Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 8 - Evidence, April 2, 2008
OTTAWA, Wednesday, April 2, 2008
The Standing Senate Committee on Transport and Communications met this day at 6:15 p.m. to examine and report on current and potential future containerized freight traffic handled at, and major inbound and outbound markets served by, Canada's Pacific Gateway container ports, east coast container ports and central container ports and current and appropriate future policies relating thereto.
Senator Lise Bacon (Chair) in the chair.
[English]
The Chair: At the end of our meeting, I will ask Senator Mercer to tell us about his trip to Sydney and report on the same.
Today we are following our term of reference: To examine and report on current and potential future containerized freight traffic handled at, and major inbound and outbound markets served by Canada's Pacific gateway container ports, East Coast container ports and Central container ports, as well as current and appropriate future policies relating thereto.
We are pleased to welcome from the Nunavut Tunngavik Incorporated Ms. Monica Ell, Director, Economic and Business Development, Nunavut Tunngavik Inc.; and from the Arctic Gateway Council, Mr. Francis Schiller, Secretary. Welcome to our committee.
Monica Ell, Director, Economic and Business Development, Nunavut Tunngavik Inc.: I would like to thank you for the opportunity to talk with you today. Our president, Paul Kaludjak, was invited to this committee but he was recently re-elected as President of Nunavut Tunngavik Incorporated and they had scheduled a board meeting this week. He is up in Igloolik convening that meeting. On his behalf, I thank you for the opportunity to do this presentation.
My name is Monica Ell and I am here in my capacity as the Director of Economic and Business Development for NTI. I am here with Mr. Schiller in his capacity as Acting Secretary to the Arctic Gateway Council, a new coalition recently formed to promote the Arctic Gateway and Trade Corridor initiative.
We are here to ask for your help. Beginning today, we want you to help us ensure that our Arctic and Northern communities are not written out of Canada's future policies relating to ports and containerized freight.
As a committee, you can begin this process today simply by amending the Orders of Reference for your current study to include a reference to Canada's Arctic coast. As a committee, you can do this in less than 10 minutes with one vote.
I would like to acknowledge my senator, Willie Adams, and I would also like to say I will not pinpoint Senator Mercer on the ports in Halifax as I did in Iqaluit.
First I will begin with a little bit of background about NTI. I have also provided our annual report for your reference so you will have a better understanding of what we are all about.
At NTI, our mission is to foster Inuit economic, social and cultural well-being through the implementation of the Nunavut Land Claims Agreement. We are governed by a board of directors that is directly elected by Inuit in Nunavut. In this process, NTI acts as advocates of Inuit interests, and we are responsible for the management of all Inuit-owned lands in Nunavut. We also provide a number of important programs, including support to Inuit development corporations and community economic development organizations, an elders pension plan and a harvester support program, among others.
As a committee, it is important for you to keep in mind that Nunavut alone accounts for 40 per cent of Canada's coastline.
In Nunavut, our aspirations and desires are not unlike those found amongst most people on Canada's other coastlines, be it Pacific or Atlantic. We want homes for our families, affordable healthy food choices, safe and secure schools for our children, access to health care, recreation facilities, good jobs, training and employment, and travel opportunities. Basically, we want to live happy, healthy and longer lives. These are common aspirations.
However, the current conditions in Nunavut and the challenges that we face every day are very different and unlike those found on any other coast in Canada. Our communities are ``remote'' communities, meaning we have no year- round road access. Everything that comes into our communities has to come in by air or sea. As a consequence, in Nunavut we have the highest cost of living in Canada.
Given the situation, you would think, given the importance of our air and sea links for re-supply, that our facilities would be very efficient across Nunavut, but they are not. Our communities completely lack the basic transportation infrastructure that most communities in the South take for granted. Our transportation costs and consequently the cost of everything that comes into and goes out of our communities are compounded by the fact that our communities lack this basic infrastructure.
In plain terms, the lack of infrastructure capacity in our communities increases our costs and reduces the services available to us. Less capacity equals more costs and fewer services.
Right now, our communities do not have any docking facilities. Marine vessels have to anchor offshore, discharge the cargo — which, by the way, is increasingly containerized — use barges and then drag them up above the high water mark on the beach. This process takes time, increases the likelihood of damage and accidents and ultimately drives up costs.
For example, consider last year when the construction of our new hospital in Iqaluit was delayed for a whole year. Why? Because a large key steel frame was accidently dropped off the barge. Everything had to be delayed until the next shipping season, which was the next summer.
Can you imagine such a delay happening in your communities? How do you factor for the costs of such delays in real terms, in human terms? What current and appropriate future policies can correct this situation? We have to break this cycle. That begins with dealing with our fundamental undercapacity in infrastructure.
This is where you can help us. Amend your current study's terms of reference to include Canada's Arctic. Look at issues we confront everyday. Visit our communities. Talk to our peoples.
In Nunavut, we are not looking for handouts from the federal government. We are not even looking for, as the old cliché goes, a hand-up. What we want is Canada and all it has to offer. That is it. We want the same benefits, opportunities and the capacity that Canada offers, provides for and makes available in its Southern regions to be made available up there in our local communities for the benefit of our peoples across Nunavut.
Another Senate committee recently visited Nunavut to study poverty. I will repeat for you what I said to them: Nunavut is not poor. Our land is rich. Our people are strong. Our communities just need the basic tools that Canada makes available to its communities in the South.
I ask senators to consider how Atlantic Canada would look today if the federal government had not invested in the Port of Halifax or if the federal government had not invested in all of those local small craft harbours.
In Nunavut right now we do not have any ports. There is Nanisivik, but it is so remote no local community will directly benefit. Iqaluit, Bathurst Inlet and Rankin Inlet, these are but a few examples of communities in Nunavut right now that are like Halifax without its ports. It is important to note that it is not a matter of Nunavut needing one port. We need several ports, and every community needs a small craft harbour or a wharf.
Again, Nunavut is approximately one fifth of Canada's land mass and 40 per cent of Canada's total coastline, yet we do not have any ports or wharves. Over 100 vessels were in and around our waters last shipping season. Marine businesses are in our communities, and ships have no place to tie up — they are like ships that pass in the night.
These are the tools our communities need to make our own jobs in tourism, fishing, hunting, harvesting, processing, et cetera. These are the tools we need to take advantage of future opportunities in containerized freight traffic. If you think about it, can we really study the future of containerized freight in Canada without considering the opening of a northwest passage?
In Nunavut, to take advantage of these opportunities, we need the infrastructure. The current socio-economic conditions in Nunavut are complex, but a first critical step is to address the infrastructure undercapacity in our local communities, thereby reducing costs and improving services.
For this we need vision and leadership at the federal level. When it comes to our North, we need nation builders. This includes the vision and commitment to deliver on a plan that will finally connect all Canadians from coast to coast to coast, including Canadians in Arctic communities. This means forging critical new north-south links. Our communities need major significant investments across all modes of transportation, including marine, air, rail and road.
What is required is more than just $26 million a year for the next seven years under the Build Canada fund. Nunavut requires billions of dollars in federal investments in basic infrastructure. Tens of billions of dollars, in fact, are required.
Just like the federal government is required to apply a certain percentage of its surplus to servicing its debt, perhaps a similar program could be put in place to ensure investments in Canada's North.
Our communities, peoples and businesses want to work with the federal government to develop a plan to make these investments happen. For example, we want to work with the federal government to implement an Arctic Gateway and Trade Corridor initiative, connecting our communities to the global supply chain through Canada's major hubs, gateways and corridors. For this to happen, our communities need the infrastructure, just like Canada's Pacific Gateway initiative required significant federal investments in the Ports of Vancouver and Prince Rupert. Our communities need the same; we deserve the same. We were encouraged by recent words from the federal Minister of Transport who confirmed before a committee in the other place that:
We have set aside money to be able to analyze and do the research on the new trends that are coming up. We do want to look at an Arctic gateway, and it will be an overarching strategy that should eventually come up.
We encourage senators to support the minister and recommend, as part of your conclusions, that an Arctic gateway strategy be developed now. Hopefully, $10 million to $20 million can be made available to begin work on the strategy now.
I hope, in the development of Nunavut, people will look back to your committee and its study of containerized freight as the catalyst for change. We hope your committee will go down as the committee that amended your orders of reference to include the Arctic.
We also hope, in your conclusions, that you will recommend that the federal government significantly increase its investments in infrastructure for Nunavut. Our sustainable economic development begins with this.
We have distributed several background documents for the benefit of your committee. Thank you for your time and I welcome any questions.
The Chair: Thank you for an interesting presentation. I would like to know first, what is the relationship between the NTI and the government of Nunavut?
Ms. Ell: The land claims organization was set up back in the day so we could create a Nunavut government. We have articles in our land claims agreement to work collaboratively with the Nunavut government. There are several areas where we share documents and files.
We work quite a bit with the federal government. I do not know what our politician would have said.
The Chair: You work with your own Nunavut government as well.
Ms. Ell: Yes.
Francis Schiller, Secretary, Arctic Gateway Council: If I may supplement Ms. Ell's comment, I believe an overarching responsibility for NTI is to ensure that the commitments made in the Nunavut land claims agreement are delivered by the government of Nunavut. They have an accountability function to ensure those commitments are delivered on behalf of their beneficiaries, the Inuit, under the land claims.
The Chair: How is the NTI funded? Is it public, private or a combination of both?
Ms. Ell: It is sometimes hard to imagine this. People sometimes do not actually know that we are like a private corporation. It is a not-for-profit organization. We were given billions of dollars from the federal government and we actually use the interest from that to sustain our work through the years we will hopefully operate.
The Chair: It is both private and public?
Ms. Ell: We are like a private company. It is a not-for-profit organization that is specifically there for the land claims agreement settled between the federal government and beneficiaries of Nunavut.
The Chair: In your presentation you said Nunavut needs basic tools, such as roads and ports, to ensure its development. Can you describe the status of current infrastructure in Nunavut?
Ms. Ell: If you can imagine, Nunavut has several communities, none of which are connected by roads. We have to visit each other by air and sea only. We have one hospital for all of Nunavut.
The Chair: Let us say in the next decade; is there a plan for roads?
Ms. Ell: There are several plans, but they are mostly plans created by the mining companies, at this time.
The Chair: You also mentioned that Nunavut lacks docking facilities. As an example, can you tell the members of the committee the approximate cost of building a port for Iqaluit?
Ms. Ell: Iqaluit has a strategy for port development. Maybe Mr. Schiller has an idea of the cost for that.
Mr. Schiller: It varies from community to community. I think Iqaluit is looking for $8 million to $12 million or $15 million. The prices vary. There is no standard. This is one of the challenges that the communities in Nunavut face, that the costing initiatives have not been done. This is in part why we are before you today, to encourage senators to recommend that the basic studies done for all other communities be done for the communities in Nunavut. Then the experts can provide that type of information for the necessary decision-making processes.
The Chair: It is difficult to know now.
Mr. Schiller: Exactly.
Ms. Ell: With consultation with the community.
The Chair: What is the mandate of the Arctic Gateway Council?
Mr. Schiller: Right now it is a coalition that has just been established. Its mandate is to try to provide a consensus and recommendations for decision makers on the implementation of a gateway and corridor initiative for the North. It is strictly member -driven. Right now, Nunavut Tunngavik Incorporated is the founding member and we expect more members to come on line shortly.
The Chair: Do you envisage the opening of a Northwest Passage to Nunavut in the future?
Ms. Ell: The Nunavut tourism boards and other agencies have been talking about it. I think International Polar Year was looking into it as well. I am not sure what their findings have been to date.
The Chair: This could also be studied with future funds that may be available?
Ms. Ell: I suppose so.
Senator Oliver: Thank you for your presentation. The key to your presentation, for me, is on page 10 of your report. I am interested in the business case for what you call the ``Arctic Gateway and Trade corridor initiative'' that is ``connecting our communities to the global supply chain through Canada's major hubs, gateways and corridors.'' That is what we learned on the West Coast, in Prince Rupert, Vancouver, in Halifax, the East Coast and so on.
What is your business case? Why would someone go there? When the goods arrive in containers, where would they go? What would the advantage be in having an Arctic gateway trade corridor initiative in Nunavut?
Ms. Ell: To give you an example of what is happening right now, I will turn to the fisheries. When the fish or shrimp or what have you are caught in our waters they have to go to Greenland to dock their ships because there are no ports in our land. Either they have to go to Greenland or they go down to Halifax to off-load.
Senator Oliver: There are no processing plants there?
Ms. Ell: There is a small processing plan in Pangnirtung. Recently there were announcements for developing infrastructure there, which was very good news for Nunavut.
Mr. Schiller: A key point for senators to consider is that there is already containerized freight going into the Arctic. Increasingly, Arctic communities are receiving their resupply from vessels discharging containers. The reality is there is no capacity for these communities to receive this containerized freight.
Senator Oliver: Where are they discharging the containers?
Mr. Schiller: This is something that we hope senators appreciate: There are no ports in Nunavut.
Senator Oliver: Where are they discharging these containers?
Mr. Schiller: What happens is that the vessels have to moor off-shore. They bring their own barges with them, they discharge these containers onto the barges, they push the barges to the beach, drag the containers above the high-water mark, and that is where they are ``destuffed.''
It is understood at the community level that this process is not efficient. I will give you a recent example. A mayor recently said that we have to start to set up docking facilities so it is easy for companies to get in and out quickly. The faster the barges get in and out, the faster we get our items. We have to take some responsibility for that happening. A better port would help the mining companies, the shipping companies, and, most important, the community.
These are not experts in intermodal logistics speaking; they are local representatives who understand from seeing a sealift discharge cargo that what is happening now contributes to inefficiencies at the local level.
I would turn your question around as well. There is an immense under-capacity in infrastructure in the North. The greatest concern is that as Canada rightfully embarks on a gateway and trade corridor initiative, leaving out the North will only increase exponentially the infrastructure deficit that these communities have. I would go further and say, they can tell you down to the hour how much time will be saved on shipping from Prince Rupert to markets in Chicago, but if you ask them what this means in terms of increasingly getting goods to northern communities, whether this helps northern communities, you do not get an answer.
I would turn around the question and ask, what is the business case for Canada not including the Arctic in the gateway and trade corridor initiative? The real question now is whether we study the future of containerized freight traffic in Canada without factoring in our third coastline, when three fourths of our coastline is in the North. I would turn that question around and ask what the business case is for continuing to exclude Arctic communities from these critical trade links being forged.
Senator Oliver: I am not against your proposal. I am just asking questions. You said about 100 vessels went through your waters last year. Have you done any kind of business analysis to determine the economic impact it would have on the communities in Nunavut, if those 100 vessels were to go to ports there?
Mr. Schiller: All of these vessels would be plying the waters because they would have an immediate interest, whether it is resupplying the communities for bulk or dry cargo fuel; they could be fishing vessels. Everyone would have an interest. There are economic interests that are plying the waters; they do not have adequate infrastructure capacity.
Senator Oliver: Is there any economic impact study of those vessels?
Mr. Schiller: I am not sure I could answer that, although we would welcome such a study if it were to be done.
Senator Mercer: It is good to see you again, having just returned from the North myself with the Standing Senate Committee on Agriculture and Forestry in its study of rural poverty. I have a much better appreciation of your presentation having just been there.
When you go to communities such as Rankin Inlet or Iqaluit, you realize they have very good airports. We came in at Rankin Inlet and then went to Iqaluit. You look around and see that the community is thriving, but everything has come in by air or by barge. It is boggles the mind. There are two main things we are looking to the North for — development and to protect our sovereignty in the North. We have nothing there to help them.
When I was in Iqaluit, someone who appeared before the other committee said that there is a port, I think, north of Iqaluit in an old mining community; the mine has now been abandoned.
To put it in context for my colleagues on the committee, if I understand it correctly, there is a wharf that might be useable but there is no community there. That community, if you were to use it, is not connected to any other community, so it is of no use to the rest of the people on Baffin Island. It is isolated because of that.
In your estimation for the entire territory, which is a huge part of our country, how many ports would we need in order to properly service the territory? Would it be one on Baffin Island somewhere and one on the mainland, perhaps Rankin? There are so many islands; I think it is recognized that it is impossible to service all the islands.
Are we talking one, two or three? What is the optimum number?
Mr. Schiller: The government of Nunavut would envision three deep-water facilities, basically in the three regions of Nunavut — on Baffin, the Kitikmeot and in the Kivalliq. They have a few specific communities in mind.
You are right, senator, that it is not economically feasible to provide necessarily a port in every community, but we believe it is feasible to begin the process of providing the breakwaters. There is a spectrum of infrastructure between a breakwater and a deep-water port, such as small craft harbours. The idea is to begin the process.
You noted the airport. Most of the airports in Nunavutwere built by the Americans many years ago, just as a point of interest.
Senator Mercer: That was during the DEW Line. That is important, because we should not take any credit or bows for what we have done because we have not done a heck of a lot there.
There are opportunities here, though, that we need to talk about for the rest of Canada. With the establishment of ports, whether it be one, two or three, there are opportunities from Halifax, Montreal or Quebec City to the North to do the short-sea shipping of containers, because now you have to wait. That makes some sense.
Have there been any studies done on how we would prefabricate a port, not the three major ones but the small craft harbours? Because currently we have a problem with ice in the winter, which causes huge problems with small craft harbours.
Has there been any analysis done by the economic council in Nunavut with respect to what opportunities may arise if we continue to see global warming and the absence of ice at its current level? There was lots of ice when I was there, although we were close to Rankin Inlet and Iqaluit, but if we went out further there was open water, which was still unusual.
Ms. Ell: We welcome a study of sorts. There are opportunities there, if monies were made available to do some sort of a study in a cold climate, although I would like to point out we have been having the same or similar weather as in Manitoba. If there are ports there, and I am sure there must be — Churchill as an example — we have the same weather.
We also have the same sort of tides as the Bay of Fundy. Iqaluit has the second largest tide globally, so there is a similarity there. If it can work in the Bay of Fundy, it can probably work where we are.
Mr. Schiller: There are opportunities in short-sea shipping for servicing and resupply from Montreal, Goose Bay and Churchill, and on the western Arctic side as well. Of course, with global warming there are many references and a lot of talk about the Northwest Passage. It is critical in this process that the local communities themselves be consulted in the discussion on the opening of the Northwest Passage.
We have a number of initiatives and groups looking at it, but it is critical in this process that those communities and the peoples that live on these lands be consulted and participate in these decision processes. We welcome the opportunity for study. Further study is a key theme for us and that is why we are here before you today.
Senator Mercer: With respect to the other potential development, we talked about the potential and the need to service the residents there now, but there are tremendous potentials for minerals and gas and oil. In your presentations to other committees and to governments, and as the Government of Nunavut makes presentations, and as companies come to the territory and are exploring and discovering minerals, gas and oil, et cetera, it would seem to me if we want to exploit the North, the exploitation needs to have an infrastructure that allows us to do that, which is both beneficial for the residents of Nunavut as well as the companies exploiting the minerals and the rest of the country, who benefit by the wealth. The greater the wealth in the North, the less the demand there is for the rest of us to help. I think we should be happy to help, but as the old saying goes, a high tide raises all boats. Has that been part of the program that the Government of Nunavut has been doing?
Mr. Schiller: I would not want to speak for the Government of Nunavut. There is a lot of activity. It is important to keep in mind that often the mining activity is not necessarily located close to the communities. Sometimes the infrastructure investments made specifically for the mining operations are temporary or abandoned after the fact. That brings us back to your reference to Nanisivik as a community where there is a deepwater facility that this government has committed to refurbish. That is positive but at the same time, it is remote and isolated.
However, there are ways the government could be involved — for example, the resupply of Alert. The Government of Canada and the Department of National Defence do not resupply via Nanisivik; they resupply via Greenland. These are the kinds of approaches that can be looked at. If we are going to resupply our installations across the Arctic, perhaps we could have a Canada-first approach, where we make a focus on using the existing communities in our North to resupply our North.
Senator Eyton: Can you help me with NTI? When was it formed, how is it governed and who does it represent in terms of numbers? I am trying to get some sense of the organization you speak for.
Ms. Ell: NTI was created about a decade ago. It is in existence for its beneficiaries, which are the Inuit in Nunavut. Its sole purpose is for the benefit of the Inuit in Nunavut and the land claims agreement. There are more than 30 articles in there that are agreements between the Government of Canada, our organization and the Government of Nunavut. The three parties agreed to work together.
We gave up our rights so that we could do the work on the agreements. It is like a land claim agreement. It is almost like a treaty.
Senator Eyton: NTI came out of the agreements that were made with the Nunavut and federal governments, and it is a practical expression of those agreements. It is the organization representing your community that is trying to give effect to the agreements, is that correct?
Ms. Ell: We are trying to have implementation of the agreements in the land claims. There is still a lot of work to be done.
Senator Eyton: Will there be more agreements?
Ms. Ell: No, there are around 32 articles; it has been 10 years and we still have not implemented all of them. We are trying to implement. We need to work with the governments to implement those articles.
For example, article 24 in the land claim agreement, with which I am familiar, is a preferential agreement for businesses in Nunavut. The Nunavut government has created what is called an ``NNI'' policy, a policy that is like a preferential treatment for businesses that are 51 to 100 per cent owned by Inuit. If they were to get contracts under that policy, they would be given preference so that they could outbid other businesses to get more contracts from the territorial government.
Senator Eyton: How are you governed? I assume there is a governing council.
Ms. Ell: There is a board. As I mentioned, our president was recently elected back into a three-year term. He was elected by all the Inuit of Nunavut. We have other members that are elected by the regional Inuit associations and their presidents sit on our board.
They have an extra member, and our board also has two other members. One is the vice-president of finance and a second vice-president. NTI has three executive members. The other three are presidents of other Inuit organizations from the regions.
Senator Eyton: What is your role?
Ms. Ell: I am in one of the departments run by the organization.
Senator Eyton: I understand something of your composition. How many people can you say you represent?
Ms. Ell: Around 27,000. I am looking at Senator Adams there; he may have the answer.
Senator Adams: It is 29,000.
Mr. Schiller: If I may add to those comments, it is important to appreciate that NTI is really a hybrid organization in that it is unique and has a unique role in the governance of Nunavut. The members of their board are directly elected by all Inuit over the age of 16 in Nunavut. It is very reflective and accountable to their peoples and they are also responsible. They are technically the owners of all Inuit lands covered under the land claim agreement. It is not the Government of Nunavut that owns the lands; it is NTI, which administers on behalf of their peoples.
Senator Eyton: In your remarks, you talked about the need for investment and I do not think anybody here would question that. It is clear that there should be some level of service for the community. It is a relatively small community, but there should be some level of service and it should be something better than offloading a container shipment and putting it on a barge. I am familiar with a number of mining operations in the Arctic, with considerable investment at work, but there is an economic reason for that.
You talked about some billions of dollars, which is a stretch when you are talking about 20,000 or 30,000 people, unless you can tag on some other economic benefits. It seems to me that you have to identify the one or two or three projects that are reasonable and that the government might consider.
If you had your druthers, where would you start?
Mr. Schiller: I think that the first priority would be the formal establishment of a federal Arctic gateway and trade corridor initiative which began the process of looking at how each community across the Arctic can be integrated into the gateways and trade corridors that are currently being currently established. That is the nice thing about the gateway and trade corridor approach: The focus is on all modes of transportation and how they work together.
From the position of seeing how Arctic communities can integrate, we can develop that list of priority infrastructure projects from that point of reference.
Senator Eyton: I can understand transportation but it seems you are really talking about either air lift or by sea.
Mr. Schiller: Also rail and road links, in some cases. There is a strong link once you get into containerized freight, into road and rail links, as well. Also, there is a handling capacity that follows from that.
Senator Eyton: Yes. I find it hard to think that a facility in the far North would be competitive with, say, a Prince Rupert fully geared and running. One is open year round — and that would not be.
Senator Adams: Nunavut had three regions; it was so big. There was the area around Hudson Bay. Ms. Ell was living in Baffin and it was called Baffin region. In the West, it went up to Cambridge Bay and Coppermine. There was one community, Pelly Bay, built by air lift alone. About 10 years ago, the Canadian Coast Guard finally started to go up there to the community. It was built by only air lift — housing and everything — in the 1960s and 1970s. Even now cargo for there has to go up to Nanisivik and cargo coming from that one community has to unload from Nanisivik and other cargo from Montreal. The Coast Guard has to get up there and unload the stuff to go to Pelly Bay. That is where they operate now in one community. You see how much it costs to operate up there in the community.
We are talking about containers. Small organizations and companies usually get containers and have them delivered to the house or the motel, and they pay for it. They cannot afford sea lift. I think that is the system that works right now in Nunavut.
In the meantime, in places like Rankin Inlet, every time sea lift comes in, it is on the radio. People come down to the store to unload the containers and that way you can send it back in the ship that brought it. There is a problem with tides, because there are some very high tides in places like Iqaluit in the last few years. As long as the sea is flat, ships come into the shore as soon as the tide goes out and the trucks back into the ship. They can load cargo from the ship but as soon as there is a tide they cannot get to the ships any more. That is the system right now.
There was a recommendation to Nunavut for some of the harbours up there in the estimates. This year's budget said over $40 million, especially for Baffin and around Rankin Inlet and Hudson Bay. Only one community has received money this year, Pangnirtung. I think it was about $8 million. Sometimes the ship has to go in there and load up the fish they have caught. Last year, they had to take it down to the fish plant. At Pangnirtung, we had 200 tonnes of fish and turbot every year, taken from Cumberland Sound when they fish through the summer to take to the fish plant. After that, the ship next year had to go back again down south.
In the meantime, I think there is a corporation that has been operating for a few years, operating the sea lift up there and things like that. Maybe you can give me some idea about, maybe Ms. Ell understands, what is the split of ownership of those ships between Nunavik and Nunavut. Even other companies will have to have a partnership with them — the sea lift up there in Nunavut — in the future.
Do you have an idea of the percentage split between Nunavik and Nunavut — Nunavik is in Quebec and its Makivik Corporation has a partnership with the Inuit people up there with investments in businesses such as airlines?
Ms. Ell: Mr. Schiller works closely with Nunavut Eastern Arctic Shipping, or NEAS, one of the shipping companies and he could give you a breakdown.
Mr. Schiller: For the benefit of senators I will add that the preference for Inuit ownership, has encouraged traditional shipping companies to partner with Inuit organizations. This has resulted in some historic firsts. For example, in 2000, Nunavut Eastern Arctic Shipping purchased and imported the MV Umiavut which was the first Inuit-owned ice-class vessel in Canadian history. The Inuit partners include Qikiqtaaluk Corporation, Sakku Investments and Makivik. I believe they own 80 or 82 per cent of NEAS and 52 per cent of that vessel. They recently purchased and imported the MV Avataq. I believe they have the same percentage of ownership in that vessel.
The positive aspect of this is that other traditional shipping operators from Montreal and Quebec have partnered with other Inuit groups as well. This is contributing to capacity building and ownership of vital marine infrastructure. Makivik has done great things with First Air, Inuit Air and other airlines, as well as with the cruise tourism business that has been developed there as well.
Senator Adams: We have mostly have two in Rankin: We have one from Montreal and one from Churchill. They had a delayed cargo and coming into Rankin Inlet. Most of them go to Baker Lake. It freezes up and they have to unload everything in Rankin, and use barges and the tug boats, but everything is frozen over and they could not get back to Rankin. That is how the system works up there, especially right now for all the development in Baker Lake.
I do not want to ask too many questions to our witnesses. That is how they operate up there. It is not like in the South. On Pond Inlet, it will be difficult in the future to build a harbour up there and some icebergs come right close to the community sometimes. Some are about the size of Parliament Hill. If you have to build there, you are talking about between $20 million or $30 million for one community. You have to make sure the ice does not break it up.
It takes two days to go from Iqaluit up to Cambridge Bay. You have to go over night to Yellowknife to get to Cambridge. To get to Grise Fiord, we left here at 10 o'clock and we arrived in Resolute Bay at 9 o'clock at night. The next morning it took another hour and a half to get to Grise Fiord. That is how differently they operate in Nunavut.
At one time, the Government of Canada was privatizing all the harbours. Following the signing of the land claim, there was no ability to build harbours. We were soon privatized. We were lucky that Transport Canada built airports in some communities before privatization. It is now administered by NAV Canada like in southern Canada.
Senator Eyton: If you created the company properly with the right ownership, what is the tax benefit?
Mr. Schiller: I am not sure I understand the question.
Senator Eyton: You have an ownership requirement of 51 per cent or better. When you have that kind of ownership, what are the tax consequences?
Mr. Schiller: Not to speak for Ms. Ell, but I think the benefit is that the Government of Nunavut itself rewards Inuit ownership in companies. Under this NNI policy, they give preferential evaluation to Inuit-owned operations. It is a formula that enhances one's competitiveness to be Inuit-owned and operating in Nunavut.
The NNI policy is part of the land claims agreement. There is an overall evaluation in the awarding of contracts. They are weighted separately. It is designed to provide an incentive for non-Inuit companies to partner with local Inuit and this will help build economic capacity locally and contribute to jobs.
Senator Eyton: Is there no tax consequence other than that?
Mr. Schiller: Not to my knowledge.
The Chair: Have you ever met with Department of National Defence officials to discuss the future of Canada's sovereignty in the North?
Ms. Ell: No.
The Chair: Would NTI have enough funds to conduct a study right now and present it to the government with respect to your requests?
Ms. Ell: We do not do programs like that. However, we may be able to access funds through other sources. Or an Arctic Gateway Council might be able to access different funds to do some collecting of data.
The Chair: Would that be easier, if you had your own study to present to the government with your requests?
Mr. Schiller: There have been a number of different transportation strategy documents that have been developed in collaboration and cooperation between the respective governments in Nunavut and the territories. In addition, the Northern territories have acted together through the territorial and provincial organizations.
It is important to remind senators that in fact the federal government was the body that funded the initial work and continues to fund the work for the Pacific Gateway. They are also funding studies for the Atlantic Gateway and the Quebec-Ontario Gateway. It is all justifiable, but we would say, just consider us as well.
The Chair: You want your fair share?
Mr. Schiller: That is right. It is part of Canada's coast.
Senator Tkachuk: You mentioned studies completed by the territorial governments on transportation. Have there been studies completed by the federal government on transportation in the three territories?
Ms. Ell: I am not aware of any.
Senator Tkachuk: That is interesting.
Ms. Ell: If there are, I have not tried to find out about it.
Mr. Schiller: The jurisdiction is fragmented across Indian and Northern Affairs and Transport Canada et cetera. Therefore, it is not clear that there has been a comprehensive Arctic transportation strategy done by the federal government. It is multiple jurisdictions; it is not just the territories. There is Nunavik in northern Quebec and Nunatsiavut in northern Labrador. Canada's Arctic stretches across the three territories and the two provinces.
We would welcome that kind of initiative. It would be great. Even if we could get a consolidation study to get an assessment of all the studies that have been done and aggregate them into an overall report, that would be a positive and constructive first step.
Senator Tkachuk: I agree with you. Discussions have been initiated on the question of Arctic sovereignty. To have sovereignty you have to be able to bring in soldiers and infrastructure, be able to communicate and do many things to protect your sovereignty. That may be something that our committee may want to initiate at some point. It would be interesting stuff.
Mr. Schiller: That is for sure. To go back to the benefits, this could yield long-term returns for Canada and its claims on the North.
Russia has offered to keep the ice cleared in the Northwest Passage for communities in the Arctic. We have foreign countries coming into Northern communities saying we have the capacity to keep these channels clear for you. Yet, we are not finding the same reception on the federal front.
It is not only Russia. A number of other countries are initiating ongoing monitoring capacities in the North. We think the most critical claim for Canada's sovereignty is the people that live and come from these lands. That is who NTI represents, the Inuit of Nunavut.
Senator Tkachuk: Many people would love you if you just warmed up a little.
Mr. Schiller: That may be coming as well.
Senator Johnson: In your strategy, you have asked for tens of billions of dollars. What would your top two or three priorities be to start?
Ms. Ell: I do not think we can say exactly which ones they would be. I think an Arctic Gateway Council would have to convene with stakeholders and start discussions on those very issues. We have to start somewhere.
Mr. Schiller: On Senator Eyton's earlier comment, a starting point would be examining on a community by community basis how the airport links with the marine facility. It may not be a full-fledged harbour. We can begin with clear landing areas on the beach with lighting, fencing for security and a concrete pad. Much of the sea lift activity takes place in the dark. You have all of this cargo on the beach. There is no security.
An incremental approach begins by examining on a community-by-community basis what areas will be reserved for marine initiatives or activities. How do these link to the airport and the community? In most cases there are not any road networks that go between those three critical pieces of infrastructure for these communities.
The first priority would be the studies and bringing in the necessary experts in order to begin the planning process in a collaborative and consultative manner. A learning exercise would be a critical first step.
Senator Adams: I was coming back from Rankin Inlet and we landed in Iqaluit a couple of weeks ago. We did not even see the new aircraft that the government bought for the military. I think it landed in Iqaluit for the first time two weeks ago. They are something like a billion dollar aircraft. Those are very important up there. They could be going to Afghanistan, there could be soldiers and tanks in there and everything.
Ms. Ell: With respect to that, the airbus, one of the largest planes in the world, went to Iqaluit for cold weather testing. Our community has been recognized as an area where they could do cold weather testing, and that is one of the reasons it was there.
The one Senator Adams is talking about was recent. I think they were getting ready to bring supplies further up island.
The Chair: I thank you very much for your presence here. It has been most interesting to all of us. You can see our interest in the North by the questions we asked.
Mr. Schiller: Thank you for your time and consideration, honourable senators.
Senator Mercer: I will try to be brief and give you a quick update on my visit to the Port of Sydney last Friday. Since we were in Halifax as a committee, several things have happened. If you will recall, we did not know what the Atlantic gateway wanted and what the province wanted. Since then, Premier MacDonald has outlined six major things on his shopping list. I must say I agree with most of them. I do not necessarily agree with his priorities.
One of the things on the premier's shopping list that specifically related to the Port of Sydney was the dredging of Sydney Harbour. When we talked to Mr. Wooder, he only represented one group, and that was the people talking about the proposed container pier in Sydney. When I was there and met with all the other components of people in the harbour who do other things, it became apparent that the dredging of Sydney Harbour was more important for other things. The spinoff is that once the dredging is done, the container pier is more viable.
The issue is that there is a logistic stevedoring operation, better known as the international coal terminal in Sydney Harbour, where they import coal for the generation of electricity. There is a problem with the ships coming in. A ship came along side while I was there, by chance. I am sure they did not arrange that for my entertainment. As the ship came along side, it was only 60 per cent full. If it had been able to be 100 per cent full, the Nova Scotia Power Corporation would have bought it, but it was not full because of the depth of Sydney Harbour.
That has another major affect on the economy of Nova Scotia in that much of our electricity in Nova Scotia is generated by coal in Cape Breton. The cost of that coal is very high because of the cost of the shipping, since it is coming in at only 60 per cent of its full capacity. One of the people I met was from the power corporation. If Sydney Harbour were dredged to the proper depth and the ships came in at full capacity, it would help keep the costs of power down across the entire province as an economic benefit.
The second economic benefit is that right next door to the international coal terminal is the Provincial Energy Ventures, who are operators of the Atlantic Canada Bulk Terminal. We have one place importing coal, and the place next door will be exporting coal. We have to do that because the coal that may be mined at the old Donkin mine in Cape Breton has a very high sulphur content so you cannot just burn that. It has to be mixed. There is a market outside of Nova Scotia for that, as we have to import low sulphur coal that would be mixed. The dredging of Sydney Harbour provides an opportunity for that, if the Donkin mine goes ahead, which may or may not happen.
There were also people there from the CBNS railway, which we did not have an opportunity to meet with in Halifax other than we asked numerous questions about the rail bid from Truro to the Strait of Canso for the Melford project and from the Strait of Canso to Sydney for the Sydney project. The interesting thing was that the representative from the railroad indicated to me that the maintenance of the rail bed was in reasonably good shape. If they were to go ahead, there would be maintenance needed, but the maintenance was not extensive. They would need to increase capacity. He assured me the bridge I was concerned about was in good enough shape and maintenance to handle it.
The one thing he added was that from the proposed terminal, there were no level crossings, which removes all kinds of problems, as we saw in Vancouver. We had the Mayor of Delta complaining about the traffic. They would not have that problem. Of course, none of the containers that potentially would come into the Port of Sydney would stay there anyway. They would all be moving out. There were no issues with road traffic. That is another portion of the premier's wish, but that is on the mainland of Nova Scotia.
It was a worthwhile opportunity. It showed me that the potential for the port is greater, but I think the marketing of the dredging should have been built around trying to maintain lower power rates across the province, which Senator Oliver and I pay. I know how much I pay to heat my home by electricity. It would be beneficial to all of us. From a marketing point of view, that might not have been the way I would have presented it, but I have much better perspective. I think there is potential, the same as there is potential in Melford.
On a negative note, the terminal we visited in Halifax has lost a little business. The importer of Caterpillar tractor parts has moved to Norfolk, they say because of problems with the railway. I will personally follow up and talk with some people at CN to see what is going on there. That adds another problem to an already problematic situation. Thank you for allowing me to provide that update.
Senator Eyton: With respect to your comments about Sydney, do you now favour Sydney over Halifax?
Senator Mercer: No. I favour marketing Nova Scotia as a whole. As I told them in Sydney, as we market Nova Scotia to the world as a destination for containers, if we get a customer delivering tomorrow, he must go to Halifax. If we get a customer coming in a couple years, maybe he can go to Melford. A few years after that, maybe they can go to Sydney.
The Chair: Melford before Sydney?
Senator Mercer: I have asked the people of Melford to take me on a tour. I will probably be there in May.
The Chair: You can report to us on that.
Senator Mercer: I will give you a similar report to this when I come back.
Senator Tkachuk: How do you favour the other ports if they pay for themselves?
Senator Mercer: I do not really have a lot to say about Melford because the government involvement, they tell us, is none.
The Chair: Thank you very much.
The committee adjourned.