Bob McLeod: Speech to Toronto Business Leaders

December 10, 2018
Ministers' Statements and Speeches

Thank you. I’m pleased to be here with you today to talk about investment and economic development opportunities in the Northwest Territories that I believe are in the national interest.

Today’s discussion is a continuation of the national discussion about the future of the North that I kicked off when I issued my “red alert” in Ottawa a little over a year ago.

At the time, I was very concerned that southern Canada and the federal government were taking the Northwest Territories economy for granted.

There were two main causes for my concern. One was the creation or continuation of federal policies that directly affect industries and sectors that are central to the economic strength of the territory.

A good example was the unilateral moratorium on offshore oil and gas development in the Beaufort Sea that is now almost two years old and which has put the possibility of growth in the single most important sector in that region on hold.

My other concern was the lack of a clear commitment from Canada to make the necessary infrastructure investments the Northwest Territories still needs to diversify and grow its economy to its full potential.

Here, we are looking for significant investment in transportation corridors, like the Slave Geological Province Corridor and Mackenzie Valley Highway, that would connect Canada to rich and still largely untapped reserves of natural resources.

We also are looking for federal investment in transformative energy projects like the proposed Taltson Hydroelectric expansion, a 60 megawatt project that would provide renewable energy to green the mining industry, stabilize the high cost of living for our residents, and displace 240 kilotonnes of greenhouse gas emissions annually.

I am pleased to say that Ottawa has responded positively to my red alert and we are starting to see the federal government demonstrate its commitment to northern development more concretely.

The appointment of Dominic LeBlanc as Minister of Intergovernmental Affairs, Northern Affairs and Internal Trade was an excellent first step. I have met with him several times since his appointment and I am confident he shares my commitment to sustainable northern development, including ongoing support of the natural resource sector that has been the heart of the Northwest Territories economy for decades.

We are also seeing movement on the federal policy front, with the announcement by Minister Leblanc and Minister Amarjeet Sohi that our government and the Inuvialuit Regional Corporation will have a role in the science-based review of the oil and gas moratorium imposed two years ago.

Canada has also committed to begin negotiations with ourselves and the IRC on the co-management of offshore oil and gas. This was a key commitment in the 2014 devolution agreement that we are keen to make progress on, as it represents a huge opportunity for our government and the Inuvialuit to meaningfully participate in and benefit from a major source of potential prosperity.

Canada has also stepped up with significant financial commitments in recent months, including $100 million in funding for continued work on the Mackenzie Valley Highway, $30 million for a wind energy project in Inuvik, and over $24 million for upgrades to the Snare Forks hydroelectric facility.

Canada has also recently committed almost $100 million over ten years for territorial housing needs under the National Housing Strategy and $23 million for energy efficiency projects under Canada’s Low Carbon Economy Leadership Fund.  

We welcome these investments and Canada’s renewed interest in the Northwest Territories. But we need to make sure that it does not end there.

As I have already noted, we cannot afford to take the Northwest Territories economy for granted.

Resource development has traditionally been 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.

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.

Low commodity prices and changing global demand is altering the fundamental economics of resource development in the North.

While these are factors outside our control, we are also challenged by factors we do have some control over, including transportation and energy infrastructure.

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. 

Our government continues to lobby the Government of Canada for a clear plan and solid commitments to address outstanding territorial needs so that Northerners can be full participants in a strong national economy.

But it shouldn’t just be up to governments to invest in the North. There are significant opportunities for private sector participation and investment, as well.

We continue to pursue P3 funding opportunities for infrastructure projects, including a recently approved all-season road to the Tlicho community of Whati. This approximately $200 million, 97 kilometre project will replace the southern section of an existing winter road, providing year-round access to its residents, as well as to a nearby cobalt-gold-bismuth-copper project being developed by Fortune minerals.

The Tlicho Government – the local Indigenous government – is committed to the road project and recently agreed to become an equity member in the private partner consortium selected as the preferred proponent.

Indigenous participation in and support for projects in the Northwest Territories is an important factor that should not be underestimated.

Almost half of the Northwest Territories population is Indigenous and Indigenous governments and companies are both decision makers and major players in economic development projects.

Our government has cultivated close working relationships with Indigenous governments and communities and is working hard to ensure they continue to participate in and benefit from development.

Maintaining Indigenous support for development was one of the reasons that I convened a symposium of Indigenous leaders in Inuvik at the beginning of October to discuss the future of the territorial economy.

Over two and a half days, we had some frank discussions about how we can work together to promote the economic development of the whole territory, not just our individual regions. We took a hard look at the challenges we face, including those we sometimes create for ourselves, and at the opportunities for economic development we think we can realistically pursue.

At the end of our discussions, leaders agreed that we need to take immediate steps to address the economic challenges the Northwest Territories faces, in order to ensure a sustainable future for the North and its residents.

Leaders also agreed that large-scale investment in northern energy, transportation and communications infrastructure corridors is key to creating investment and economic opportunities in all sectors.

Our goal remains to create a prosperous, sustainable future built on the foundation of a strong, diversified economy, which consists of traditional sectors like tourism, agriculture, harvesting, cultural arts and fishing, but also recognizes the large role that non-renewable sectors like mining and oil and gas have and will continue to play in our territory.

I am pleased with the consensus we achieved in Inuvik and believe that the shared support of our government and Indigenous people for development in the Northwest Territories represents a competitive advantage that differentiates our territory from other parts of Canada.

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.

I look forward to our discussions this afternoon and to exploring ways to capitalize on the potential of the Northwest Territories for all our residents and all Canadians.