Why did the Canadian government establish a territorial administration in the 1920s?

The Canadian government established a formal territorial administration for the Northwest Territories in the 1920s primarily due to the discovery of oil near Fort Norman on the Mackenzie River.1

Prior to this development, the region was managed by fur traders, missionaries, and the Royal Canadian Mounted Police, who were responsible for maintaining law and order and providing necessary governmental services. The discovery of oil shifted the government's focus toward the region's resource potential, necessitating a more structured administrative framework to oversee the area.1