Pipe dreams, road dreams

Maybe it’s the long winter nights or the crisp air or the solitude, but when you dream in the Arctic, you can’t help but dream big.

That’s certainly what the Northwest Territories’ government is doing by reviving its ambitious proposal to build a permanent, all-weather highway along the right bank of the untamed Mackenzie River, with new asphalt being laid down at the town of Wrigley in the south and extending all the way north to Tuktoyaktuk on the shores of the Arctic Ocean.

This road has been on the drawing boards for half a century, and building it will cost at least $700 million.

The N.W.T. government unveiled a similar proposal for a permanent road in 2002, in a report entitled “Corridors for Canada.”

Out of that initiative came a more prosaic $130-million program, equally funded by the territorial and federal governments through the Canada Strategic Infrastructure Fund (CSIF). The money went towards improving the Mackenzie, Liard, Dempster Yellowknife and Ingraham Trail highways, and building permanent bridges along the route of the current Mackenzie Valley winter road.

The N.W.T. government is naming its latest proposal “Corridors for Canada II,” and calling for $162 million to be spent on improving existing roads and related infrastructure, and another $700 million for the new, permanent Mackenzie River highway.

Essentially, it wants the federal government to cough up three-quarters of the cost of the permanent highway, and proposes a $500-per-trip toll on commercial vehicles to help pay for some of the rest.

The project would be completed in several parts, including improving the existing all-weather Mackenzie Highway that connects the Great Slave Lake region to Wrigley, extending the all-weather road from Wrigley to the Dempster Highway south of Inuvik, and building a 187-km, all-weather road from the oil-and-gas exploration hub of Inuvik to the coast at Tuktoyaktuk.

The permanent highway would serve the interests of Northerners and Canadians in many ways, says N.W.T. transportation minister Michael McLeod.

“Resource development along the Mackenzie Valley and in the Beaufort Delta, northern sovereignty, emergency response, economic and social development, and our ability to adapt to climate change would all be positively affected,” he says.

However, the N.W.T. government doesn’t expect any reaction to its latest highway proposal from the federal government until after the national elections are held in late January.

(The Northwest Territories is home to some 43,000 people, about half of whom are aboriginal, and hosts only one federal riding, with Liberal minister of state for northern development and Dene First Nation member Ethyl Blondin-Andrew the long-time incumbent.)

But with fading Liberal Prime Minister Paul Martin trying desperately to cling to power by making reckless spending promises at the rate of $1 billion a day through November, the N.W.T. is shrewd in hurrying out its proposal now, just in case it’s able to snag a hasty half-billion dollar funding promise from the feds — only half a day’s “work” by today’s Prime Minister’s Office.

Economically, the Northwest Territories is booming, with the Ekati and Diavik diamond mines near Yellowknife in the east cranking out diamonds valued in excess of $2 billion annually, two new diamond mines on the way, and communities in the west bracing themselves for the flurry of activity that would arise should the red-tape-entangled Mackenzie Gas project receive the green light.

The Mackenzie Gas project would see a natural-gas pipeline snake 1,300 km along the right bank of the Mackenzie River down into Alberta’s gas-hungry oil-sands district. It would cost US$6 billion and take four years to build.

However, the project is competing head to head for capital and workers with the much bigger Alaska pipeline project, which would entail the construction of a natural-gas pipeline stretching 2,700 km from Prudhoe Bay in northern Alaska into Alberta, along a route about 400 km west of the Mackenzie.

While the Alaska gas-pipeline project would cost US$20 billion and take 10 years to build, much of its northern segment would be laid down along the existing infrastructure serving Alaska’s oil pipeline.

Alaska’s governor has been lobbying hard for his own state’s pipeline project to proceed before the Mackenzie, and the U.S. congress has already approved US$18 billion in loan guarantees.

Realistically, both projects cannot go forward at once, and there’s no rush to proceed with paving the rest of the Mackenzie River highway if the Mackenzie Gas project winds up on the shelf for another decade or two.

While the Mackenzie River pipeline and highway projects won’t directly benefit the mining industry, apart from improving access to the (so far) second-tier Lena West diamond exploration district, they will profoundly affect mining companies who are active in the territory in two ways: miners will find skilled labour even more difficult and expensive to hire; and they’ll be dealing with a newly emboldened territorial government haggling with the federal government to recoup some of the wealth escaping their reach.

Indeed, over the next 30 years, the N.W.T. government forecasts that its oil, gas and diamond developments will generate at least $14.5 billion in government revenue, of which 95% will flow to the federal government under the current bilateral agreements.

Today, a humble N.W.T. government is politely asking the feds for money. If the Mackenzie Valley’s infrastructure is substantially developed in the coming years only to see the benefits flow to southern government coffers, that act will soon wear thin with Northerners.