The main sources of employment are government service and mining and the traditional skills of hunting, fishing and trapping. Territorial governments have responsibilities similar to provincial governments, including taxation, education, health, housing and social services. In the territories, however, the principal source of revenue is the federal government's Territorial Formula Financing. For 1997-98, this block fund accounts for 75 percent of revenues for the Northwest Territories and over 65 percent of revenues for Yukon. Because of the nature of their relationship with Ottawa, the territories receive no revenues from the exploitation of their natural resources.
All resource royalties go to the federal government.
The federal Department of Indian Affairs and Northern Development is responsible for Indian and Inuit affairs across Canada and for residents of the two territories. The initiative is similar to the Canada Health and Social Transfer in that the shift of responsibility for welfare means more flexibility, but less money. Both territories have been devolving welfare and other programs to communities, with a minimum of territory-wide standards. Northwest Territories Welfare programs in the Northwest Territories have come under pressure in recent years - partly because of increases in the demand for assistance and partly because of plans to divide the territory to create the new territory of Nunavut in 1999. Studies by the Northwest Territories in the early 1990s revealed some sobering facts.