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Mining and Aboriginal Rights in Yukon

Legal uncertainty is a topic often raised in discussing unresolved Aboriginal land claims, such as those in British Columbia. Mining and Aboriginal Rights in Yukon examines legal uncertainty on Aboriginal rights in a different way, and in an under-examined Northern context. We examine what we identify as growing legal uncertainty in Yukon. This topic is not one that would have been expected a few years ago. In Yukon, modern land claims agreements with 11 out of the territory’s 14 First Nations once seemed to have established a high degree of certainty on Aboriginal claims. This certainty was even seen as a significant advantage for Yukon in the global competition for mining investment.

However, changing perceptions in the mining industry now suggest that this advantage has been undermined in recent years. The phenomenon of growing legal uncertainty in Yukon may also have implications for the whole country. It may be that modern land claims agreements—long seen as the best tool for establishing certainty on outstanding Aboriginal claims—are not living up to their promise in the current legal environment.

Analysis of data from the Fraser Institute’s annual Survey of Mining Companies shows that there has been a measurable shift in the mining industry’s perceptions of legal certainty on Aboriginal land claims in Yukon since 2012. In order to identify if changes have occurred that affect Yukon specifically, we also drew on comparative data from a jurisdiction without pertinent legal shifts during the same time period and a jurisdiction with the same shifts on general Aboriginal title issues. These data support the claim that something unique happened in the Yukon legal environment. Drawing on both the quantitative data and qualitative discussion of legal uncertainty in Hansard and the media, we find that the shift in perceptions was both very recent, dating from the years after 2012, and quite significant.

Several key legal changes related to the duty to consult and modern treaties can be correlated with this shift, and we suggest that these developments can explain a significant change in investors’ perceptions. In particular, court decisions in two areas seem to have been especially important in changing perceptions of legal certainty. First, courts have shown a willingness to go beyond the terms of highly detailed modern treaties to impose additional, unforeseen obligations on governments. Second, courts have extended obligations to consult Aboriginal groups to new types of government decision-making, in one case effectively discarding the legislative framework governing mining in Yukon. Investors appear to have taken notice of these recent legal trends. This, we argue, explains the dramatic shift in investors’ perceptions of legal certainty in Yukon in recent years.

Why does legal certainty matter for resource sector investment? How do the details of decisions in Aboriginal rights cases affect legal certainty? In answering these questions, we arrive at a framework that distinguishes necessary forms of legal uncertainty—which may have to be tolerated in order to protect certain Aboriginal interests—and unnecessary uncertainty, which is not required in order to protect such Aboriginal interests. A number of trends in recent cases seem to have led to elevated levels of unnecessary legal uncertainty.

We conclude with the following recommendations, which are addressed primarily to courts deciding Aboriginal rights cases, especially the Supreme Court of Canada. Courts can enhance legal certainty by:

  • seeking to minimize recourse to terms outside modern land claims agreements, which are detailed documents intended to govern the relationship between Aboriginal groups and governments in a comprehensive manner;
  • continuing to develop the doctrine of the duty to consult in an incremental manner that both defers to existing precedent and provides greater clarity of purpose;
  • encouraging the resolution of underlying, substantive Aboriginal rights claims, both by adhering to the expressed intent of the parties to modern agreements and by providing streamlined processes for resolving Aboriginal claims;
  • seeking to develop Aboriginal case law in an incremental manner, and avoiding the dramatic shifts in the jurisprudence that have characterized the past three decades.
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LNG Exports from British Columbia: The Cost of Regulatory Delay

British Columbia’s natural gas resources are substantial and the international market for liquefied natural gas is growing, particularly in the Asia-Pacific region. British Columbia is well placed to serve that market: under conservative assumptions, BC’s export capacity could be 42% to 74% of Asia-Pacific imports of LNG in 2020. Benjamin Zycher and Kenneth P. Green demonstrate in LNG Exports From British Columbia: The Cost of Regulatory Delay that, while strong environmental and other protections are necessary, regulatory and other delays are hindering the ability of British Columbia to compete for those sales. The International Energy Agency notes, for example, that, because of these delays, “no Canadian LNG project will start production” by 2020, even as 17 international projects were under construction as of May 2015, with target on-line dates between 2015 and 2019.

Under the conservative assumption that actual sales of BC LNG to Asia-Pacific importers would be only 11% to 20% of that market in 2020, the annual export revenues lost due to delay would be equal to between 2% and 9.5% of BC’s GDP in 2014. This cost is substantial: CA$22.5 billion in 2020, rising to CA$24.8 billion in 2025. The magnitude of these lost export revenues should encourage policy makers to streamline the regulatory process so that British Columbia is able to make use of its large natural gas resources.

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The Fraser Institute’s annual report, Economic Freedom of the World, measures the economic freedom (levels of personal choice, ability to enter markets, security of privately owned property, rule of law, etc.) by analyzing the policies and institutions of 157 countries and territories. It is the world’s premier measurement of economic freedom, using 42 distinct variables to create an index, ranking countries based on economic freedom, which is measured in five areas: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labour and business.

According to the report, based on 2013 statistics (the most recent year of available data), the top 10 most economically free jurisdictions are Hong Kong, Singapore, New Zealand, Switzerland, United Arab Emirates, Mauritius, Jordan, Ireland, Canada, with the United Kingdom and Chile tied for 10th. The United States, once considered a bastion of economic freedom, now ranks 16th in the world after being as high as second in 2000.

The 10 lowest-ranked countries are Angola, Central African Republic, Zimbabwe, Algeria, Argentina, Syria, Chad, Libya, Republic of Congo, and Venezuela. Some despotic countries such as North Korea and Cuba can’t be ranked due to lack of data.

Globally, the average economic freedom score rose slightly to 6.86 out of 10 from 6.84 last year.

The report also includes a chapter examining the link between a country’s level of economic freedom and its citizens’ life satisfaction, or happiness. The chapter, Economic Freedom, Individual Perceptions of Life Control and Life Satisfaction, finds that living in an economically free country plays a greater role in one’s life satisfaction than does income, age, employment or even a country’s political system.

**Minor recalculations of the index after printing of the report have moved Chile to 10th place (tied with UK) from 13th place and Zimbabwe to 149th from 150th in the index. The corrected scores and ranks are available in the data set.

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Understanding the Increases in Education Spending in Public Schools in Canada

Education spending on public schools in Canada increased by $19.1 billion (45.9%) between 2003/04 and 2012/13, from $41.6 billion to $60.7 billion. Compensation (salaries and wages, benefits, and pensions) accounted for the overwhelming majority of this increase, growing from $30.9 billion in 2003/04 to $44.6 billion in 2012/13, an increase of 44.6%—fully 72.2% of the total increase in education spending. Salaries and wages increased by 42.0%, from $25.5 billion in 2003/04 to $36.3 billion in 2012/13. Benefits increased by 36.2%, from $3.2 billion to $4.4 billion. Salaries and wages as well as benefits declined as a share of total education spending over this time period.

Teacher pension costs increased 89.0%, from $2.1 billion in 2003/04 to $4.0 billion in 2012/13. Pension costs increased as a share of total spending in public schools, from 5.1 to 6.6%. Ontario, Saskatchewan, and Alberta account for over three-quarters of the total increase in pension spending.

Capital spending almost doubled (a 97.6% increase) over this period, from $2.4 billion in 2003/04 to $4.8 billion in 2012/13. As a share of total education spending in public schools, capital spending increased from 5.8 to 7.9% in 2012/13.

Three provinces—Ontario, Quebec, and British Columbia—represent 92.0% of the total increase in capital spending. “Other” spending recorded the smallest increase of any category of spending in public schools over this period. As a share of total education spending it declined from 20.0% in 2003/04 to 18.6% in 2012/13.

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Enrolments and Education Spending in Public Schools in Canada

To accurately understand education spending, enrolment changes must be included. For Canada as a whole, the increase in per-student spending in public schools after accounting for the effects of price changes was 30.8% between 2003-04 and 2012-13; from $9,231 to $12,070.

Saskatchewan saw the largest increase in per-student spending in public schools after adjusting for price changes. It experienced a 43.8% increase from $9,929 in 2003-04 to $14,282 in 2012-13. Neighbouring Manitoba recorded the smallest increase (14.9%).

In aggregate, Canada increased education spending in public schools by $13.8 billion from 2003-04 to 2012-13 more than was necessary to account for enrolment and price changes. If per student spending in public schools had remained constant over this period, the aggregate amount of education spending in public schools in 2012-13 would have been 22.8% lower. Such increases in spending need to be considered in the context of the overall finances of each of the provinces. For example, four provinces (British Columbia, Quebec, Nova Scotia, and Newfoundland and Labrador) would have moved from a deficit position to a surplus in 2012-13 had spending on education in public schools been held constant for the 2003-04 to 2012-13 period (adjusting only for price and enrolment changes).

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Improving Union Accountability with Worker Choice

As one of its last pieces of legislation before closing for the summer, Parliament passed Bill C-377, which aim to increase the financial transparency of labour organizations. This is a welcome move. Previous research by the Fraser Institute has shown that Canada traditionally lacked the strong union financial disclosure requirements to ensure financial transparency. The new law will ease the process for both unionized workers who pay union dues and the general public who wish to find out how union contributions are being spent.

It is important for a labour union to be accountable and responsive to the demands of members and dues-paying workers because the primary purpose of a union is to represent the interests of unionized workers. Specifically, unions represent workers in negotiations with employers (within the confines of collective bargaining) and in disputes between a worker and an employer. The recent changes aimed at increasing union financial transparency represent an important step in improving union accountability. The next step for greater accountability is to ensure that workers have a choice about whether or not to become a union member at all, and in paying union dues more broadly.

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The Canadian Consumer Tax Index tracks the total tax bill of the average Canadian family from 1961 to 2014. Including all types of taxes, that bill has increased by 1,886% since 1961.

Taxes have grown much more rapidly than any other single expenditure for the average Canadian family: expenditures on shelter increased by 1,366%, clothing by 819%, and food by 561% from 1961 to 2014.

The 1,886% increase in the tax bill has also greatly outpaced the increase in the Consumer Price Index (697%), which measures the average price that consumers pay for food, shelter, clothing, transportation, health and personal care, education, and other items.

The average Canadian family now spends more of its income on taxes (42.1%) than it does on basic necessities such as food, shelter, and clothing combined (36.6%). By comparison, 33.5% of the average family’s income went to pay taxes in 1961 while 56.5% went to basic necessities.

In 2014, the average Canadian family earned an income of $79,010 and paid total taxes equaling $33,272 (42.1%). In 1961, the average family had an income of $5,000 and paid a total tax bill of $1,675 (33.5%).

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Residential Land-Use Regulation in Alberta’s Calgary-Edmonton Corridor

As an increasing number of Canadians move to major cities, housing prices have continued to rise. Understanding how public policy affects the supply of new homes is critical. The Fraser Institute’s survey of housing developers and homebuilders assesses how residential land-use regulation affects the supply of new housing in Alberta. New Homes and Red Tape: Residential Land-Use Regulation in Alberta’s Calgary-Edmonton Corridor is the second in a series of publications tallying the data to represent industry professionals’ experiences and opinions of how residential development is regulated in cities across Canada. This report, which follows several major studies in the United States on this topic, presents survey results for cities in Alberta’s Calgary-Edmonton Corridor (CEC).

We found quite disparate estimates of typical project-approval timelines in CEC cities: estimates range from 6.1 months in Strathmore and 7.3 months in Red Deer to 13.2 months in Chestermere and 15.1 months in Rocky View County.

Typical approval timelines in Calgary and Edmonton, the CEC’s two largest cities, are tied at 13.1 months, although Calgary’s are the region’s most uncertain. Calgary’s average reported impact of timeline uncertainty is rivaled only by Rocky View County. In Edmonton, our survey suggests the impact of timeline uncertainty is in the middle of the pack, while results for Strathmore and Cochrane on this measure are particularly encouraging.

Reported compliance costs and fees add up to a low of $12,600 per home built in Strathmore and a high of $33,333 per home in Rocky View County. Calgary and Edmonton rank closer to the regional average: reported compliance costs for Calgary are $24,429 per new home; for Edmonton, $22,813.

The survey reports that properties need to be rezoned to accommodate more than 50% of new residential development in all but one city (High River). Estimates of rezoning’s effect on approval timelines range from under a month in Red Deer to 14.7 months in Rocky View County.

Opposition from the Council and community to residential development is perceived as strongest in cities where dwelling values are highest, raising questions about the causes and consequences of local resistance to new housing. The strongest opposition is reported in Rocky View County. In Calgary, where our survey suggests the next strongest impact of opposition is found, detached homes tend to be reported as more affected by controversy than new multiple-dwelling development. Council and community are typically not perceived as a deterrent to building in Strathmore, Cochrane, and Edmonton.

The publication provides a summary index of residential land-use regulation that is calculated by tallying across five key components of regulation’s impact—Approval Timelines, Cost and Fees, Council and Community, Timeline Uncertainty, and Rezoning Prevalence—in the nine cities that generated sufficient survey responses. This index ranks Strathmore as the least regulated and Rocky View County as the most. Calgary comes in below average in all categories except for the frequency of rezoning and is the second most-regulated city ranked overall, while Edmonton ranks closer to the regional average.

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Price of Public Health Care Insurance

Canadians often misunderstand the true cost of our public health care system. This occurs partly because Canadians do not incur direct expenses for their use of health care, and partly because Canadians cannot readily determine the value of their contribution to public health care insurance.

In 2015, the estimated average payment for public health care insurance ranges from $3,789 to $12,055 for six common Canadian family types, depending on the type of family.

For the average Canadian family, between 2005 and 2015, the cost of public health care insurance increased 1.6 times faster than average income, 1.3 times as fast as the cost of shelter, and 2.7 times as fast as food.

The 10% of Canadian families with the lowest incomes will pay an average of about $477 for public health care insurance in 2015. The 10% of Canadian families who earn an average income of $59,666 will pay an average of $5,684 for public health care insurance and the families among the top 10% of income earners in Canada will pay $37,180.

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Human Freedom Index

The Human Freedom Index presents a broad measure of human freedom around the world through the use of 76 indicators of personal, civil and economic freedoms to rank 152 countries around the world. It is the most comprehensive freedom index so far created for a globally meaningful set of countries. The index ranks countries beginning in 2008, the earliest year for which a robust enough index could be produced. This preliminary report will be updated (using data for 2013) and subsequently presented and updated on a yearly basis.

The index captures the degree to which people are free to enjoy the major freedoms often referred to as civil liberties—freedom of speech, religion, and association and assembly —in the countries in the survey. In addition, it includes indicators on rule of law, crime and violence, freedom of movement, and legal discrimination against same-sex relationships. It also includes five variables pertaining to women’s freedom that are found in various categories of the index.

On a scale of 0 to 10, where 10 represents more freedom, the nonweighted average rating for 152 countries in 2012 was 6.96. The level of global freedom stayed about the same compared to 2008, but almost all countries experienced changes in their ratings, with about half of those increasing their ratings and half decreasing.

A central purpose of this report is to get a general but reasonably accurate picture of the extent of overall freedom in the world. A larger purpose is to more carefully explore what we mean by freedom and to better understand its relationship to any number of other social and economic phenomena. This research could also help us more objectively observe the ways in which various freedoms—be they economic or civil, for example—interact with one another.

It reflects a multi-year program of research and discussions held in Europe and North America, involving scholars from many disciplines and countries. It uses, adapts, and evolves the methodologies that emerged from the decades-long work of the Fraser Institute to define and measure economic freedom with the Economic Freedom of the World index. The economic freedom project has demonstrated the power of such measurement to increase understanding about the concept of freedom and its contribution to human well-being.

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