Wally Schumann: Transportation Committee Presentation on Infrastructure Priorities for the Northwest Territories

Delivered on November 22, 2016

Good morning, my name is Wally Schumann and I am the Minister of Transportation, Public Works and Services, and Industry Tourism and Investment for the Government of the Northwest Territories.

It is an honour to serve in this role recognizing the significant part that infrastructure plays in the success of our residents, our communities, our businesses, and the future prosperity of the Northwest Territories.

The Government of the Northwest Territories is challenged to connect communities in a jurisdiction with a small but widely dispersed population over a large land mass of almost 1.2 million square kilometres. The transportation system is aging and underdeveloped, and many infrastructure priorities compete for limited resources. Currently, only 33 percent of the land area of the NWT is within 100 kilometres of all-weather road, and only 12 of our 33 communities have uninterrupted access via the all-weather highway system.

The effects of the NWT’s infrastructure deficit continue to worsen with the impacts of climate change, which challenge the safety and reliability of northern transportation networks. Climate change is being felt in the North more strongly than anywhere else in the world and our vulnerability to the impacts is worsened by the limited number of all-weather roads and our reliance on seasonal infrastructure such as winter roads.

As such, infrastructure investments are critical to the development of our territory. Expanding the NWT transportation system will help us connect residents to new social and employment opportunities, reduce the cost of living in the territory, increase our resiliency and adapt to the impacts of climate change, and provide better access to natural resources.

In 2015, the Department of Transportation released a 25-year NWT Transportation Strategy entitled Connecting Us. This document identifies a vision of “Northerners connected to opportunities” and the Department has set three key objectives for achieving this vision. These include: Strengthening Connections by continuing to improve the existing transportation system, Capturing Opportunities by expanding the transportation system, and Embracing Innovation to increase our resiliency to challenges including climate change.

This Strategy directly supports the mandate of the Northwest Territories’ 18th Legislative Assembly, which recognizes the importance of securing funding for transportation infrastructure investments. Three new critical transportation corridors were proposed under the Strategy and the Government of the Northwest Territories is taking steps to advance these critical road projects - the Mackenzie Valley Highway, Tlicho all-season road, and Slave Geological Province Access Corridor.

Each of the three proposed NWT transportation corridor projects will help us capture opportunities to the benefit of NWT residents and all Canadians.

Today I would like to provide an update on these key strategic transportation corridors we are advancing.

Construction of an all-weather highway up the Mackenzie Valley to the Arctic coast has been a longstanding priority of the Government of the Northwest Territories.

The northernmost section of this highway, known as the Inuvik-Tuktoyaktuk Highway has been under construction since 2013 and last season a significant milestone was achieved as the north and south sides of the project met for the first time.

The fourth and final full season of construction has just started, with the highway expected to open to traffic in fall 2017.

The completion of the Inuvik to Tuktoyaktuk Highway will establish a land based connection across Canada from coast to coast to coast for the first time.  This historic event, which will take place during the year we celebrate Canada’s 150th Anniversary, would not have been possible without significant investment by the federal government.

At the same time as we are preparing to finish one section of the Mackenzie Valley Highway, the Government of the Northwest Territories has turned its attention to advancing construction of the next section from Wrigley to Norman Wells.  The Government of the Northwest Territories is working with the regional Aboriginal government, the Sahtu Secretariat Incorporated, to advance the project.

A business case for $700 million to construct the section between Wrigley and Norman Wells was submitted to the federal government under the National Infrastructure Fund of the New Building Canada Plan in 2015.  This past summer, the federal government advised that review of this proposal had been suspended until after engagement on the Canada Transportation Act Review Report and Phase 2 of the infrastructure funding plan has been completed.

Since then, the Government of the Northwest Territories has kept busy advancing planning and regulatory processes on the project. Four construction phases of the project have been identified, with construction of the Bear River Bridge as the first priority component.  The impacts of climate change are already being felt in the Mackenzie Valley, and the construction of this bridge would immediately extend the winter road season in this region, improving connections with remote northern communities. 

The Government of the Northwest Territories has also been working with its partners in the Tłįchǫ̨ Government to advance a 97 kilometre all-season road to the community of Whatì.

The all-season road will provide year-round access to residents of Whatì while significantly increasing the length of the operating season for winter roads serving two nearby communities, helping address a key climate change impact in this region.

The road will also improve access for resource exploration and development, and will increase investor confidence to continue developing the region’s economic potential.  This corridor will also support Canadian innovation in the green technologies of the future, as this region is host to world-class metals and minerals including cobalt and bismuth, which are critical commodities required in the manufacture of clean energy products such as solar panels, wind turbines, batteries and electronic vehicles.

A funding application for the project has been submitted to P3 Canada. Our officials continue to work with the federal government to provide any additional information they may require as we await a final decision from Canada.  We are hoping to receive positive news in this regard in the near future.

An environmental assessment on the project is now underway and the Government of the Northwest Territories is working with the Tłįchǫ̨ Government and the community of Whatì to fulfill all environmental requirements.

Finally, the Government of the Northwest Territories is working to improve all-weather access into the Slave Geological Province corridor, which holds world class deposits of base metals, precious metals, and diamonds.  This is an important geographic region for Canada’s mining industry, which continues to be the most significant contributor to the NWT economy.

Reducing operating and exploration costs by providing reliable access for industry to move goods, equipment, and people will boost development and exploration and encourage further investment in a region where there is still significant untapped mineral wealth.

A corridor providing the greatest economic benefit has been chosen based on the results of a mineral potential and routing study, and a business cases assessment of this corridor is underway.

Completion of the business case assessment will allow the Government of the Northwest Territories to make a better estimate of construction costs for the road and determine an appropriate funding model

An all-weather highway into the region also holds the potential of connecting the NWT highway system to a deep-water port in western Nunavut, therefore offering significant possibilities for a strengthened sustainable development partnership with the governments of Nunavut and Canada and our Aboriginal partners. This project is also a priority for the Government of Nunavut, and a working group with the Government of Nunavut has been established to advance the project in both jurisdictions.

The Government of the Northwest Territories has identified several project phases.  The most critical of these is the first portion from Tibbitt Lake, at the commencement of the current winter road, and extending to Lockhart Lake.  This portion of the road lies below the treeline and is heavily impacted by the effects of climate change, resulting in increased costs and reduced access to this all-important region of the NWT.

Undertaking environmental studies and finalizing engineering and design work are the next critical steps to advancing the project in the NWT.

In 2016, the federal government made several important announcements regarding improving Canadian infrastructure, many of which came just this fall. There is currently significant opportunity for our two governments to partner in making a long-lasting impact on infrastructure in the North.

Significant recommendations for the North were made in the final report of the Canada Transportation Act Review Panel in February of this year. These included increasing the base level of funding in federal infrastructure for the three territories, investing
$50 million per year over ten years to facilitate improvements to northern airports, and funding to support dredging at the Port of Hay River and marine infrastructure on the Mackenzie River and Arctic coast.

Additionally, this report recommended federal investment in all three priority NWT transportation corridors. The Government of the Northwest Territories provided a written submission to the Minister of Transport Canada, indicating our full support for implementation of all recommendations supporting NWT infrastructure and transportation systems across the North and strongly encouraged the timely enactment of these recommendations to maximize benefits to Northerners and all Canadians.

Based on its engagements on the report in the North, the federal government announced in the Transportation 2030 Plan that it intends to address the lack of basic transportation infrastructure in the North.

The Government of the Northwest Territories is pleased with this announcement and believes that progress can be made with funding identified for trade and transportation corridors under Canada’s Long-term Infrastructure Plan.

Small jurisdictions like the NWT are still playing catch-up and require basic highway infrastructure to connect our communities and provide opportunities for economic growth. Per capita funding puts the NWT at a disadvantage, making significant and dedicated base funding critical.

We believe that the NWT has significant untapped economic potential that can benefit all Canadians and the key to unlocking these valuable resources starts with efficient and effective transportation access.

In addition, the $2 billion identified by the federal government for small, rural, remote or northern communities can help improve connectivity, build capacity, and capture opportunities for NWT residents.

Under the new Ocean Protection Plan, there is an opportunity to improve the NWT marine system by upgrading and expanding marine infrastructure necessary for community resupply operations. Currently, twelve NWT communities rely on marine services for delivery of essential resupply and cargo. Improvements to navigation aids and improving Coast Guard capacity in the Arctic will improve safe and efficient marine operations. Improved spill response will help protect the pristine quality of the NWT environment.

Funding for climate change research and development is still needed to allow us to support a more resilient transportation system in the NWT and protect our most valuable infrastructure assets. Adaptation is becoming more and more important as the impacts of climate change continue to be felt more strongly in the North than anywhere else in the world.

In addition to investments in transportation infrastructure, there are other priority areas where we think we can develop productive and cooperative partnerships with the Government of Canada.

The first of these is the expansion of the existing Taltson hydroelectric system in the southeast area of the Northwest Territories. The project includes a 60 megawatt expansion of the Taltson hydro site and the construction of a 200-kilometre transmission line to Saskatchewan. This project has the potential to reduce emissions in Saskatchewan by providing a green energy corridor to our southern neighbours.

In the context of the work stemming from the Vancouver Declaration, the expansion of the Taltson hydro site would help reduce Canada’s greenhouse gas emissions by 360,000 tonnes annually, conceivably a permanent reduction as this infrastructure is maintained over generations. In addition, the expansion would rely on existing water storage with no new flooding to generate on going revenue stream. And this project would be built in partnership with Aboriginal governments, creating economic opportunities for Aboriginal-owned businesses across the NWT.

The benefits of this power project are significant. It is a project that can create economic opportunities both locally and nationally, support and provide benefit to the Aboriginal peoples of the Canada, and meet national objectives of transitioning to a clean growth economy.

Another priority area for us relates to advancing solutions to address the dependency on diesel generated power in the north.   Currently, standalone diesel generation is the prime source of power for 25 of the 33 communities in the Northwest Territories. This situation is costly from both an economic and environmental perspective, and we have developed what we believe are the best, most innovative solutions for addressing diesel-generated power use in Canada’s remote North.

This infrastructure priority consists of three smaller scale renewable and alternative energy projects: the Inuvik Wind Project, High Penetration Solar, and the transmission line to Fort Providence.

The Inuvik Wind Project is the development of up to 4 megawatts of wind energy and a 10 km transmission line to the Town of Inuvik. It is estimated that the Inuvik Wind Project will reduce greenhouse gas emissions by 4,300 tonnes per year and will eliminate the need for 1.3 million litres of diesel annually in the largest diesel community in the Northwest Territories.

It is a ground-breaking project which would be the first large scale wind project north of the Arctic Circle in Canada and an example of what could be used to transition many communities that rely on diesel generated power to low-carbon renewable power sources. As well, the knowledge and expertise acquired through this project could prove to be valuable to other circumpolar countries.

The second solution includes the installation of high penetration solar with batteries or efficient variable speed generators in 15 diesel-powered communities in the Northwest Territories. Batteries and variable generators are the only way to significantly decrease greenhouse gas emissions in remote communities, and can achieve diesel and emission reductions of 20 to 25% as opposed to the 2 to 4% from solar alone.

The notable aspect of this renewable energy solution is that the installation of high penetration solar with batteries has already been successfully demonstrated in two high Arctic communities - the communities of Colville Lake and Aklavik. Reproducing this success in 15 additional communities in the NWT would provide annual greenhouse gas reductions of 2,600 tonnes per year, improve energy security for these communities, and advance our national goal to reduce our reliance on diesel power generation.

The third solution within this infrastructure priority is the construction of a transmission line to connect Fort Providence – one of the Northwest Territories’ larger diesel communities – to the Taltson hydroelectric system. Making use of existing highway corridors, this transmission line will reduce greenhouse gas emissions by 4,900 tonnes per year and permanently supply renewable power to the community. And by accessing existing hydropower, the project will provide a reliable renewable energy source without the intermittence of wind or solar.

Mr. Chair, collectively these projects reduce greenhouse gas emissions, lower the cost of living and demonstrate innovative solutions for off-grid diesel communities in Canada’s remote North. Reducing our dependency on diesel energy systems will shrink territorial emissions and will have real and positive impacts on the high cost of living and the territorial economy.

The Government of the Northwest Territories continues to demonstrate our commitment to the development of renewable energy technologies and will continue to adopt and advance these technologies now and in future years.

We look forward to working with our federal partners to make critical infrastructure investments in the Northwest Territories that support a prosperous future for Northerners and all Canadians.

Thank you.