The Case for Investing in Northern Infrastructure

It’s September, it’s Canada, and that means winter is coming. And in Canada’s North, that means winter road season. The Northwest Territories (NWT), with an area of 1.3 million square km, has only 2,200 km of all-season highways, augmented by 1,435 km of public winter roads. Only 19 of 33 communities have year-round road access, and four communities have no road access at all. Lack of road access contributes to community isolation and high cost of living and renders much of the territory’s vast resources uneconomic. Research published by the School of Public Policy (Kent and Tombe) argues that improvements in northern transportation infrastructure could increase the combined annual GDP of the three northern territories by between $4.5 and $6 billion, an increase of approximately 50 per cent.

The North has long been underserved when it comes to infrastructure, whether for transportation, communications or energy. Understandably, a small and dispersed population, vast distances, a harsh climate and the high cost of construction and maintenance all have contributed to the dearth of investment over the years. Northerners responded with innovative solutions though – using the ice and snow to reach both communities and resources.

However, climate change is making the lack of all-season roads an even more pressing issue. Gone are the days when communities and resource companies could count on sufficiently long and cold winters to build and maintain winter roads and ice bridges. Climate change also means that Canada’s Arctic, up to now remote and of limited interest to other countries, is becoming more accessible. Canada’s lack of access to its own northern territories may threaten its sovereignty. Addressing these issues will require billions of dollars in investment, from both government and the private sector. And it will require innovative ideas for financing this investment.

Fortunately, this issue is starting to get the attention it deserves. The School of Public Policy, through its Canadian Northern Corridor Research Program, has undertaken or is planning substantial work on the numerous policy issues that this northern infrastructure model would raise.  This would include research on funding models that might be adaptable for large projects in the Canadian context.

On September 10 the federal government released Canada’s Arctic and Northern Policy Framework.  This major policy statement, released the day before the election call, sets out as one of its goals the strengthening of northern infrastructure in order to close gaps with other regions of Canada.  The document recognizes that climate change threatens the resilience of existing transportation infrastructure and creates challenges for building new infrastructure.  The objectives set by the Framework include the development of multi-purpose corridors for broadband, energy and transportation.

In August, two announcements came out of the NWT which provided welcome news, but at the same time highlighted the North’s tremendous unmet potential.

On August 24 the groundbreaking ceremony for the construction of the Tłı̨chǫ All-Season Road (TASR) took place, attended by representatives of the Government of the NWT and the Tłı̨chǫ. The road will be a new 97 km two lane gravel highway to the community of Whati and will replace the southern section of the annual winter road, which has been a critical re-supply link to communities and resource development activities. The TASR project is being pursued as a public-private partnership (P3) with a total contract value of $411.8 million over 28 years. The Tłı̨chǫ Investment Corporation, as an equity partner in North Star Infrastructure, will participate in the construction and operation of the road.

On August 14 the federal and territorial governments announced $40 million in funding to support environmental regulatory reviews and planning studies for another northern infrastructure project. The proposed Slave Geological Province (SGP) Corridor would be a new infrastructure corridor supporting road, communications and energy infrastructure extending 413 km from northeast of Yellowknife to the Nunavut border at an estimated cost of $1.1 billion. From there, the vision is the Corridor would connect to an all-weather road in western Nunavut that would link to a deep-water port on the Arctic Ocean. The road, if built, would provide all-season access to a resource rich area which the territorial government estimates has seen a historic value of production of $45 billion (in 2018 dollars).

No discussion of NWT transportation infrastructure would be complete without mentioning the Mackenzie Valley Highway (MVH). Currently the MVH runs from northern Alberta to the NWT community of Wrigley. In winter, ice roads and bridges extend the highway as far north as Fort Good Hope and Colville Lake. In November 2017, the 138 km all-weather Inuvik to Tuktoyaktuk Highway opened, the first highway in Canada to reach the Arctic Ocean and connect Canada from sea-to-sea-to-sea. A proposed 321 km extension of the Mackenzie Valley Highway from Wrigley to Norman Wells is currently undergoing environmental assessment. The extension would connect more communities and increase economic opportunities for tourism and resource development in the NWT’s Sahtu and Dehcho regions.

The bigger picture would eventually involve extending the MVH north to Inuvik. In 2018 the federal and territorial governments committed $140 million towards partially completing the MVH, including building a permanent bridge over the Great Bear River, completing the ongoing environmental assessment, and constructing a 15 km road from Wrigley to Mount Gaudet.

Progress is being made―as the recent funding announcement regarding the SGP Corridor and construction of TASR show. But more must be done. The Government of the NWT has identified and is pursuing strategic transportation corridors that will transform the NWT, but the Territorial and Indigenous governments do not have the financial resources by themselves to build the infrastructure the NWT desperately needs. It’s time for Canada to recognize the benefits investing in northern infrastructure will have not just for the NWT, but for the country as a whole.  Nation building shouldn’t stop at the 60th parallel.