Wally Schumann: Speech to Mining Working Group, PNWER - Annual Summit

August 2, 2017
Ministers' Statements and Speeches

Check Against Delivery

Good afternoon. It’s good to be here with so many others interested in the long-term prosperity of our region.

As the Minister for Industry and Infrastructure in Canada’s Northwest Territories, it is my pleasure today to set the stage for a discussion about the relationship between infrastructure and mining.

You may wonder who we are – as a smaller jurisdiction - to speak to this. Simply put, we are a jurisdiction who support our people in large part thanks to this relationship, and we understand the challenges faced by mining when it comes to infrastructure, or a lack of, better than most.

Canada’s Northwest Territories (we are known as the NWT) is a jurisdiction that has been built on mining. Our modern history is founded on the discovery of gold, and it was this resource that helped established our capital city of Yellowknife 50 years ago, and first attracted prospectors and investors to our part of Northern Canada. 

Over the past 25 years, it has been us, the NWT, who have made the dream of North American diamonds a reality. Today, we are global leaders in diamond production with three operating diamond mines that export over $2 billion in diamonds annually.

Our jurisdiction also boasts world class deposits of minerals such as lithium and bismuth that will be needed to power green technology and digital sectors of the future.

But while we have more than a million square kilometres of resource-rich lands, and the demand for our resources is projected to rise, our path stability and resource prosperity is blocked by a lack of infrastructure.

Nowhere is the economic link between infrastructure and mining prosperity as obvious as it is in Canada’s Northwest Territories today.

Long distances and challenging landscapes mean more expensive projects. With only 45 thousand people – distributed over 33 independent communities, our tax base is too small to support many of the major projects that we need, and want, without other investment. 

We struggle to get our resources to market economically and our infrastructure deficit is among the largest of Canada’s sub-national jurisdictions.

The state of our transportation infrastructure makes this point all too clear.  Only one third of our total area is within 100 kilometres of an all-weather road.

We bridge this gap seasonally with a network of ice and winter roads.  In fact, when it comes to finding ways to build and maximize our winter highways, we are celebrated as pioneers; but it doesn’t take away from the underlying reality that the lack of transportation access in the NWT hampers our territory’s ability to move forward and grow economically.  

This is the discussion that we are having this morning; what do we need to do to help bridge the gaps between infrastructure and development potential 

American or Canadian, North or South, ports or roads; regardless of where or how infrastructure is needed, there are essentially three main ways to finance it.

The first option, of course, is with public funding.  My predecessor has spoken in the past about the added element of public investment that exists in our jurisdiction, where our Indigenous governments have acted as partners by bringing their capital, realized through a commitment to settling land claims, to the table as investors. It’s an approach we encourage and use when we can, but even then, the level of funding that we can provide as a smaller jurisdiction is limited – and is no match for the fiscal realities of meeting our infrastructure needs.

The second option is to ask industry to pay for the infrastructure it needs to do business.  Again, we’ve seen this approach work to a level with our diamond mines; but in an area as costly as ours, it is limited and not sustainable on its own.  The days of industry-built legacy projects being left behind to benefit a jurisdiction and it residents when a project is over, is a hard and often times unrealistic sell in today’s \ competitive investment climate.

Particularly in the Arctic, I believe the answer is not to be found in government or industry alone, but rather in the combination of the two.  Partnership is not a new concept and there are many examples in our history of industry and government working together to building nation-building infrastructure that show the long lasting benefits of this approach

In the late 40’s the Government of Canada created the Northwest Territories Power Commission as a federal crown corporation. One of its first projects was the construction of the Snare Rapids Hydro Facility to power the Giant Gold Mine and our capital city of Yellowknife.  The mine helped provide funding for the transmission line, which benefited both production and the growing community of Yellowknife. The hydro facility lives on today and continues to serve our residents.

In the 60’s, the first loads of ore were shipped from Cominco’s lead-zinc mine at Pine Point on the Great Slave Lake Railway. CN Rail built the railway with federal support and the Pine Point Mine agreed to shipping and price guarantees to help support its operations. This opened up the region and cemented rail as a viable option to the town of Hay River, the second largest in our territory.

In 1965, the federal government supported the construction of the Taltson Dam to supply power to the Pine Point Mine, as well as the communities of Pine Point and Fort Smith. Taltson remains today the single largest renewable energy source in the NWT, and one of our largest potential investment opportunities.

The public private partnership model is by no means new – but perhaps it is time to reconsider the scope to which it can be applied.  As our economies grow ever more connected, there is an opportunity to expand this government-industry partnership to one reflecting the mutual needs of multiple jurisdictions.

As resource development in the North grows, industry partners and companies in other jurisdictions realize strong returns on their investments. Meanwhile, benefits and royalties also flow to other governments in Canada, and to other jurisdictions who specialize in secondary industries

It seems logical that the financing of infrastructure, critical to the success of the resource extraction industries, should be shared appropriately across jurisdictions — both national and international — and amongst private sector stakeholders set to benefit from these industries. We have seen partnerships work, and it’s time to show that it can work at the scale that will bring larger benefits to all of us.

Canada’s Northwest Territories is well-positioned to be the proving ground for such a model; one which could leverage funds necessary to make the case for nation-building infrastructure projects, and see them to completion.

The current GDP of the Northwest Territories is $4.8 billion. Our resource development sector, which includes mining, as well as oil and gas, accounts for nearly 25% of that number.

Our economy is extremely inter-dependent, with industries like construction, transportation, wholesale trade, and professional, scientific and technical services being significantly impacted by the resource sector.

We already have identified projects ideal for this expanded scope. The proposed Mackenzie Valley Highway extension would see thousands of kilometres of all-season road stretching from our central region to Inuvik — opening up exploration and development opportunities from the 60th parallel to the Arctic Coast at a fraction of the cost for explorers from down south.

A proposed road through the world-renowned Slave Geological province could bring unprecedented mineral exploration activity and extend to a proposed Arctic port in Nunavut’s Gray Bay. And the long-proposed and permitted Mackenzie Valley Pipeline could transport our petroleum south, or take stranded Alberta oil north.

Each of these projects have two things in common: the potential for multiple public jurisdictions and industry stakeholders to benefit Ladies and gentlemen, I began by posing the question.  Who are we in Canada’s Northwest Territories to influence the discussion that you are proposing to have today?

The Government of the Northwest Territories has a long history of collaborating with industry, the federal government and our Indigenous partner governments.  We are innovative, self-sufficient and resilient.

We’ve done more than just create concepts. We’ve proven nation-building projects can happen in Canada’s North. We’ve done it by extending Canada’s road network to the furthest reach of the PNWER region at the Arctic Coast. We’ve built a fibre optic link poised to open more communities than ever to the knowledge economy which will drive our collective futures.

These projects will serve to underpin resource development in the NWT.  More importantly, these investments in infrastructure are – for us - economic drivers in themselves. They offer opportunities for growth far beyond the resource sector.  Addressing our infrastructure deficit will be fundamental to realizing the full economic potential of the North and to mitigating the impacts of climate change.

We in the Northwest Territories are keen to be on the cutting-edge of the issue of infrastructure. As a northern jurisdiction where it is so costly to do business, and our infrastructure deficit so severe, we are eager to build partnerships wherever they can be found. And I believe we as a region are ready for a discussion on how to expand our networks across boundaries and borders, and build stronger bridges between the public and private sectors so we see through the projects which will unleash our full potential.

Thank you. I look forward to hearing more great ideas from all those taking part today.