s also the argument that evolution is all about survival and reproduction, and some critics would have us believe that these are inherently meaningless things, that life simply must be about more than that. Of course, acknowledging the truth of evolution doesn’t preclude someone from finding meaning in other ideologies, such as religion. But I believe the reverse is also true, that acknowledging the significance of evolution shouldn’t cause anyone to lose meaning in their life. Survival and reproduction are important, and in scientific terms they can come across as a bit bland and mechanical. But survival essentially just means living your life and doing whatever you choose with it. People give their everyday lives meaning in a myriad of ways. As for reproduction, I’m sure one would be hard-pressed to find any parents who didn’t find the experience of creating a new life and raising a child to be incredibly meaningful.

Recognising the role of evolution and having a meaningful life are not mutually exclusive, and learning about the origins of our species should not strip modern people of our sense of meaning and significance, wherever we derive it from. At the very least, it should make us thankful that nature and evolution have instilled us with brains that let us even contemplate meaning at all.

*Mariel Williams [2013] is doing an MPhil in Human Evolutionary Studies. Picture credit: Kongsky and http://www.freedigitalphotos.net.