Bob McLeod: Arctic Circle Assembly- Breakout Session: Infrastructure Funding

October 21, 2018
Ministers' Statements and Speeches

Good morning.  My name is Bob McLeod and I am the Premier of the Northwest Territories. It is great to be back at this forum for the second time. I am pleased to be able to offer some remarks before you dive into the complicated topic of how best to support and fund infrastructure in the North.

I’m here to tell you that this conversation is critical. It is critical because there is a role for public and Indigenous governments, industry and investors to play in unlocking the potential of the Arctic that will allow northern peoples to thrive. This is a conversation that we are having right now in the Northwest Territories.

Resource development has traditionally been at the heart of the Northwest Territories economy, since oil was first discovered in the Norman Wells area more than 90 years ago. Oil and gas development also contributed to economic development in Beaufort Delta and Liard regions of the territory.

Mining has driven the economy of our capital Yellowknife and the surrounding region since the 1930s, first with gold mining and now diamond mining.

Lead and zinc mining was important to the economy south of Great Slave Lake and was the main reason that the Government of Canada helped fund and operate the only railway line connecting our territory to southern Canada.

Mining was also one of the main drivers of hydroelectric development in our territory. Two of our biggest hydro facilities, the Snare and the Taltson hydro facilities, were both built initially to help supply inexpensive renewable energy to working mines and their surrounding communities.  While the mines have since closed, the hydro facilities remain an important clean energy legacy for the residents of those regions.

But things have changed and we are learning that we cannot take our economic future for granted simply because we have an abundance of natural resources.

In 2008, almost half of the Northwest Territories’ economy came for resource development. While it remains the biggest single sector of our economy, by 2017 its contribution to territorial GDP was 26 percent – half of what it had been in 2008.

Between 2007 and 2016, the NWT economy shrank from $4.5 billion to $3.7 billion dollars. During that same time the territorial unemployment rate rose from 5.7 percent to 7.4 percent and there were 800 fewer jobs in the territory.

During this time we have seen increased growth in other sectors like tourism and agriculture, but the fact remains that when looking at their overall contribution to our economy, they simply cannot replace what resource development contributes.

Take for example our diamond mines. We currently have three diamond mines in the Northwest Territories, contributing to Canada’s status as the third biggest producer of diamonds by value in the world.

These mines are the engine of our economy, but they will not last forever. When they eventually close, our economy is expected to shrink by $1.1 billion dollars and lead to about 3,300 job losses. That is a significant decline in a territory that only has 44,000 people to begin with.

The message is clear; a smaller economy means fewer jobs and less money to go around. Less money going around means economic and social consequences for our families and communities.

The residents of the Northwest Territories want the same things as other Canadians. We want to be healthy and educated, have direct employment opportunities and be able to provide for ourselves, our families and our communities.

There are two related drivers that will help us achieve these aspirations;

  • a sustainable economy that is fueled by responsible resource development; and
  • much needed public infrastructure that will help ensure the ongoing development of our economy and lower the costs of living and doing business in one of the remaining frontiers of the world.

What many Canadians take for granted Northerners live without. Infrastructure projects that connect people to one another, promote development and economic activity, and connect our residents to the rest of Canada, are lacking.

For example, in the Northwest Territories only 12 of our 33 communities have uninterrupted access via an all-weather highway system, and only 33 percent of the land area of our territory is within 100 km of all-weather roads.

Only eight Northwest Territories communities have access to hydroelectricity, in spite of the fact that studies have shown we have over 11,000 MW of untapped hydro potential. The remaining 25 communities in our territory are powered primarily by standalone diesel generation, at great financial and environmental expense.

Not only does this impact our residents in terms of a high cost of living, but it also creates challenges for economic growth.

The need for a longer-term plan that sets out how we will develop northern infrastructure is a critical component for bridging the infrastructure gap and promoting economic development.

And that is where the conversation that you are having today comes into play. There are opportunities to be had through strong partnerships with industry, Indigenous governments, the federal government and our territorial government. But without the coordination of a longer-term plan, and without strong commitments and investments from the Government of Canada, we won’t reach our full potential.

The rich resources of the Northwest Territories are still largely untapped. Our world class oil and gas reserves are stranded by lack of transportation infrastructure, including a pipeline that has been permitted, but never built. Opening a mine in the Northwest Territories can be six times more expensive than in other jurisdictions. Lack of roads leaves mineral resources like cobalt, gold, lithium, bismuth and rare earth elements necessary to fuel the global green economy mostly inaccessible. Lack of energy infrastructure, particularly transmission lines from our clean, renewable hydro facilities means remote mines have to rely on diesel trucked or flown thousands of miles to meet their power needs.

Strategic, deliberate investment in just some of these areas, as well as in marine infrastructure and ports, could unlock a wave of northern development that would provide jobs and opportunities to thousands, drive the national economy, and create a lasting legacy of public infrastructure for the people of the North.

Currently, we are in discussions with the Government of Canada and our Indigenous Government partners on the development of the federal Arctic and Northern Policy Framework which we hope will be the long-term plan we have been looking for. We hope that it will provide meaningful funding and policy commitments from the federal government that will finally make it possible for northerners to experience the same opportunities and quality of life as southern Canadians. That will require infrastructure commitments that make investing in the North a priority.

And there are positive signs that our federal partners are hearing this message. Together we built the Inuvik to Tuktoyaktuk highway – the most northern highway in Canada – and we have partnered to advance the Mackenzie Valley Highway project with an investment of over $100 million from the federal government. We have also been having discussions on transformative energy projects like the expansion of the Taltson Hydro-electric facility that would bring green energy to residents and resource developers and by lowering the cost power.

A strong economy is the key to a strong territory and a sustainable future for all our people. It is essential for the growth and development of business and industry, which, in turn provides Northwest Territories residents with the jobs and income they need to support themselves and their families.

I believe in the potential of the Northwest Territories and in the opportunities that exist in bringing public infrastructure projects to fruition and in responsibly developing our resources. We have the resources, the people and the knowledge to build a thriving and prosperous territory that will give the people of every region and community long-term financial security and a sustainable future. What we need and want now are the partnerships and commitments that will help us get there.

The Northwest Territories has been built on cooperation, respect and working together and will continue to be developed on those principles. It is time to have these conversations around what the next stage of partnership development should look like in the north so that our people, our businesses and our industry partners and seize these opportunities together.

Thank you.