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Northwest Territories Premier Bob McLeod begins two days of talks Wednesday with Prime Minister Stephen Harper and officials in Ottawa.

James MacKenzie/The Canadian Press

The Harper government is on the brink of making the Northwest Territories a province in all but name by ceding federal control over land, resources and water.

Much of the territorial government has arrived in Ottawa. Premier Bob McLeod, his cabinet, deputy ministers and aboriginal and business leaders begin two days of talks Wednesday with Prime Minister Stephen Harper and officials.

The people and government of the territory stand to benefit from hundreds of millions of dollars in new resource revenues under the agreement, which will see the territorial and not the federal government primarily responsible for approving resource developments.

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Mining output in NWT is expected to almost double in this decade. And the move fits with the Conservative government's determination to retreat from federal environmental oversight in most jurisdictions.

The principal aim is to finalize devolution, as it's called, of control over natural resources from Ottawa to Yellowknife.

"It seems like everything is coming together," Mr. McLeod said Tuesday in an interview.

The territory is "on the verge of achieving devolution. … We are advancing on many fronts," he said.

Asked for a time frame, he replied: "I would say we are about two weeks away. We just have a couple of items to work out."

It couldn't come at a better time for the people of the territory. The Conference Board of Canada released a report this week predicting that global demand will push mining output in NWT from $732-million in 2011 to $1.3-billion in 2020. Four new mines are expected to open in 2015, and a fifth in 2017.

This will return mining activity in the territory to the level it enjoyed in 2007, before the recession and declining output created a slump.

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"Mining is the future economic driver of Canada's North," the report concluded. The Northwest Territories will be doing much of the driving.

Jason MacDonald, spokesman for Aboriginal and Northern Affairs Minister John Duncan, confirmed that the government intends to reach a devolution agreement with NWT, though he would not commit to the timing of a final deal.

"Concluding an agreement will be an important and positive step in the evolution of Northern governance and will deliver economic benefits to NWT," he said in an e-mail.

"We will continue to work with our partners in NWT to reach an agreement that creates a practical, innovative and efficient governance model for the territory."

The territory also has vast untapped reserves of oil, natural gas and hydro-electric potential. But inadequate infrastructure is a chronic obstacle, there are substantial environmental challenges and multiple regulatory hurdles can cause crippling delays. Most important, meeting aboriginal concerns is integral to any new development.

Mr. McLeod said that four of the seven aboriginal governments in NWT have signed agreements-in-principle on devolution, which he believes is sufficient for it to proceed.

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Devolution should ease the regulatory burden by concentrating approvals at the territorial level.

During the meetings, territorial leaders will also be pushing for federal assistance to construct the Mackenzie Valley Highway (estimated cost, $1.8-billion) and to lay down the Mackenzie Valley Fibre Optic Link (estimated cost, $62-million).

Such a link would greatly expand the existing use of Inuvik as a centre for receiving satellite transmissions, while bringing education, health and economic benefits to communities along the route.

In part because native residents of the territory actively participated in the development of the diamond-mining industry in the last decade, the unemployment rate in the territory is 7.4 per cent, slightly above the national average of 7.1 per cent, but below the unemployment rate in Ontario and Atlantic Canada.

Under previous devolution agreements, the territorial government assumed responsibility for many of the major powers administered by provinces, including health care, education, social services, highways, forestry management and airport administration.

But control over resources is one of the key powers of the provinces, and something their governments jealously guard.

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A previous agreement that devolved control over natural resources to Yukon in 2003 helped make it economically one of the fastest-growing parts of the country, with unemployment at only 6.1 per cent, though the territorial government is pressing Ottawa for improvements to the original deal.

The government of Nunavut has also entered into devolution talks with Ottawa.

Given its increasing wealth and prospects for growth, the Northwest Territories could make a case for one day becoming a province.

But with a population of only 43,000 Mr. McLeod believes that continued reliance on federal transfers and opposition from existing provinces make that a distant prospect.

If the resource boom is sustained, however, it could increase the territorial population to the point where it one day could make the case for provincehood.

"I think we're just a few decades away from it," Mr. McLeod predicted.

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