Wally Schumann: Presentation to the Senate Committee on the Arctic

Delivered on September 10, 2018

Check against delivery

On behalf of the Government of the Northwest Territories, I’d like to thank you for this opportunity to speak about our concerns and priorities, and how we can work together to improve the lives of northerners.

I appreciate that you’ve structured your hearings around the themes of the federal government’s Arctic Policy Framework. This initiative has great potential for helping our territory achieve its priorities and support its development.

The Government of the Northwest Territories has been an active participant in the development of the Arctic Policy Framework. Through our work on the framework, as well as in other forums, our government has been communicating our over-arching goal to create a prosperous, sustainable future for the people of the Northwest Territories.

A strong, diversified economy is the foundation that provides residents with the jobs and economic opportunities needed to support themselves and their families.

Responsible resource development has, and will continue to be, the backbone of our economy and is central to ensuring the territory develops a strong middle class.

With a strong resource development base, we will be able to support diversification of our local economies into emerging and established sectors such as tourism, traditional economies, agriculture, arts and crafts, manufacturing and commercial fishing.

This diversification increases the sustainability of our economy and broadens opportunities for Northerners.

Before I speak about specific economic priorities, I’d like to talk about how our government works to create opportunity throughout the Northwest Territories through partnerships with Indigenous governments and businesses.

The Prime Minster has spoken extensively about Indigenous reconciliation. It is an important – and welcomed – priority for many in Canada. The Northwest Territories is an example of how real partnership with regional and community Indigenous governments, based on mutual respect and recognition can lead to increased political self-determination and economic participation for the North’s Indigenous people. Reconciliation is an ongoing process, but we think that our territory is well ahead of the rest of Canada and there are some lessons we can share.

The NWT is one of the only jurisdictions in which decision-making and resource revenue sharing agreements exist with Indigenous governments.It is an area in which we are proud to be leaders – for the benefit of our territory and those who choose to invest in its future.

Our dynamic, modern economy is defined in large part by our innovative Indigenous businesses.From mining and mine services, to Indigenous cultural tourism; and everything in-between, our Indigenous business community has evolved over decades of world-leading Indigenous participation in business and economic development.

Indigenous businesses have proven their capacity to play an active, fully-engaged role in the economy and are encouraging NWT governments and organizations to act and invest accordingly. The increasing and expanding participation and engagement of Indigenous businesses, in particular, is evidence of a changing and fast-developing NWT economy.

A grassroots approach to economic growth and diversity is critical to maintain the territory’s overall economic health and stability, to build capacity and self-sufficiency in communities. Diversification across sectors, and within our resource sector, is an important economic strategy to pursue for the prosperity and well-being of our people and to grow our population.

The Government of the Northwest Territories actively supports economic diversification through strategic investment to support tourism, film, agriculture, information and knowledge economy, traditional economy, manufacturing, and other renewable resource-based activities locally, within Canada and internationally.

While our economy is shifting, resource development remains the main contributor of the Northwest Territories’ economy, and will be a significant source of middle class jobs and business opportunities well into the future.

Our territory has mineral and petroleum resources that could position it as a primary economic driver for our country. The Northwest Territories is home to many of the minerals that will fuel the global green economy, including cobalt, gold, lithium, bismuth, and rare earth elements. Alongside our mineral resources, our territory has natural gas resources and as we begin to see a shift to lower-carbon alternatives, our natural gas has the potential to meet market needs and reduce greenhouse gas emissions.

A healthy environment is essential for northerners. We have decades of experience in safe and responsible resource development and are already positioned to drive innovation in cold climate research extraction.

The Northwest Territories still requires much of the basic infrastructure that already exists in southern jurisdictions. This includes roads, to which most of our communities do not have access.In partnership with Canada we need to continue to build territorial and community infrastructure to support healthy and prosperous communities, and to lower the cost of living.

Large-scale investment in northern energy, transportation and communications infrastructure corridors are key to creating investment and economic opportunities in all sectors.

The Government of the Northwest Territories has identified four priority infrastructure projects, including the Taltson Hydro Expansion Project, Tłı̨chǫ All-season Road, Mackenzie Valley Highway, and Slave Geological Province Access Corridor.

An overview of these projects can be seen on page 1 of your slides.

Each of these have the potential to make a transformative impact on the territory by helping unlock our full economic potential, transition to a lower carbon economy, and stabilize the cost of living.

With our small population, we can’t get there alone. While we will be working with Indigenous governments and businesses, as well as with industry, the federal government would need to be a key partner.

The Government of Canada has been a key proponent of the vision and realization of transformative infrastructure investment and we look forward to continuing work with Canada to bring the North to the forefront of transformative, nation building projects and investments that will benefit all of Canada.

Working with the Government of the Northwest Territories to make transformative investments in the NWT’s economy and infrastructure, people and environment – provides the federal government with  an opportunity to achieve its goals of growing the middle class, fostering meaningful reconciliation, protecting the environment and strongly positioning Canada as an Arctic Nation.

If you flip to page 2 of your slides, I’d like to speak about the Taltson Hydro Expansion project now.

The Taltson Hydro Expansion is a key element of our vision to transform our economy by lowering industrial emissions, improving energy security, harnessing innovation and reducing the cost of living, while providing access to clean power that will fuel the technology sector and advance economic indigenous reconciliation.

Connecting the Taltson and Snare hydro systems and expanding Taltson’s capacity will provide cheaper, cleaner more reliable energy for over 70 percent of our residents and businesses and lay the foundations for greening current and future mining developments.

Partnering with Indigenous groups to advance the Taltson Expansion is essential for meaningful economic reconciliation and will be a key area of focus at the start of the project. Incorporating Indigenous rights, knowledge and cultural values into project design and implementation will help create prosperity and sustainable livelihoods. Indigenous ownership and equity participation is an integral component of the project.

The project will apply innovative techniques in environmental stewardship through the deployment of Canada’s first High Voltage Direct Current submarine cable in fresh water, which will span over 100 kilometres across the tenth largest lake in the world.

Phase I will include a 60 megawatt expansion and a transmission line to connect the existing Taltson facility in the southeast part of NWT to the Snare hydro system on the north side of Great Slave Lake.

The Taltson River currently has 18 megawatts of installed hydropower but has 200 megawatts of potential that could be harnessed in a phased in approach.  All phases will rely on run of river technology, without the need for flooding.

The combined benefit of increased road access for more efficient re-supply and development and reduced energy costs through the Taltson project would completely transform the investment environment for industry.

The Government of the Northwest Territories has been in discussions with Environment and Climate Change Canada regarding funding support for preliminary work, including engaging stakeholders, identifying electricity markets, researching technical details, and initiating environmental and regulatory processes.

At this time, we are seeking 15 million over three years to undertake the technical and feasibility studies needed to launch the environmental assessment process, with a further 3 million for indigenous partners to be directly involved as we work to formalize the investment relationship and project plan.

The federal government has been a key partner in the development of the NWT through historic investments in critical infrastructure, such as the Snare and Taltson hydro-electric facilities built in the 1940’s and 1960’s respectively.

Taltson Expansion is a new opportunity to take up the mantle of nation building in the north by contributing to the planning phase initially and over the longer term through a variety of financial supports available to get the project built – it can’t happen without your support.

If you now flip to page 3 of your slides, you’ll see a map outlining the more advanced of these projects which is the Tłı̨chǫ All-season Road.

This project received approval for funding under the P3 Canada Fund in January 2017.

Our government has been working with the Tłı̨chǫ Government throughout the project, which will provide an all-season access road to the community of Whatı̀ and increase resiliency to climate change by providing a longer window of access to the communities of Gamètı̀ and Wekweètı̀̀.

Improved access will also boost the economic potential of this region, which is already is being demonstrated by Fortune Minerals’ proposed NICO base-metals project located outside of Whatı̀.

The GNWT continues to make progress towards project construction and the next key stages, including concluding the environmental assessment phase and finalizing procurement are expected to be completed in the coming months.

On the following page, page 4 that will bring us to our next project - the Mackenzie Valley Highway Project.

The GNWT has held a long-standing vision of constructing an all-weather highway up the Mackenzie Valley to the Arctic Coast and recently completed the northernmost section of this corridor with the opening of the Inuvik Tuktoyaktuk Highway in November 2017.

We are now focused on constructing the southern section between Wrigley and Norman Wells in partnership with Indigenous organizations, including the Sahtu Secretariat Incorporated.

The project would connect several remote Indigenous communities to the all-weather highway system, helping to stabilize the cost of living, while providing access to a wealth of petroleum reserves and mineral resources.

Work on the 14 kilometre Canyon Creek All-season Access Road outside of Norman Wells represents a first step in converting the existing Mackenzie Valley Winter Road to all-weather highway and will be completed in November 2018.

This summer, approval of federal funding was received under the National Trade Corridors Fund to advance next steps in the Mackenzie Valley Highway project. This funding is being cost shared with the GNWT and represents a total investment of $140 million.

Funding will go towards construction of the Great Bear River Bridge, Wrigley to Mount Gaudet Access Road, and environmental and planning studies supporting final routing and design and leading to obtaining permits for road construction.

The two construction components will extend the operating season of the existing Mackenzie Valley Winter Road, increase our resiliency to the impacts of climate change, and further build local capacity for the eventual construction of the Mackenzie Valley Highway. 

Future federal support will still be required to fund the construction of all-weather segments forming the Mackenzie Valley Highway.

We believe that construction of the section between Canyon Creek and Tulita may be good fit for funding under the Green Infrastructure Fund of the Integrated Bilateral Agreement with Canada due to its potential to help adapt to the impacts of climate change on transportation infrastructure.

You can now turn to page 5, which depicts a map of the Slave Geological Province Access Corridor.

Expanding supporting infrastructure into the Slave Geological Province is a key part of the GNWT’s strategy to ensure the sustainability of its resource driven economy and contribute to greening territorial and national economies.

This project is important to the future health of our economy as there is increasing concern for the NWT with the expected closure of the territory’s operating diamond mines within the next 25 years.

Climate change has resulted in shortened operating seasons of the winter road serving the diamond mines, occasionally resulting in increased costs and a loss of revenue to the GNWT, Canada, and Indigenous governments.

It is important that all-weather access be extended into the region to ensure existing industry operations can maximize the value of their investments and to ensure that the world-class deposits that remain can someday be developed. This will support increased revenue and the creation of good middle class jobs for Northerners.

All-weather road access would come with the additional benefit of enhancing the feasibility of expanding the Taltson hydro system and maintaining a transmission line into the Slave Geological Province.

The long-term vision of this project is to connect to the Grays Bay Port and Road project in Nunavut. Once complete, this would result in significant possibilities for the shipment of resources to market through this Northern supply route as well as enhanced partnerships with Canada, Nunavut, and Indigenous governments.

The GNWT intends to resubmit its application for the project under the Northern-specific call for proposals expected to be issued under the program by the end of 2018.

Key components of this application will include replacement of the Frank Channel Bridge, which would eliminate a major bottleneck in the resupply system, and advance environmental and planning activities to bring this project to a shovel-ready state.

On the final slide, page 6, you will see our vision for Marine Infrastructure in the north.

The GNWT recently submitted three applications for funding to support the improvement of marine operations under the Oceans Protection Plan.

These included proposals for a planning study for the development of a Hay River Multi-modal Inland Terminal and Tuktoyaktuk Marine Services Centre. It would also include improvements to community infrastructure, such as dock resurfacing and reconstruction; and the acquisition of four double hulled barges for GNWT marine resupply operations.

These investments would increase the safety and efficiency of marine resupply operations and stabilize the cost of living in remote Indigenous communities, enhance protection of the marine environment, and help take advantage of economic growth opportunities.

Although the federal government has suggested that some of the GNWT’s other marine priorities would be better suited to the National Trade Corridors Fund, we have already identified the Slave Geological Province Access Corridor and Mackenzie Valley Highway projects as being of highest priority under this program.

The GNWT believes the Oceans Protection Plan should provide flexibility to reflect the priorities of the North and invest in a variety of marine infrastructure that supports the safety and efficiency of resupply to the NWT’s 16 marine-serviced communities.

Senators, the Northwest Territories’ infrastructure deficit has not only challenged the territorial government to remain competitive with southern jurisdictions in attracting investment in the resource sector, but in striving to serve their respective peoples, communities, and businesses.

We have a wealth of economic resources and potential – and the payoff on investing in the North will be tremendous.

Government and industry partners who invest in our future will benefit from our prosperity and development.

Canada has an important role to play in helping our territory achieve its priorities and support its development and we are anxious to work with the Government of Canada – and to bring the North to the forefront of nation-building projects and investments that will benefit all of Canada.

Though together we have made some advancements, Canada can continue to demonstrate its commitment to the North by working with us on a plan for its long term development that includes specific commitments for spending and investment on areas that are priorities for Northerners, preferably through the Arctic Policy Framework.

If you have questions, I would be happy to answer them.