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The North: Canada's missing link

The road to a richer future is in the North, but does the will exist to fulfil the historic vision?

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The peremptory dismissal of the North as a barren and frigid region unsuitable for economic expansion is as meaningless as similar statements were relative to the expansion westward in the 19th century.

The majority of people in southern Manitoba, as the majority of Canadians generally, fail to appreciate that it is the south that will be the beneficiary of northern development.

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-- Arthur Mauro, commissioner, Royal Commission Inquiry into Northern Transportation, 1969.

 

Would a road and power line from Sundance in northern Manitoba to Rankin Inlet, at a cost of at least $1.7 billion, kick-start economic development in the region?

That's been the dream for the past 50 or so years, and it's a question a task force looking into economic development opportunities in the southwest basin of Hudson Bay is expected to answer later this year.

It's a big, complicated question that needs answering -- and for a whole lot of good reasons.

Shaft of sunlight strikes mountains in Pangnirtung Fiord, Nunavut.

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Shaft of sunlight strikes mountains in Pangnirtung Fiord, Nunavut. (GERALD FLOOD / WINNIPEG FREE PRESS) Photo Store

Travel in the North today is both an expensive and uncertain thing, in part because distances are vast, the climate is difficult and travel options are limited. Shipping can be delayed for weeks by early thaws or late freezes, or by the movement of icebergs and pack ice, as happened in Iqaluit this summer. Blizzards freeze aircraft in -- and out -- of airports for days at a time. Fog is a perennial problem because all Nunavut communities are coastal -- which means, in the fall especially, land and sea temperatures can become wildly out of whack, resulting in fog as thick as proverbial pea soup. Wind can be a curse at any time.

Delay, then, is expected in the North. It compounds staggering costs of living (double the Canadian average), and it plays no favourites.

Even Prime Minister Stephen Harper's closely scripted, massively planned annual tours of the Arctic can go awry. Which is how it came to be that Harper recently spent 24 hours more in Churchill than he intended, with the consequences that Mayor Mike Spence had a lot more casual face time with the PM than he dreamed possible.

And because both he and Harper share an abiding interest in northern development, it wasn't long before they got to talking about Churchill's future, the certainty of which had been shaken when Harper stripped the Canadian Wheat Board of its monopoly to sell western Canadian wheat and barley and to ship sufficient quantities of the commodities north, thus providing life-support to the 80-year-old Port of Churchill.

To be sure, Harper didn't entirely pull that worn rug out from under the port. He created a $25-million fund to subsidize grain shipments through the port for five years. This opened a window for the town and the owner of the port and the railway that links it to Prairie grain elevators, OmniTrax, to come up with a more dynamic business model than simple reliance on the CWB largesse to not only sustain grain elevators at the mouth of the Churchill River, but to diversify and expand their use.

An Inukshuk on the outskirts of Iqaluit overlooks Frobisher Bay.

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An Inukshuk on the outskirts of Iqaluit overlooks Frobisher Bay.

But everyone involved knows that won't be enough.

Churchill has to diversify, Harper told Spence.

I know, he replied, but how?

The exchange between Harper and Spence nicely encapsulates the issues with which Ottawa, Manitoba and Nunavut must grapple if the potential of the North is to be realized -- at last and for the betterment of all.

Transportation north of Sundance and all the way to Alert at the tip of Ellesmere Island in Nunavut -- a distance of more than 3,000 kilometres -- is almost entirely dependent on unreliable and expensive airplanes and container ships. There are no roads linking anywhere to anywhere else. The only operating road in all of Nunavut was built to move processed ore to tidewater. Another road, and a railway, are planned for the same purpose, but they will have zero impact on the transportation needs of the Nunavummiut, who pay astronomical prices for everything delivered by air and sea.

Electricity in many northern Manitoba communities and everywhere in Nunavut is generated by diesel-fueled turbines, which require millions of litres of fuel a year to keep the lights on. It is estimated transportation adds $1 to the cost of each and every one of those litres. It amounts to hundreds of millions of dollars, some of which might be better spent extending Manitoba's power grid into Nunavut.

Add to this the paradox and mystery of climate change. Warming temperatures in the north are paradoxical because they at once signal a global problem and a northern opportunity.

Longer ice-free seasons are in large measure allowing Nunavut to expand commercial fishing into waters that never before had been fished, creating jobs and the promise of more of them. But what if the fishery is less sustainable than it appears?

Nunavut Premier Eva Aariak in her office in Nunavut:

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Nunavut Premier Eva Aariak in her office in Nunavut: "We are Canadians and we have the right to enjoy the same infrastructure and benefits as the rest of Canadians."

Warming and technological advances largely explain the potential of the $4-billion Mary River iron mine development on Baffin Island. That development alone will pay billions of dollars in royalties to the territorial government and employ hundreds, potentially thousands, of Inuit. But the model assumes Arctic ice will be navigable year-round using ice-enforced ore freighters. What if the warming trend is anomalous? Or what if warming accelerates and affects the permafrost that makes gold mining in the Kivalliq region northwest of Churchill possible?

That development, by the way, is expected to create hundreds of jobs in Kivalliq -- and in Manitoba

It is believed global warming could open up resources the Arctic icecap has covered forever. But the very potential, including the possibility a Northwest Passage one day will be open year-round, already is raising issues of sovereignty and international competition -- two problems that could become opportunities across the North, and in particular at Churchill, which has the only deep-water port in the Arctic.

Climate change, in other words, could close as easily as open development potential. And nobody knows with certainty where climate change might lead.

Longer ice-free seasons could be a boon for the Port of Churchill, but not likely until it is determined for certain warming is for the long term, not a blip. Until then, shipping insurers are not likely to change the way they operate, and without the insurance, neither will shipowners.

Meanwhile, despite the crushing costs of living in the North, there is very little employment for a rapidly growing population -- whose average age of is 25!

Northern dependency on federal transfer payments is almost complete -- 92 per cent of Nunavut's $1.4-billion territorial budget, for example, is supplied by Ottawa.

The restored Hudson Bay Company Post in Pangnirtung, Baffin Island, Nunavut.

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The restored Hudson Bay Company Post in Pangnirtung, Baffin Island, Nunavut.

Little wonder Harper wants to see northern leaders succeed at diversifying their economies. Economic growth in the North would be a win for everybody involved.

But all this is known, or should be. With the exception of the paradoxical mysteries of climate change, none of the factors raised above is new -- they've just never been seriously addressed.

Ask Art Mauro, one of Manitoba's wisest and most accomplished business leaders and statesmen.

More than 50 years ago, in 1958, a Boston consulting company advised that Manitoba buy the rail line to the Port of Churchill in order to ensure its continued success. The report had been prepared for the Manitoba Liberal government of Douglas Campbell, but with its defeat earlier in 1958, the report fell in the lap of newly elected Conservative Premier Duff Roblin, a true believer in northern development.

Roblin and Art Mauro, who was then a young lawyer and legal counsel to the province on transportation issues, travelled to Ottawa and met with George Hees, transportation minister in the Diefenbaker Conservative government, which had won election in part by campaigning on a vision of northern development.

As open as Hees seemed to have been to a Manitoba takeover, he told Roblin and Mauro that, regrettably, they had arrived too late -- he had just days earlier transferred ownership the railway to the CNR, which then and after was a reluctant owner and promoter of the line.

Art Mauro has long led the charge for Manitoba to make northern development a top priority.

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Art Mauro has long led the charge for Manitoba to make northern development a top priority.

A decade later, in 1967, Roblin and Mauro teamed up again. Before he resigned as premier, Roblin established a royal commission to look at northern transportation and development and put Mauro in charge as commissioner.

It was Manitoba's centennial year. Roblin thought it only appropriate that the province look to tap northern resources to guarantee its future.

At that time, Churchill had just passed its zenith -- the American and Canadian military were pulling out of Fort Churchill, removing the very foundations of its prosperity and putting its future in grave doubt.

Mauro tabled his report a year later, and it was published in 1969. Among other things, it recommended a road be constructed from Gillam to Churchill at an estimated cost of $15 million.

Whether Manitoba should have bought the Hudson Bay Railway and operated it to maximize northern development, or whether it should have built a road from Gillam to Churchill, the fact is that neither of those initiatives, or a whole range of other visionary recommendations to extend Manitoba's reach into what is the now the Kivalliq region of Nunavut, were undertaken.

Which you might think would have dampened Mauro's conviction that Manitoba's future today lies in the North as surely as was believed when the Golden Boy was placed atop the legislative building holding a torch lighting the way north.

But it didn't. If anything, his convictions have grown stronger.

Last year, he was part of a task force that produced a report for the Business Council of Manitoba that urged the province to help make northern development a "national priority," much like he had done in the '60s.

The report underlined Manitoba government complacency by drawing attention to what others are doing -- Quebec last year unveiled an $80-billion plan to develop its northern resources and British Columbia is extending its electrical grid in support of mining development.

Meanwhile, provinces that are looking north -- and Nunavut itself -- are attracting hundreds of millions of investment in new mineral exploration. The most recent figures show exploration investment in Nunavut is almost triple the amount invested in Manitoba, and Manitoba is sinking fast relative to its competitors in large measure, it is agreed, because Manitoba has not created a process of negotiating resource development with First Nations that inspires the kind of confidence seen in investments in Nunavut.

 

It's no secret Nunavut is looking to Manitoba to become a partner in exploiting the potentials. Manitoba and Nunavut have already undertaken a joint examination of the cost of building a road from Sundance -- the end of the road in Manitoba -- to Rankin Inlet, with links along the way to Churchill, Arviat and Whale Cove in the Kivalliq region on the western coast of Hudson Bay.

With a price tag of $1.4 billion, according to the most recent estimates this year, it is difficult to see how the cost of 1,300 kilometres of roads could be carried by the population base alone -- fewer than 10,000 people.

But there is more to it than that.

What if the road was also the path for a power line? The most recent estimate (1998) of the cost of such a line is pegged at $200 million -- plus or minus zero to 50 per cent. In other words, $200 million to $300 million.

Together, the road and power line would save hundreds of millions of dollars annually in freight and fuel costs.

A spokesman for Agnico-Eagle Mining Co., which operates a multi-billion-dollar gold mine at Baker Lake and has spent about $600 million developing another near Rankin Inlet, where 200 people already are employed, said the company would be most interested in discussing with Manitoba a reliable and less expensive energy option than diesel fuel, but it has never been asked.

Meanwhile, there are 16 other gold projects in the area and a dozen uranium and rare-earth deposits, according to a 2011 Nunavut Department of Minerals and Petroleum report. They all could become more viable if transportation and energy costs could be brought down.

 

No one, of course, is saying Manitoba should somehow do any of this alone. And furthermore, it only makes sense Manitoba's focus doesn't extend past neighbouring Kivalliq, where connections are already well-established, as they are further north with Quebec and Ottawa.

Nunavut Premier Eva Aariak said in an interview at her office in Iqaluit Nunavut very much appreciates the partnerships it has with Manitoba, especially the provision of heath-care services to Kivalliq.

She perked up considerably at the mention of the proposed road and power line.

And, as Mauro observed 50 years earlier, she said the cold, hard reality is that the South must understand it is not being asked to do the North a favour as it is the South that will benefit most from northern development.

Nunavut, for example, imports 210 million litres of fuels for domestic heating, driving, flying and generating electricity -- all of it bought in the South and shipped to the North by southern carriers.

Canada and Nunavut's neighbours need to realize accepting a moral responsibility to assist Canadians living in the Arctic to grow their economy, will benefit them, too -- maybe even more so.

"In the early years, Canada completed itself from East to West."

The East took the responsibility to complete the West, and everybody benefited as a result, she said.

"I strongly believe that the time has come to complete the map. The Inuit have always lived here. But we are Canadians, and we have the right to enjoy the same infrastructure and benefits as the rest of Canadians."

You hear similar arguments everywhere in Nunavut. The territory is too big with a population too small -- 33,000 people in two million square kilometres of territory, or 1.3 people per 100 square kilometre compared to 29 in the rest of Canada -- to achieve self-sufficiency without partners.

And it will be up to governments, especially Ottawa, but with provincial co-operation, to help Nunavut build the infrastructure needed to exploit its untapped resources.

Aariak said she is encouraged by the attention Prime Minister Harper is focusing on the North and the attention it draws to Nunavut's potential.

She said she was most encouraged that he is shifting from military and sovereignty issues to more bread-and-butter talk of infrastructure and development, most recently a government pledge to assist in a $300-million redevelopment of Iqaluit's strained airport.

She indicated she's looking forward to what Manitoba might offer in the way of mutually beneficial partnerships.

You can bet there is considerable anticipation in Sundance, Churchill, Arviat, Whale Cove and Rankin Inlet, too.

gerald.flood@freepress.mb.ca

Republished from the Winnipeg Free Press print edition October 20, 2012 J1

History

Updated on Saturday, October 20, 2012 at 10:32 AM CDT: updates photos and corrects captions

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