Premier McLeod’s speaking notes: Meet the North Premiers’ Luncheon

Oct 4 2012

(Check against delivery)

Thank you. I am pleased to be here today and to see so many people that have an interest in the sustainable economic development of Canada’s north. I would like to thank Conference Chair Bob Gomes, the Edmonton Chamber of Commerce and World Trade Centre Edmonton for bringing us all together to talk about ways we can encourage and support northern economic development.

Everybody in this room knows about the great potential we have in northern Canada. That is why you’re here today. You know that the Northwest Territories is home to world class reserves of oil and gas in the Central Mackenzie, the Mackenzie Delta and the Beaufort Sea. You know about our rich deposits of minerals like gold, tungsten and diamonds. You know about the hydro potential of our many rivers. You know that through development of these resources, the Northwest Territories could help to drive the Canadian economy to new heights, creating prosperity and wealth for our residents and the whole country. The Conference Board of Canada recently reported that Canada’s northern territories will lead the country in economic growth over the next two years. The Northwest Territories’ economy is forecast to grow by more than seven percent in 2012 and 2013 – well above the Canadian average of two percent. With development of the Mackenzie Gas Pipeline, the Conference Board predicts that our GDP will rise to $9.6 billion by 2020.

We have a wealth of mineral potential – gold, diamonds and rare earths. Developing this potential could lead to new mines that will employ hundreds of Northwest Territories residents. Spending on mineral exploration was up by 30 percent last year and is expected to grow again. There are seven projects currently in the works, including Avalon Rare Metals’ Thor Lake project, which is the largest rare earth deposit outside China. Together, these seven projects could attract more than $2 billion in new investment and add over 2000 new jobs in the Northwest Territories.

We export $2 billion in diamonds annually and have seen increased production at Diavik and Snap Lake. With the Gahcho Kue mine on the horizon and global demand for diamonds in China and India strong, we can expect this sector to remain an important part of the Northwest Territories economy.

And of course, there is our oil and gas sector. Approximately 16.2 trillion cubic feet of natural gas and 1.2 billion barrels of oil have already been discovered in our territory. This is only a small part of our estimated potential of 81 trillion cubic feet of natural gas and nearly 7 billion barrels of oil. In addition, there are substantial offshore reserves of oil, natural gas and natural gas liquids. Less than a year ago, the federal government issued 11 exploration licenses in the Sahtu representing $534.2 million in work bids for this world class play. And in 2008 industry committed to spend $1.2 billion to develop three offshore leases in the Beaufort Sea. Subsequent bids expanded this to almost $2 billion in work commitments.

Then there is the Mackenzie Gas Project, a project of national significance that could contribute $68 million to the Northwest Territories economy, $86 billion to the Canadian economy and create over 200,000 person years of employment.

But we are not just about the resource economy in the Northwest Territories any longer. With facilities like the Inuvik Satellite Station, we are positioned to be world leaders in the high-tech business of remote sensing. The partners in the Satellite Station, the Government of Canada, the Canadian Space Agency, the German Aerospace Centre and the Swedish Space Corporation have realized that Inuvik is an ideal location for receiving data from remote sensing satellites in polar orbit. With the construction of a fibre-optic link down the Mackenzie Valley, we could capitalize on that potential. A Mackenzie Valley Fibre-optic link would improve communications infrastructure in communities along its route, allow researchers and scientists to get real-time data from the Satellite Station and position our residents to become active participants in the growing international digital economy.

With our rich store of resources, educated workforce and modern communities, the Northwest Territories is poised for great things. But you all know that we are nowhere near realizing that potential yet. It is our unique Northern irony that we are a territory of tremendous opportunity, but also face tremendous challenges.

The Government of the Northwest Territories has a vision of strong individuals, families and communities sharing the benefits and responsibilities of a unified, environmentally sustainable and prosperous Northwest Territories. We want to see a self-sufficient territory that provides opportunities for all our residents in their communities and regions. We want a territory where people are healthy and educated and free from poverty and addictions. And we want a territory where Northerners make the decisions about the things that affect us, like how we protect our land and develop our resources.

We need to create opportunities for our people to succeed and developing our resources to create a strong, stable and diversified economy is one of the ways we will do that. But we face a huge challenge that became the subject of many of our discussions at Prospects North last year: infrastructure.

Economic and resource development requires infrastructure. We need roads to help us bring our resources to market. We need affordable energy supplies to meet the needs of industry and our residents. We need modern communications infrastructure to connect head offices to regional operations and to give our residents access to the growing digital economy.

Much of our resource development activity depends on ice and winter roads. While the Government of the Northwest Territories has made investments and worked with industry to extend the winter road operating season, lack of transportation access continues to slow the development of our economy. In spite of this, it is clear that our resource industries and communities need the stability provided by all-weather roads.

Meeting these infrastructure needs is not a job for the Government of the Northwest Territories alone; it is simply beyond our fiscal capacity. It is not something that the federal government can do alone. And it is not something that industry can do alone. If we want to realize the North’s potential, we will need to work together.

I know that we all face fiscal challenges and that business, industry and governments at every level have to watch their spending. But we can not watch our spending so closely that we neglect the investment opportunities that are right in front of us. Investments in Canada’s north have the potential to pay huge dividends for all of us. We each have much to gain, we can not just stand on the sidelines looking at each other, hoping somebody else will start making the necessary investments.

The idea of working together to support northern development is nothing new. For years, the government of Canada and industry understood that they needed to invest in the north in order to create benefits for themselves, for Northerners and for Canadians. Let’s look at some examples from our past.

In 1948 the federal government created the Northwest Territories Power Commission as a federal crown corporation. One of its first projects was construction of the Snare Rapids Hydro Facility to help power the town of Yellowknife and Giant Gold Mine. Giant helped provide funding for the transmission line, which both benefited them and the growing community of Yellowknife.

In 1964 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.

In 1965, the federal government helped support 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.

And in 1972, the federal government began construction on the Mackenzie Valley Highway from Fort Simpson to Inuvik. Unfortunately, construction stalled in 1977, just south of Wrigley, which is 1,658 kilometres north of here, but still 2,813 kilometres away from Inuvik in the Mackenzie Delta. Until the highway is completed, the vision of a national highway system that connects all Canadians from sea to sea to sea remains just a vision, not the reality that our residents and all Canadians deserve.

In some ways, that is where the Northwest Territories still is today, stalled just south of Wrigley. This is not to say that our economy has not grown in the 35 years since then. Our economy has developed and expanded and we have prospered. But with the right investments in infrastructure – the Mackenzie Valley Highway, the Mackenzie Gas Pipeline, hydro stations and transmission lines – we could be even more prosperous.

The Prime Minister has said that the North is the future of Canada. I agree. But we need infrastructure to make that future a reality. I would like to say that we are playing catch-up with the rest of Canada when it comes to infrastructure but, unfortunately, that is not the case. We are not even in the catch-up game yet.

Without the right infrastructure, our resources have been stranded for nearly forty years. We can not afford to have them stranded for forty more. Northerners deserve the same standard of living as all Canadians; we should not be penalized for where we live. We need infrastructure if we are going to achieve our goal.

The Government of the Northwest Territories is doing its part. We know that we and our people stand to gain much from northern development and we’re prepared to invest in our future and the future of Canada.

The Deh Cho Bridge is nearing completion and we’re planning an opening for next month. This key piece of public infrastructure will permanently connect the North Slave region to the south, making it easier for goods and people to move back and forth and to resupply the mines north of Yellowknife.

The proposed Mackenzie Valley Highway will strengthen connections between communities and significantly reduce the cost of exploration and development. We have already committed money in the 2012-13 capital budget to fund work on the Inuvik to Tuktoyaktuk portion of the highway, in partnership with the Government of Canada. We have also worked with Aboriginal and community governments to prepare project description reports for the remainder of the highway for submission to regulators.

We are also looking at how we could fund the construction of the Mackenzie Valley Fibre-optic link is another priority of the Government of the Northwest Territories. This project would move Inuvik into the forefront of the remote sensing field and provide economic and business opportunities to our people up and down the Mackenzie Valley. We have been talking with potential investors, including regional Aboriginal governments and are also looking at P3 private sector investments as an option.

And we continue to promote the Northwest Territories abroad. We know that we live in a global economy and that international trade and investment will be a key part of our economic development. I recently returned from China, where Premier Redford and I had the opportunity to take part in a Council of the Federation trade mission.

China is a huge and growing market. Canadian – and northern – energy resources can help to power their growth. We shipped $31 million worth of tungsten to China last year to be used in the manufacture of electronic goods and we can ship more. And China is the world’s leading manufacturer of fur garments, with a great demand for the kind of high-quality wild fur that we support through our Genuine Mackenzie Valley Fur program.

Promoting awareness of the Northwest Territories and its resources was a key goal for us in China. I am pleased to say that there was a lot of interest in our minerals, oil and gas and that Chinese investors wanted to learn more about developing our resources sustainably and responsibly. I saw Northwest Territories furs being used in some of the most fashion forward garments when I toured Beijing Yuanlong Fur Co. Ltd. And we had excellent discussions about how diamonds from the Northwest Territories could meet growing Chinese demand when we met with Chow Tai Fook, the largest jewelry retailer in Hong Kong.

The Northwest Territories is doing its part to support northern economic development through investments in infrastructure and by promoting awareness of northern resources, products and investment opportunities. We need business and industry and we need the federal government to step in and do their part too.

I would like to close by reminding you that social development and economic development go hand-in-hand. We need to create opportunities for our people to succeed and creating a strong, stable and diversified economy is one of the ways we will do that. That will mean development of our natural resources, but it does not mean development at any cost.

We know that development has to be sustainable if it is to support our long-term economic, cultural and social wellbeing. Our government follows a formal Sustainable Development Policy that incorporates this knowledge and reflects our unique Northern traditions and priorities.
How we manage our water resources with Alberta and the other jurisdictions that share the Mackenzie River Basin is an important part of sustainably developing our resources. For the past two years we have been working towards a bilateral transboundary water management agreement that maintains the ecological integrity of the Mackenzie Basin, ensures coordination of water management while respecting the authority of each jurisdiction to manage water resources within their jurisdiction. We look forward to concluding this agreement in early 2013.

We need to get on with the business of developing the north in a responsible, balanced and sustainable way. Northerners know that our economic and social wellbeing depend on it. And we know that sustainable development of our resources will create benefits not just for ourselves, but for yourselves and for the rest of Canada. We are looking for partners who share our goal of sustainable development and who want to help us address the infrastructure challenges that are holding us back. I think those partners are here in this room and I want to encourage you to look north, think outside the box and work with us to come up with innovative approaches to northern development. Thank you and I hope you enjoy the conference.