Minister Ramsay’s speaking notes: Infrastructurally Speaking (Meet the North)

Oct 5 2012

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(click to download slide presentation)

 

First of all I’d like to start by saying how happy I am to be here today and how honoured I am to be speaking during two of the exciting plenary Sessions organized. This Session, Infra-structurally Speaking, investigates infrastructure issues and the second session I will be participating in, Northern Investment Opportunities, focuses on economic development opportunities in the North. As you all are aware, economic development and growth relies on the availability of infrastructure to support it. Nowhere is this truer than in the North. In the North it’s also true that the development of transportation infrastructure is a key to unlocking the vast economic potential of the land.

2 Northern Resource Reserves

Now is a time of great opportunity in our Territory as we welcome new mining, oil and gas developments and a growing manufacturing and industrial base. We have diamond mines both in operation and under construction. We have mineral and base metal development in various stages of construction. We have hydro potential; proven oil and gas reserves and the potential Mackenzie Gas Project. There is enormous growth potential and I’ll expand more upon this tomorrow. Today, I will focus on one of the critical foundations that support this growth, investment in strategic infrastructure. And specifically the strategic transportation corridor planned through the Mackenzie Valley.

As both the Minister of Industry, Tourism and Investment and the Minister of Transportation for the Northwest Territories, I very much appreciate the strong contribution that transportation makes to Northern economic development in every aspect. Transportation has always been at the forefront of enabling Northerners to grow and develop our economy. Never has the role that transportation plays been more important to guaranteeing our future growth and prosperity than it is today.

3 Diamonds

Transportation infrastructure is a fundamental requirement and an enabler of economic development in the Northwest Territories. It allows an economy to begin, grow and prosper through increased access to essential goods and services and to natural resources. Linking communities within a region provides jobs, fosters social development and trade, and allows for the flow of human capital. Infrastructure improvements such as the construction of new roads and rehabilitation efforts across the system stimulate job creation and make our economy more competitive in the long term. Available and reliable modes of transportation attract private investment within an economy, and create the potential for value-added growth. All of these factors have been the driving force toward the development of improved transportation infrastructure in the Northwest Territories.

The Government of the Northwest Territories is committed to improving the lives of Northerners and all Canadians through economic development and strategic infrastructure investments. Today, I’d like to provide you with some details about a few strategic infrastructure projects underway aimed at achieving the North’s full potential.

4 Deh Cho Bridge

The Deh Cho Bridge is about to open. After more than a decade of planning, designing, and building, the dream of crossing the Mackenzie River at Fort Providence on an all-weather road is now just weeks away. The bridge is the largest piece of transportation infrastructure in the NWT and the first to span the kilometer wide Mackenzie River. The historic opening will herald a new era of all-season access connecting the economic potential on the north side of the river, to the south. The bridge is now in the final phase of construction with the paving and railing installation underway and celebration activities being planned.

5 Deh Cho Bridge

The opening of the bridge will eliminate the final bottleneck in the Alberta/Northwest Territories supply chain. Variable and seasonal disruptions in ferry and ice bridge service will soon be a thing of the past. I am very much looking forward to people and goods flowing year round between the Northwest Territories and Alberta.

6 Mackenzie Valley Highway (with map)

Once constructed, the Mackenzie Valley Highway will run all the way from Alberta to Tuktoyaktuk, and will be the first all-weather road to the Arctic Ocean. Edmonton will then not only be the ‘Gateway to the North’ but will become the ‘Canada’s Gateway to the Arctic Coast’.

The Mackenzie Valley all-weather highway project will enable our territory to grow stronger and become more self-sustaining. The highway will strengthen connections between our communities and significantly reduce the cost of doing business in the Mackenzie Valley. It will also facilitate other strategic infrastructure projects, such as the Mackenzie Gas Pipeline and the installation of a fibre optic cable, which will share a common corridor with the highway’s proposed alignment.

7 Oil and Gas

A recent economic analysis concluded the all-weather highway will significantly benefit the energy sector’s corporate financial viability, possibly increasing after-tax cash flows by $1 to $2 billion. The same analysis shows the Mackenzie Gas Project will save more than $1.2 billion over the pipeline’s 45-year operating period by reducing future exploration and development costs.  This highlights the connection between transportation infrastructure development and economic growth.

As to the status of the project, I am pleased to say the Mackenzie Valley Highway is gaining momentum through innovative partnerships with Aboriginal and community governments. On the southern portion of the Mackenzie Valley Highway from Wrigley to the Dempster Highway Project Description Reports to support the Environmental Review process have been completed. The Department will continue using the partnership approach to undertake various studies and further investigations to advance the project.

8 Mackenzie Valley Highway (bridge)

A number of incremental infrastructure improvements have also been made that support the development of the all-weather highway. Thirty five permanent bridges on the Mackenzie Valley Winter Road have successfully extended the operating season and increased the road’s capacity. Partnerships with the oil and gas industry have also helped to extend the operating season.  Funding contributions are used to accelerate and improve the construction standard of winter roads to better support heavy loads associated with drilling equipment.  With an oil and gas boom in the Sahtu Region, every extra day that the winter road is open counts.

The Mackenzie Valley Highway will enhance northern security and sovereignty and improve our ability to adapt to changing climatic conditions. It will support non-renewable resource development and facilitate the diversification of our economy. This highway would serve Northerners and Canadians in many ways. For one thing, it would help to expand resource development along the Mackenzie Valley and in the Beaufort Delta. Year-round highway access to the far northern region of the territory would bolster Canada’s sovereignty, improve the ability to respond to security and emergency situations in that region, support economic and social development for Northerners and improve our capacity to adapt to climate change. Residents along the route will experience better access to essential services, increased mobility, a lower cost of living and increased economic development opportunities.  We are currently discussing these benefits with the federal government and looking for partnership opportunities.

9 Inuvik to Tuktoyaktuk Highway

The most northern section of the Mackenzie Valley Highway, between Inuvik to Tuktoyaktuk is the most advanced in the planning process. In the June 2011 budget, Canada included $150 million over five years for the construction of this all-weather link. The federal government described it as ‘a project of national significance’ recognizing it’s importance to the country’s position on security, sovereignty, and economic development.

An economic analysis from 2010 concluded an all-weather highway between Inuvik and Tuktoyaktuk will impact natural gas field exploration and development by substantially reducing costs relating to drilling and well development in the region.

10 Opportunities

It must also be said, however, that a great deal of planning work is required before starting a project of such magnitude. Although the environmental review process is finally nearing completion, much more planning work still needs to be done. Discussions are underway with Canada toward a draft funding agreement. Discussions are also underway with the Inuvialuit Land Administration to secure land tenure for the highway right-of-way.

11 Inuvik to Tuk Highway (construction photos)

The Environmental Impact Review Board held the final public hearings to examine our plans for the highway in Inuvik and Tuktoyaktuk last week. The final Environmental Review Board report on the project is expected to be released in December. Meeting the review board requisites required a significant amount of work including archaeological, terrain and permafrost assessments, wildlife and vegetation studies, and hydrological assessments for every stream crossings. A major geotechnical program was conducted to confirm the quality, source, and volume of granular material available. Initial estimates indicate we will need 4.5 million cubic metres of granular material to construct the highway. That’s a lot – if we put that amount of gravel into a cube, the cube would be about 50 storeys high. With the Environmental Assessment wrapping up in December, we are hopeful that final project decisions can be made and construction can begin in early 2013.

12 Fiber Optic Link

As part of our interest in diversifying the North’s economy, the Government of the Northwest Territories has been studying the feasibility of constructing a Mackenzie Valley fibre optic link through this strategic transportation corridor. A high-speed fibre optic link from southern Canada through the Mackenzie Valley would support expanded operations at the Inuvik satellite station, providing improved access to even more satellite data. It would also create tremendous benefits for the people of Inuvik and other communities along the route, including improved delivery of education and health and social services and new business opportunities along the Valley.

Studies indicate that a Mackenzie Valley fibre optic link could be built in the space of two years for an approximate cost of $65 million. The GNWT is currently looking at options for financing the project as a public-private partnership.

13 Challenges (climate change and permafrost)

With all the excitement surrounding the development of new strategic corridors such as the Mackenzie Valley Highway corridor, it is important to not lose sight of some of the challenges we are working to address on the existing system. The current highway transportation system is underdeveloped and in some instances only seasonal. This lack of an effective and reliable multi-modal transportation system could eventually discourage investment in future resource development.  In fact, over 90% of respondents in the Fraser Institute’s 2011 Survey of mining companies indicated that the lack of sufficient infrastructure is a deterrent to investing in the Northwest Territories.

The weather conditions of the North, and more recently, climate change have added additional complexity. Warming temperatures and changing precipitation patterns in winter are driving us to find new ways to extend winter road seasons, while the melting permafrost is creating numerous issues on our highways and at our airports. We’ve had to reconstruct and realign roadways to avoid permafrost or other areas that are no longer stable. The added costs of dealing with climate change are significant and we only expect this to grow over time.

 

14 Challenges (ice roads)

Ice and winter roads heavily support oil, gas and mineral exploration and development activity and provide vital transportation and resupply links to many of our remote communities. The climatic changes we are seeing mean that we can no longer accurately predict how long our ice roads can or will stay open. We do know, however, that increasingly variable weather has caused these roads to be more difficult and costly to construct and maintain, even with improved technology and escalated effort. The resource development industry, as well as our communities, needs the stability that improved all-weather roads can provide.

15 Challenges (high cost and dispersed population)

Other primary challenges that we deal with on an ongoing basis are simply project scale, logistics and cost. The North is the only area in Canada in which new roads are being built on land where no development has existed before. This is a great adventure for us, but also requires an innovative approach to both engineering and construction. The geographic expanse that infrastructure needs to cover and the distances that raw materials and construction equipment need to be moved to build and maintain it, can create very expensive operational requirements.

Infrastructure development in the Territory would be impossible without strong partnerships. Partnerships with the Government of Canada on a number of infrastructure funding programs over the last 10 or so years have enabled significant investment in transportation infrastructure: over $330 million through the Canada Strategic Infrastructure Fund and Building Canada Plan alone. The continued availability of programs like these is vital to the NWT’s ability to meet the access needs of both our communities and our economy. These partnerships have helped us to address some of the unique challenges and opportunities of northern transportation.

 

16 Unique Transportation System

 

The northern landscape has geographic features unique to the Northwest Territories:  We have the oldest exposed rock on the entire planet.  It’s so unique that NASA is comparing our geography to what they’re finding on the planet, Mars. In fact it’s so similar that NASA named their Mars landing site after Yellowknife and recently named an ancient stream bed found on the planet after Hotta Lake, which is a good little fishing spot north of Yellowknife.

The challenges in the North especially related to northern transportation infrastructure are also unique. The television programs Ice Road Truckers, Ice Pilots, and Arctic Air are now dominating the cable ratings. These northern ‘realities’ are being widely circulated and capturing interest around the world, as is our resource potential. Perhaps their excitement has been enhanced somewhat by the dramatized and exaggerated footage. Nonetheless, transportation in the North and the opportunities it presents is something everyone should be excited about and I invite everyone here to come see for yourselves.

17 Meet the North

Indeed, northern resources are a driving force behind Canada’s economic future. But to realise the benefits, we have to continue investing in infrastructure. The Government of the Northwest Territories remains committed to our vision of investing in strategic infrastructure to ensure a strong and prosperous future.

Thank you for your time today and for taking an active interest in the infrastructure that will make the Northwest Territories the nation’s centre for economic opportunity and advancement.