Evaluation of 4.1.1 - Political Development and Intergovernmental Relations - The North

1.2.1 Background and Description

Sub-program 4.1.1 is broken into four distinct areas: (1) Circumpolar Affairs; (2) Devolution; (3) Territorial Relations; and (4) the Grants to the Government of the Northwest Territories and the Government of Nunavut for Health Care of Indians and Inuit. This evaluation will focus on the activities of the Circumpolar Affairs Directorate, including the contributions of INAC to the Arctic Council, and will focus in a second part on Devolution and Territorial Relations in the Northwest Territories and Nunavut. The evaluation will not include part (4) of the sub-program, which relates to Heath Care Grants for Indians and Inuit. This will be assessed in a separate evaluation.

Devolution:

Although under the same sub-program Circumpolar Affairs, Devolution operates with a separate set of priorities and objectives. The Government of Canada has made the Devolution of northern governance a key pillar of the Northern Strategy with the goal of providing Northerners with more control over their own economic and political destiny.

On April 1, 2014, the Northwest Territories became the second territory, (after the Yukon) to take responsibility over governance of its lands and resources. Through a unique revenue sharing plan, Devolution ensures that Northwest Territories residents and Indigenous groups directly benefit from the responsible development of the region's resource potential.^{Footnote 5}

Canada and the government of Nunavut are currently in the process of negotiating Devolution, and, although the topics and approach are unique, the progression of Devolution phases will be similar to Northwest Territories. There will be a multilateral discussion to negotiate an Agreement-in-Principle before reaching a Final Agreement and beginning the implementation and transition process.

Figure 1 illustrates the political territories of Canada's North and the areas that were, and will be, subject to Devolution in Yukon, the Northwest Territories, and Nunavut. It also highlights the vast area north of 60° that is subject to the Arctic Council's activities and the work of the Circumpolar Affairs Directorate.

Source: Natural Resources Canada. 2006.^{Footnote 6}

Text alternative for Figure 1: Area Subject to Territorial Devolution

Figure 1 shows a map of Canada’s territories, highlighting the areas that have devolved or are preparing for devolution. It includes Yukon in the west, the Northwest Territories in central northern Canada, and Nunavut in the east, north of Hudson Bay.

 

1.2.2 Objectives and Expected Outcomes

Sub-program 4.1.1 - Political Development and Intergovernmental Relations operates under INAC's Strategic Outcome for the North as found in the 2015-16 Performance Measurement Framework. There are two expected results for 4.1.1: (1) for Northerners to have greater control over their economic and political affairs; and (2) that community health and safety in the North is strengthened.^{Footnote 7}

The long-term results from the Performance Management Framework include:

• Canadian Priorities, as articulated in the Northern Strategy, are reflected in National Circumpolar cooperation activities
• Devolution of land and resource management to the Government of the Northwest Territories
• Devolution of land and resource management to the Government of Nunavut

The immediate results for the program area include:

• The coordination for the engagement of Canadian partners to influence circumpolar affairs in a manner that supports Canada's circumpolar agenda
• Effective contributions to circumpolar projects and initiatives undertaken by Canada's partners which complement Canada's agenda
• The seamless and smooth transfer of responsibilities to Government of Northwest Territories
• The advancement of Canada's agenda through effective meetings with well-defined objectives and a strong understanding of issues, and successful visits in the territories by the Minister and Prime Minister
• An INAC emergency management plan in place in each northern region, and territorial commissioners being supported in their core functions
• The advancement of Sustainable Development Working Group projects and representation on Arctic Council initiatives
• The creation of effective linkages to multilateral initiatives such as the Arctic Economic Council as per the INAC-Russia collaboration under the Memorandum of Understanding

See Appendix A for the logic model, which further details the expected outcomes of Northern Governance.

1.2.3 Program Management, Key Stakeholders, and Beneficiaries

Part of INAC's role for both Circumpolar Affairs activities and for Devolution and Territorial Relations is to build and maintain effective relationships with territorial governments and other partners in each of the three territories. This is accomplished by participating in bilateral and multilateral settings to help address the unique challenges and opportunities facing the North.

1.2.4 Program Resources

The table included below captures expenditures for the years between 2011-12 and 2015-16 (the years covered in this evaluation). The figures are organized so that they represent the organizational structure of the Northern Affairs Organization at INAC. To accurately capture the entire program, Actual Expenditures for Hospital and Physician Services are included, although that program, as mentioned, is being evaluated separately.

It is important to note that the line item for Devolution and Intergovernmental Relationships includes within the figure the amount for Commissioners. For Circumpolar Affairs, the table below demonstrates the program area's expenditures as well as expenses for supporting the Canada/Russia International Relationship. Finally, it must also be noted that some expenditures are administered by other subprogram areas (such as Treaties and Aboriginal Government), but their budget allocation is found in subprogram 4.1.1. These items are included under the row for Other Expenditures.

Table 1: Subprogram 4.1.1 - Actual expenditures by Fiscal Year ($ dollars), 2011-12 to 2015-16

Not Applicable = n/a
     *Includes expenditures administered by other subprogram areas.^{Footnote 9}

2.3.1 Data Sources

The evaluation findings and conclusions are based on the analysis and triangulation of the multiple lines of evidence described below.

2.3.2 Considerations, Strengths, and Limitations

The following considerations were kept in mind when conducting the evaluation:

• There had been no previous evaluation work conducted in this sub-program area.
• The Performance Measurement Strategy for 4.1.1 was developed in March 2014. The data indicators as found in the Annual Reports do not fully correspond to stated objectives in the strategy.
• The program area encompasses territorial, federal, and international relationships which add to the complexity of the evaluation.
• INAC provides strategic advice and support to the Senior Arctic Official, and a link between Global Affairs Canada and Permanent Participants.
• INAC's contribution to desired outcomes is impacted by Devolution negotiations; therefore direct impacts on northern and Indigenous peoples are difficult to measure or attribute to any specific initiatives.

Managing Relationships

In addition to its intergovernmental and territorial relationships, there are three other areas which receive INAC support and management: multilateral relationships on the Arctic Council; bilateral relationships with specific member states; and, as the lead department of Indigenous and Northern Affairs, the Department is responsible for managing the relationships with the Indigenous Permanent Participants of the Arctic Council.

First and foremost among the relationships relevant to INAC for promoting circumpolar activities is the distinct association with Global Affairs Canada. Global Affairs Canada and INAC have fluid communication and a strong working relationship. The division of responsibilities is clear and efficient as INAC provides the field support, certain expertise, and connections to local partners, while Global Affairs Canada coordinates and fulfills the policy function and supports Canada's international representation.

In addition, the Circumpolar Affairs Directorate has clear relationships with external parties and other participants that operate in an efficient and economic manner. Global Affairs Canada, for example, makes use of INAC's deep knowledge of the North. Key informants indicated that they are able to communicate their ideas and provide input into Arctic Council activities through the relationships they have developed with INAC.

Canada's northern priorities relating to sustainable development, capacity building, health, pollution prevention, climate change adaptation, and Arctic science are areas where the Circumpolar Affairs Directorate forges international and domestic relationships and supports continued progress. Program descriptions, along with feedback from key informants revealed that both domestically and internationally, INAC is thought of in positive terms. The Directorate provides critical links between Canada's foreign policy function and its domestic partners to the result of achieving progress on the Arctic Council's agenda as well as on the working group projects and initiatives.

Striving for partnerships to foster the North underpins the vision of the NAO Next Strategic Plan 2015-2016 document.^{Footnote 22} The Strategy sets out that working with clients and partners is where the best value proposition of the Department is delivered. The document makes clear that partnership, collaboration, and support with clients and partners is essential to delivering the Northern Affairs Organization mandate. This further supports the finding that the Circumpolar Affairs Directorate is a key contributor to managing relationships with key stakeholders in the North.

Key informant interviews highlighted that the role of observer states is changing as Arctic issues become more pressing worldwide and as climate change becomes an issue of interest to the entire planet. Again, INAC plays a key role in this area as it works to bring the knowledge and understanding of local residents in the North to the global stage. As climate change issues become more topical worldwide, there is increased international attention on the circumpolar Arctic, which has a resulting influence on Arctic policy and effectively broadening the scope of the Council.

Each country's chairmanship brings a different focus to the Arctic Council and the efforts of the working groups. The current United States chairmanship has increased the Arctic Council's attention on climate change, and uses the presence of high-ranking political figures, such as the United States Secretary of State, to emphasize its commitment to the issue.

It is recommended that:

Bi-lateral relationships are able to assist the progress of projects and initiatives. They are an important supplemental mechanism for Canadian engagement in circumpolar activities and assist in the success of the Northern Strategy. The Arctic Council is a large and complex forum. In some cases, bilateral relationships have proven to be more effective at advancing interests, especially when compared to the time and effort needed for multilateral discussions. Key informants re-enforced the notion that bi-lateral relationships often demonstrate faster delivery on projects and timely decisions on key issues.

INAC has formal relations with Norway, Russia, and the United States. In some cases, these relationships are established through Memoranda of Understanding, which identify areas of cooperation and serve to further Canada's Arctic interests. In the past, these interests have included efforts regarding search and rescue, fish and wildlife conservation, and environmental research.^{Footnote 23}

One example of a bilateral relationship is the 2007 Memoranda of Understanding on Indigenous and Northern Development between INAC and the Ministry of Regional Development of the Russian Federation. It was used to create a northern business partnership and foster a network of key stakeholders between the two countries. The Memorandum of Understanding supports the sharing of best practices on sustainable development and governance, and supports the Canada-Russia Intergovernmental Economic Commission. Canada and Russia have jointly agreed to provide support to the Arctic and North Working Group of the Intergovernmental Economic Commission which brings together Northerners from business and governments on a variety of issues such as; Arctic transportation, northern trade and tourism, corporate social responsibility, and Arctic resource development.^{Footnote 24}

A second example is the formal bilateral partnership between INAC and the United States Department of the Interior. This agreement was signed in 2010 to support collaboration on areas of mutual interest including policy, legislation, and socio-economic development. In addition, the Circumpolar Affairs Directorate has worked in support of the United States Department in developing and implementing the 2015 United States Canada Joint Statement on Climate, Energy, and Arctic Leadership, which supports combatting climate change and protecting and promoting the rights of Indigenous peoples in climate change decision making.^{Footnote 25}

However, not all of Canada's international relationships exist within the formal parameters of a Memorandum of Understanding. For example, the Canada-Norway Dialogue, which was established in 2006, facilitates a regular exchange across areas of common interest including policy, science, and climate change. This less formal arrangement has also proven fruitful for advancing the Arctic foreign policy agenda.

It is important to note that although bilateral relationships are very important in achieving progress on Canadian circumpolar priorities, they may be influenced by larger political considerations. Arctic Council progress was recently hampered by political events during the 2015 Russia-Ukraine crisis. These events weakened diplomatic ties between Canada and Russia, froze the bilateral relationship, and halted progress on the above-mentioned joint initiatives. The breakdown in communications occurred at the political level; at the working level, however, colleagues agreed to put the relationship on hold and not break off contact entirely. Progress resumed after the crisis abated, but a number of initiatives remained blocked for a period of time afterwards.^{Footnote 26}

The Circumpolar Affairs Directorate serves as the primary conduit for Indigenous and territorial engagement on the Sustainable Development Working Group. Through its contacts and its ongoing relationships with Indigenous partners (such as the Arctic Athabaskan Council, the Inuit Circumpolar Council, and the Gwich'in Council International), INAC works to encourage a broader understanding of Arctic issues. Both INAC and Global Affairs Canada provide funding for Indigenous partners to participate and be represented at Arctic Council fora.

Not all Arctic Member States support the inclusion of local or traditional knowledge as a decision making input to the same extent. This is where Canada, through INAC, demonstrates its most important collaborative value. The Iqaluit 2015 report states that one of the key accomplishments during Canada's chairmanship was to develop more consistent use of traditional and local knowledge with the expectation it would lead to better results on environment-related initiatives.^{Footnote 27}

Other than the Russian Association of Indigenous Peoples of the North, all the Permanent Participants include members with residency across multiple Arctic States. Canada has a leading voice in this regard as three of the six Permanent Participant groups (the Arctic Athabaskan Council, the Gwich'in Council International, and the Inuit Circumpolar Council) have representation in Canada. Canada promotes a strong focus on social and economic issues in the North as well as the use of a diverse perspective of "Traditional Knowledge".

Providing International Leadership

Among the areas where Canada provides international leadership is in its use of local or "traditional knowledge" in the work of the Arctic Council. The Sustainable Development Working Group made a series of recommendations, which were intended to help integrate local and traditional knowledge into Arctic Council initiatives. These include: the continued development of consensus-based guidelines for incorporating traditional and local knowledge in the work of the Arctic Council; including the use of consistent terminology; and, encouraging the adoption of traditional knowledge at the outset of a project including a proposal of how it may be used or explaining why it may not be applicable. In addition, a final report detailing any lessons learned as to how Traditional Knowledge may be better incorporated in the future; tracking the use of traditional and local knowledge in all projects and initiatives, and; recognizing and giving credit to traditional and local knowledge holders and community contributions to Arctic Council projects and reports, including co-authorship where appropriate.

Due to its focus on social and economic issues rather than the science-based focus of the other five working groups, the Sustainable Development Working Group is the Arctic Council's primary means to support Indigenous and community capacity building. The Circumpolar Affairs Directorate states that the Sustainable Development Working Group "drives the human dimension work of the Arctic Council" which is of particular interest to Indigenous partners whose livelihoods rely on a sustainable Arctic.^{Footnote 28}

In addition, Canada has consistently worked to raise the emphasis on human health issues in the North, creating projects such as the Arctic Indigenous Youth, Climate Change and Food Culture. In partnership with Denmark, Norway, Russia, the United States, and Indigenous Permanent Participants, this project has continued into the 2015-2017 chairmanship of the United States. With INAC's support, Canada also helped to create the Arctic Economic Council to promote trade and business development, and helped to reframe Arctic environmental issues as global issues.^{Footnote 29} Prior to the conclusion of Canada's chairmanship, Canada worked with the United States to ensure that Canadian priorities continue to be reflected by the Arctic Council. Canada's efforts at bringing attention to the human dimension were sustained when the United States launched the Rising Sun project, which focusses on reducing suicide in Arctic communities.

The evaluation finds that Canada was successful during its Arctic Council chairmanship by encouraging the expansion of the types of knowledge and data that inform Arctic Council thinking and decision-making. Canada was able to deliver on its stated objectives and priorities as outlined in the Iqaluit 2015: Results Achieved document.

Providing Technical Advice and Expertise

As mentioned, the Arctic Council consists of six working groups that focus on a variety of environmental initiatives. They include: the Sustainable Development Working Group; the Arctic Contaminants Action Program, which works to reduce, prevent, and ultimately eliminate pollution in the Arctic; the Arctic Monitoring and Assessment Programme, which aims to provide reliable and sufficient information on threats to the Arctic environment, as well as advice on actions to remediate and prevent northern contaminants; the Conservation of Arctic Flora and Fauna, which provides information on the management and utilization of Arctic species and habitats; the Emergency Prevention, Preparedness and Response working group, which addresses aspects of prevention, preparedness, and response to environmental emergencies in the Arctic, as well as search and rescue programs; and the Protection of the Arctic Marine Environment group, which deals with threats to Arctic marine life.^{Footnote 30}

In the Iqaluit 2015: Results Achieved document, Canada points to six accomplishments during its chairmanship of the Arctic Council which relate to the protection of the environment.^{Footnote 31} These achievements assist Arctic peoples and communities to adapt to a changing climate.

Canada's initiatives on environmental protection are a mix of science, regulations, and local knowledge. They include items such as: the framework for action on black carbon and methane emissions in the Arctic; the action plan to protect migratory birds along key flight paths; the incorporation of best practices for communities adapting to climate change; and regulatory cooperation on petroleum and shipping industries to prevent marine oil pollution.

An example where INAC provides advice and expertise is under the Northern Contaminants Program. This program was established in response to concerns about human exposure to elevated levels of contaminants in wildlife species that are important to the traditional diets of northern Indigenous peoples.^{Footnote 32} Research discovered a variety of substances, many of which had no Arctic or Canadian origins, reaching unexpectedly high levels in the Arctic ecosystem and directly impacting the population. This work fed into the Arctic Monitoring and Assessment Programme of the Arctic Council, which leveraged INAC's expertise and relationships to advance projects in response, including the Biological Effects of Contaminants project.

The scope of the Arctic Council's agenda has expanded in recent years and the working groups are in the process of adapting to these developments. Governance over Arctic issues within the Arctic Council is an ongoing challenge, which requires working groups to have clearly defined mandates. In the past, projects that did not specifically belong to one of the other subject areas fell under the supervision of the Sustainable Development Working Group because its mandate was not as precisely defined. During the 2013-2015 chairmanship, for example, the Sustainable Development Working Group took on the Reindeer Herding and Youth project, which seeks to maintain sustainable reindeer husbandry in the Arctic as well as creating a better life for reindeer herders. This project, although relating to Arctic species and habitats, was put under the direction of the Sustainable Development Working Group due to its ties to northern economic and social issues. The Circumpolar Affairs Directorate is working to better define the broad mandate of the Sustainable Development Working Group to allow for stronger alignment among its projects.

It is recommended that:

Transfer of Records and Records Management

The federal government originally planned for an April 1st, 2015, implementation date. However, this was moved forward to April 1st, 2014, which allowed for only eight months to complete implementation. In order to manage the accelerated timeline, Canada and the Government of Northwest Territories established the Joint Project Management Framework, which included a combination of working groups and oversight committees to track progress and manage deadlines.^{Footnote 33} Based on the framework illustrated in Figure 3 below, the Implementation Committee scheduled bi-weekly meetings with the working groups to assess progress and reaffirm goals right up until the April 1st, 2014, implementation date.

Evidence provided from secondary sources^{Footnote 34} along with responses from key informants indicates that the strategy for addressing the information management transfer was not comprehensively addressed by the Joint Project Management Team until shortly before the implementation date. Evidence further suggests that the amount of work required to execute the transfer was underestimated by all parties. INAC key informants emphasized the level of pressure put on staff by the April 2014 deadline. This sentiment was echoed in the Institute on Governance Lessons Learned report, which states that, "records staff were working anywhere between 10 and 14 hour days over a seven-day workweek".^{Footnote 35}

Text alternative for Figure 3: The Joint Project Management functional organization

Figure 3 shows the organizational structure of the Joint Project Management organization. The column on the left demonstrates that joint line decision-making (INAC, GNWT) is shared between the Principals, Accountable Parties, Line Working Groups, and Special Working Groups. The Principals (for joint oversight and decision-making) collaborate on decisions, issues, monitoring, and reporting with the Accountable Parties (for joint oversight and decision-making). The Accountable Parties are also responsible for sharing decisions and issues with the Line Working Groups (responsible parties) and share monitoring and reporting with the Special Working Groups (JLACT and Assigned Projects).

In the centre column, under Joint Facilitation and Support (INAC, GNWT), the Joint Project Management Team provides facilitation and support to the Line Working Groups and Special Working Groups illustrated in the left column. The Joint Project Management Team also delivers consolidation and reporting to Devolution Coordinators. The Devolution Coordinators in turn offer facilitation and support for the Accountable Parties in the left column, and brief the Principals and Implementation Committee.

Under the right-hand column, entitled Multi-Party Monitoring (Parties to the Devolution Final Agreement), is listed the Implementation Committee, which directly links back to the Principles in the far left column.

The compressed timeline along with the large amount of information to be accumulated and digitized made achieving a full and timely transfer a significant challenge. The Government of Northwest Territories had to account for files sent from multiple government departments along with a new federal information management system. In the end, the transfer was a success due to the commitment of all the parties involved. However, there was little room left for error.

The implementation was assisted by the addition of a third-party consultant. A senior official with experience in the Yukon Devolution process was able to point out potential areas that had been overlooked, and assisted in preparing the Government of Northwest Territories for receiving INAC records. The Northwest Territories was anxious to avoid repeating the anecdotes from Yukon's experience, such as a lack of communication with employees and a need for clarification regarding transferring policies and procedures. Most notably, several key informants made mention of trucks filled with federal records arriving unexpectedly at the Yukon territorial offices on the date of implementation.^{Footnote 37}

The experiences of both the Yukon and the Northwest Territories demonstrate the transfer of federal records is a much more extensive process than it appears to be from the outset. It is clear that both the Government of Northwest Territories and INAC would have benefited from starting the planning process sooner. Additionally, it would have facilitated the transfer had there been an existing inventory of what needed to be transferred prior to the implementation date.

The transfer of records and files included information from a number of other government departments who were at varying levels of preparedness. Environment Canada, the Department of National Defense, Fisheries and Oceans Canada, Natural Resources Canada, Parks Canada, Public Works and Government Services Canada, the Royal Canadian Mounted Police, Transport Canada, and other Crown corporations all had responsibilities in the Northwest Territories that were devolved to the Government of Northwest Territories on April 1st, 2014.^{Footnote 38}

The records transfer process also took more time than was expected because amendments to policy and guidance documents were not accurately considered prior to the implementation date. For example, agreements such as which department would maintain responsibility over registered contaminated sites^{Footnote 39} required review in order to reaffirm land ownership and the new role of the Government of Northwest Territories.^{Footnote 40}

The general lack of communication between the federal and territorial governments throughout the Devolution process was a point raised by various sources. With respect to records management, it hampered the transfer of records to the Government of Northwest Territories. Along with the INAC documents that had to be transferred (including program and services information, operational documents, employee files, etc.) original records also had to be obtained from Library and Archives Canada. Key informants noted a delay in INAC's transfer of these documents to the Government of Northwest Territories contributed to a "major scramble that came to a head in the last three months of implementation".^{Footnote 41} In order to avoid similar complications during Nunavut Devolution, it will be essential to have a strategy prepared for the transfer of records early in the Devolution process.

It is recommended that:

The Transfer of Human Resources

The Institute on Governance's Lessons Learned report^{Footnote 42} along with key informant responses on the subject of transferring human resources indicates there was a lack of preparation and communication by the federal government. This lack of preparation is illustrated by the high number of out-of-date job descriptions; as well as employee confusion concerning the transfer of pensions and benefits. In addition, there was anxiety among transferring employees that they would lose certain federal benefits such as Crown housing and/or the Northern Leave Travel Allowance. The responsibility for addressing employee concerns and for devising a communication strategy was shared between the INAC regional office in Yellowknife, the Northern Affairs Organization in Ottawa, and INAC's Human Resources Sector. The regional office had the lead, but did not adequately address those concerns.

A strategic approach to the transfer of employees in the implementation phase should have been set out at the beginning of the Devolution process, well before the implementation date. A longer implementation period, along with better communication, would also have helped to reduce uncertainty and stress and facilitate a more orderly staff transition.

Concerns raised by staff covered a range of issues such as: differences in pay and position, new job responsibilities, pensions and benefits, job security, job mobility, and union representation. Clear and early communication by the Department on these issues will be essential in the Nunavut Devolution process.

By contrast, the Government of Northwest Territories' communication with the transferring employees was seen as far more successful. Key informants indicated that significant efforts were made on the part of the Government of Northwest Territories to welcome federal employees. They established fluid communications including town halls, welcome events, and workshops to explain the differences between the federal and territorial organizational structure. The Government of Northwest Territories established an information outpost online and drafted a plain language text^{Footnote 43} communicating what the transfer would mean to employees. The Government of Northwest Territories made a concerted effort to present Devolution in a positive light. The welcoming atmosphere created by the Government of Northwest Territories may have contributed to a high acceptance rate among the federal employees who received offers of transfer.

A second major finding of the evaluation was that the federal plan for the identification of positions to be transferred was not sufficient for the task at hand. The selection of positions, along with the employees who occupied them, was primarily the responsibility of the INAC regional office in Yellowknife. The regional office was required to identify which regional employees would be transferred and which would remain to continue managing ongoing federal responsibilities in the Northwest Territories. After implementation, some of the remaining federal positions were no longer deemed essential. This indicates gaps in the identification of positions which either needed to be devolved or retained.

A complicating factor during the implementation phase was the enactment of the Deficit Reduction Action Plan. This created a considerably smaller workforce than was initially anticipated in the transfer calculations.^{Footnote 44} The consequences of Deficit Reduction Action Plan were to overburden the regional office and the newly created Human Resources "hub" offices at the exact time when the need for support was at its greatest. The regional office was suddenly understaffed while in the midst of rushing to complete the implementation process in the eight-month timeframe.

It should be noted that the Government of Northwest Territories negotiated their Devolution agreement during a period of high economic success in the resources sector. The employees that transferred from the federal office were brought over to provide services in the context of a strong resource sector, which generated high revenues for government. While this demonstrates a level of success for the territorial government at the time, the question remains of what will happen to transferring employees if, or when, the resources sector enters a period of decline. Key informants stated that transferred former federal employees are concerned about job security should the Government of Northwest Territories need to undertake workforce adjustment. A clause in the Devolution Agreement^{Footnote 45} states that transferred employees will have a two-year minimum employment guarantee. After this period, however, these positions are subject to government revenue streams (and market fluctuations) as with any other territorial employee. The concern is that their short tenure puts them at greater risk.

The events in the Northwest Territories indicate that the transfer strategy itself, along with the communications plan, was not sufficiently comprehensive nor was it initiated early enough prior to the Devolution implementation date. While the specifics of which positions and employees would be transferred were not known until the Final Agreement was resolved, a great deal of the pre-planning for the transfer could have been accomplished in advance. In the case of Nunavut, a longer implementation period would assist in organizing the transfer and preparing the affected employees.

It is recommended that:

Lands and Resource Management

At the outset of Devolution discussions in the Northwest Territories, both levels of government were in agreement with the high-level concept of Devolution as a "nation-building" exercise. It was uniformly seen as an end to the colonial era in the territory. However, as the process moved forward, this concept began to break down. Federal and territorial sources describe the Government of Northwest Territories negotiations as strained and acrimonious.

Evidence provided by territorial and federal key informants was not in agreement. A number of territorial key informants indicated that the Government of Northwest Territories may have agreed to certain terms or conditions in the Final Agreement in order to allow Devolution to proceed. They suggested that the Government of Northwest Territories may have accepted an agreement that did not fully meet their expectations in the interest of concluding the negotiation process, (such as the allocation of certain contaminated sites and transfer of the Mackenzie Valley Resource Management Act). These issues, as well as the management of oil and gas resources in the Beaufort Sea (and other northern offshore areas), have left parts of the Devolution process outstanding.^{Footnote 46}

Key informants within INAC suggested that it was the Government of Canada who pushed for an expedited resolution and implementation. As mentioned, this added pressure to discussions and led to rushed conclusions on certain chapters. However, it was thought that without this approach the discussion phase would take too long. In the end, the federal government would not be able to alter its offer in any substantial way. Federal key informants also indicated that tensions may have increased when the Government of Northwest Territories elevated issues to the political level as pressure rose at the negotiating table.

Despite these differences, evidence shows that the Government of Northwest Territories and INAC entered Devolution not just with different goals and tactics, but also with different approaches. A result of the acrimonious negotiations was to create time pressures on the implementation process and leave certain important elements of the transfer off the table.

Looking forward to the Agreement-in-Principle phase in Nunavut, the transfer would be facilitated by having a collaborative approach that would assist in creating an apolitical atmosphere of partnership as an initial step.

It is recommended that:

Outstanding Authorities

As the Lessons Learned report notes^{Footnote 47}, the Government of Northwest Territories negotiation over the Mackenzie Valley Resource Management Act was "the most challenging issue to align due ultimately to a lack of trust between parties." The Act establishes public boards to regulate all uses of land and water while considering the economic, social, and cultural well-being of residents and communities in the Mackenzie Valley.^{Footnote 48} Subsequent to the transfer date in April 2014, administrative responsibilities for the Act were delegated to the Government of Northwest Territories while managerial responsibilities, including board appointments and policy direction, remained with INAC. This division of responsibilities continues to be a contentious issue in the Government of Northwest Territories.

This raises a major point of concern for the Government of Northwest Territories. Key informants from the Territory stated that having their representatives appointed by the federal government, as per the Act, does not allow them to have full authority over how they are represented on these boards. The Government of Northwest Territories believes that this undermines their self-determination and independence. The issue of appointment also applies to Indigenous communities with modern treaty agreements. Full Devolution of The Mackenzie Valley Resource Management Act will be reviewed along with the above-mentioned issues five years after the implementation date of April 1st, 2014. Both parties are hopeful that outstanding issues can be resolved and that the final transfer of responsibilities will be affected.

There is also a point of concern for Indigenous groups. After the transfer date, the Government of Northwest Territories became the primary partner for Indigenous groups with modern treaty agreements. The Government of Northwest Territories now has administrative responsibility for any contaminated sites created after the transfer date on settled lands.^{Footnote 49} Indigenous groups without modern treaty agreements are still under the auspices of the federal Indian Act and responsibility for resource administration and contaminated sites is federal jurisdiction.

It is important to note a distinction between Indigenous groups with modern treaties and those without because the relationship they have with the territorial government is substantially different. Several key informants mentioned that some Indigenous groups are concerned about how the relationship between Indigenous peoples and the territorial government will evolve now that the territory is responsible for the delivery of certain programs and services. They note that the Government of Northwest Territories will need to work with Indigenous partners to foster a new relationship and that it will be incumbent upon both parties to be constructive and positive. Interacting with a newly devolved territorial government will present different challenges for Indigenous groups. They look to the precedent set in the Yukon where the relationship between Indigenous groups and the territorial government is still being defined post-Devolution.^{Footnote 50}

In moving forward in the Northwest Territories, it will be important to build the relationship between Indigenous groups and the territorial government. Both parties share responsibility for the administration of Indigenous rights. As the Yukon demonstrates, implementing new programs and services is an incremental process. It will take time to reach a sustainable level of service. In the meantime, developing the parameters for a new relationship is an undertaking that can be planned and managed prior to Implementation.

The situation in Nunavut is quite different. Nunavut does not have the number of Indigenous groups as are in the Northwest Territories. Instead, there is a large and well-represented Indigenous organization, the Nunavut Tunngavik Incorporated, who administer significant portions of the terrestrial resources and who have influence on the public government under the Nunavut Inuit Land Claim Agreement.^{Footnote 51} Consideration must be given towards the role the Nunavut Tunngavik Incorporated will play in the Devolution process and how they will be integrated into the final agreement.

Contaminated Sites negotiations were complicated by the need to determine how to handle pre-existing environmental liabilities on lands that were intended to be transferred. They were also complicated by differing risk tolerances between the parties and the limited availability of information about some of the contaminated sites. The federal method of categorizing contaminated sites follows a risk-based structure, depending on the level of risk the site poses to public health. The territorial perspective, however, is binary, documenting a site as either contaminated or not.

Moreover, many contaminated sites had not been surveyed and there was a lack of information available on the location and extent of them in the Northwest Territories. It was therefore difficult to determine the cost to remediate sites that had not yet been surveyed. As an example, the federal government would have applied a risk-based analysis to the discovery of an abandoned and empty oil drum in an open field. If it determined that it was not causing contamination, it may decide it was not cost effective to retrieve it. The Government of Northwest Territories appears to have no similar mechanism to make this determination and would therefore classify the site as contaminated.

One objective for Canada during negotiations was to avoid duplicating the contaminated sites chapter of the Yukon Devolution Agreement.^{Footnote 52} This chapter allowed the territorial government to determine the cost of remediating a contaminated site even though Canada retained the liability and responsibility to pay. The parties settled on a proposal for Canada to retain both the responsibility and the decision making for contaminated sites that existed prior to the transfer date.

A separate concept was proposed and accepted which addressed all low-risk, unclassified sites that may be identified in the future. These sites were transferred to the territorial government along with a fund of $2 million per year, although this was not specifically noted in the Final Agreement as being for waste sites. In the end, the total monetary package increased from $65.3 million in the Agreement-in-Principle to $67.3 million in the Final Agreement.^{Footnote 53}

As a result of this deal, there are territorially managed sites within close proximity of federally managed contaminated sites, creating pockets of residual lands within devolved territory. Territorial key informants stated that this creates a sense of confusion in trying to determine which sites are managed by which government. In addition, it leaves unresolved any potentially undiscovered contaminated sites that will have to be transferred back to federal jurisdiction in order to fund remediation according to the Agreement. In the Nunavut Devolution process, similar confusion may be avoided by mapping the territory's contaminated sites before the negotiation process begins.

As discussed in the Mayer Report, Nunavut considers the subject of negotiating off-shore resources within its boundaries as "essential" to Devolution. The report describes that the inclusion of rights to seabed resources is a matter of national interest, cultural significance to Inuit people, regulatory efficiency, and consistency with the Nunavut Inuit Land Claim Agreement and Canadian law.^{Footnote 54} In a practical sense, the revenue from these resources is critical to the territorial government.

Potential revenue streams generated by the natural resource sector in Nunavut are quite different from the Northwest Territories. A large portion of Nunavut's natural resources are under the administration of the Nunavut Tunngavik Incorporated. While this corporation works in partnership with the Government of Nunavut, they are a separate entity, responsible for coordinating and managing Inuit responsibilities set out in the Nunavut Inuit Land Claim Agreement.^{Footnote 55} However, this leaves diminished potential resource revenue streams for the public government in Nunavut.

The administrative transfer of offshore oil and gas resources are currently omitted from Devolution negotiations. The federal government is not able to transfer any powers (such as marine rights), which go beyond what provinces currently benefit. As a result, the Government of Nunavut faces the potential management of new programs and services without the administration of resource revenue streams that are present in Canada's other devolved territories.

Key informants stressed their concerns over Nunavut's general lack of resource revenue. It was expressed that Nunavut must be a principal beneficiary of any royalties generated by offshore resources after Devolution as it will be a key factor in ensuring Nunavut's financial sustainability.

Capacity and Priority of the Circumpolar Affairs Directorate

The evaluation found that a secure and ongoing source of funding is an annual issue for the Circumpolar Affairs Directorate. There is a yearly scramble to support the Canadian-based Permanent Participants and to fund the Department's range of circumpolar activities. The Circumpolar Affairs Directorate often obtains its funding from other programs and services in the Northern Affairs Organization that may have surpluses. This obviously creates problems from a planning perspective, but more importantly, it detracts from INAC's circumpolar participation and diminishes the priority of directorate initiatives within the Northern Affairs Organization.

A financial analysis shows that approximately 39 percent of the program area's actual expenditures are additional funds secured through an Internal Reallocation Request.^{Footnote 56} This percentage of spending requests may indicate that more effective planning needs to be conducted at the beginning of the fiscal year in order to facilitate a more predictable allocation of funding and support.

The issue of program resources creates a domino-effect for the Canadian-based Permanent Participants. They have a difficult time maintaining their full partnership responsibilities either due to a lack of support and expertise or because of unknown funding levels. In addition, funding (which is allocated for engagement in specific Sustainable Development Working Group projects) is not always distributed equally among the three Permanent Participants headquartered in Canada. This allows some Permanent Participants to participate more fully than others. The point, however, was made during key informant interviews that because of the size and constituency of each of the Indigenous groups, it is, in fact, the larger groups (who receive greater funding) who may face a disadvantage in properly representing their membership at the required levels.

The evaluation found that although the Circumpolar Affairs Directorate has a complex workload, it is delivering with limited capacity. The Directorate functions with a team of four staff members, while at the same time facing a growing assignment of bilateral and policy coordination activities.^{Footnote 57} It is a problem for the directorate and for INAC's participation in the Arctic Council that deserves further consideration from the Northern Affairs Organization.

It is recommended that:

Sustaining Nunavut's Capacity to Deliver on Programs and Services

There are a number of additional issues in Nunavut, which will impact the Devolution process, and which were not present or not relevant to Devolution in the Yukon or the Northwest Territories. These differences are expected to make the transfer of authorities in Nunavut more difficult and perhaps riskier. Primarily, Nunavut has a much smaller population, with communities that are remote and isolated from each other. It also does not have the same level of capital infrastructure or government infrastructure to deliver its existing programs and services. Perhaps most importantly, Nunavut has a lower retention rate among skilled and technical employees in the public sector.^{Footnote 58} Both the Government of Nunavut and the INAC regional office are currently challenged in their delivery of programs and services given the respective staff issues.

Without a proper capacity building strategy, service delivery issues will be exacerbated after Devolution. As of June 2016, there were 30 vacant positions out of 116 in the INAC regional office.^{Footnote 59} Under the current capacity levels, programs and service delivery is a challenge. In addition to capacity concerns, the INAC regional office retains employees on average for only 18 months.^{Footnote 60} This creates a lack of corporate memory and a high need for training services. With such a short retention period, constantly training new employees is a drain on time and already stretched resources.

A further challenge to the upcoming Devolution process in Nunavut is that many employees transferring from INAC to the Government of Northwest Territories already resided in the Northwest Territories, whereas most of Nunavut's programs and services are delivered from INAC's head office in Gatineau. Given that a large number of INAC's service delivery centers in Nunavut are in remote locations and often lack in infrastructure and amenities (for example, Iqaluit has a shortage of housing), it may be more difficult to encourage INAC staff from headquarters to transfer to the Territorial government.

An additional consideration for Nunavut is that the public government must abide by requirements set out in the Nunavut Inuit Land Claim Agreement. According to Article 23 of the Agreement (citation Government of Nunavut website), 85 percent of employees must be Inuit. Given that 40 percent of Nunavut's population is under the age of 16 and that communities are spread out across the territory, the newly devolved government could face difficulties in acquiring qualified candidates to fill its capacity needs. Capacity will take time to build and the requirements in the Agreement may take time to fulfill.

The final point draws on lessons from the Northwest Territories Devolution process. INAC's management of Devolution overburdens certain employees who must balance those demands alongside their regular responsibilities, especially in the regional office. The regional offices have limited capacity to manage both the responsibilities of organizing a Devolution process as well as the daily responsibilities of ongoing programs and services. It would be to the Department's benefit to ensure sufficient capacity in the regional office while managing the Devolution process in Nunavut.

It is recommended that:

Relevance

INAC's involvement with the Arctic Council has been critical in bringing together federal departments, territorial governments, and Indigenous groups in the interest of building and maintaining a strong and vibrant North. As key informants indicated, Arctic issues are global issues; a point supported by the collaboration of international working groups, the carry-over of environmental issues between chairmanships, and the keen interest of Observer nations and Permanent Participants on the Arctic Council.

INAC's role was positively demonstrated to be both appropriate and in alignment with stated government priorities in the Northern Strategy. The Circumpolar Affairs Directorate brings expertise and presence to INAC's relationships on the Arctic Council. This puts the Circumpolar Affairs Directorate in a critical position within INAC for advancing Canada's northern agenda.

Performance

INAC has successfully nurtured bi-lateral relationships with the United States, Russia, and Norway and has seen more progress stemming from those relationships than at the full member state meetings of the Arctic Council. Canada's work with the Indigenous Permanent Participants and territorial governments has also contributed to the inclusion and influence of Traditional Knowledge in working group projects, and has subsequently encouraged the Arctic Council to focus on social issues in the North as well as environmental and economic issues.

Relevance

The Devolution of lands and resource management to the territories is a stated objective in numerous government documents, such as Northern Affairs Organization Next Strategic Plan, the 2013 Throne Speech, and the Northern Strategy. Devolution creates a stronger sense of territorial leadership, where decisions regarding programs and services are made locally. The Devolution and Territorial Relations directorates of the Northern Affairs Organization work to ensure that territorial governments have greater control over their economic and political affairs by strengthening northern communities. The continued need and relevance for INAC programs, which support Devolution is positively demonstrated.

Performance

The experience in the Northwest Territories provides a number of lessons for the Devolution process in Nunavut. While some parts of Devolution were a success, other areas required more planning prior to the implementation stage. Different perspectives between the Government of Northwest Territories and Canada during the negotiation phase created delays and lack of agreement between the two parties, and led to postponing the transfer of some authorities (such as the Mackenzie Valley Resource Management Act).

Most of the key components of Devolution in the Northwest Territories required more strategic planning and earlier attention including; records management, the transfer of human resources, and the strategy for the transfer of lands and resources, including contaminated sites. Given the lower infrastructure and human resource capacity issues in Nunavut, the design, strategic approach, and implementation plan for these key aspects must be planned thoroughly and in advance.