Proceedings of the Special Senate Committee on the Arctic
Issue No. 16 - Evidence - October 22, 2018
OTTAWA, Monday, October 22, 2018
The Special Committee on the Arctic met this day at 6:30 p.m. to consider the significant and rapid changes to the Arctic, and impacts on original inhabitants.
Senator Dennis Glen Patterson (Chair) in the chair.
[English]
The Chair: Good evening. Unnusakkut. Welcome to this meeting of the Special Senate Committee on the Arctic. I am Dennis Patterson, representing Nunavut in the Senate. I am privileged to be the chair of this committee. I would now like to ask senators around the table to introduce themselves.
Senator Bovey: Senator Patricia Bovey, Manitoba. I am deputy chair of the Committee on the Arctic.
Senator Dasko: Senator Donna Dasko, Ontario.
Senator Neufeld: Senator Richard Neufeld, British Columbia.
Senator Eaton: Senator Nicky Eaton, Ontario.
Senator Boyer: Senator Yvonne Boyer, Ontario.
Senator Oh: Victor Oh, Ontario.
The Chair: Thank you, colleagues.
Tonight, as part of our study on the significant and rapid changes to the Arctic and impacts on original inhabitants, we continue with two specific topics: economic development and infrastructure.
I am delighted to welcome, on our first panel, the mayor of the City of Iqaluit, Her Worship Madeleine Redfern; welcome. From the Town of Churchill, we have Michael Spence, Mayor; and Cory Young, Executive Director. Thank you very much for joining us. I would invite you each to proceed with your opening statement. You can expect some questions afterwards.
Michael Spence, Mayor, Town of Churchill: Thank you.
I am honoured to address this important special Senate committee. Your topic — significant and rapid changes to the Arctic, and impacts on original inhabitants — is important to all Arctic and sub-Arctic communities, including Churchill, naturally.
We have been part of the emerging federal government Arctic Policy Framework. The first hearing of this initiative was held in our community about a year ago. We are thankful for that.
The community of Churchill has long history of Inuit from the Keewatin, now the Kivalliq region. The Inuit have lived at and near Churchill for thousands of years and continue to do so today. As a sub-Arctic community, this is an important part of our history and Canadian history.
Churchill was part of the Northwest Territories until 1911. Churchill itself was the administrative capital of the Keewatin district of the Northwest Territories until 1970.
Our hospital serves the region and resupply came almost exclusively from Churchill through the Hudson Bay rail line and the port for over 70 years. We have had a long, established relationship that is critically important.
As you are no doubt aware, just a month ago on August 31, the federal government made a major strategic investment of $117 million to facilitate the transfer of ownership of the port and the rail line. Indigenous governments and municipalities along the railway, including Churchill, partnered with the private sector to take over ownership. Repairs to the rail line are in the final stages. We anticipate the first train to arrive in the next couple of weeks.
Our community was a founding member of the Hudson Bay Regional Roundtable and since 2001 we have held roundtable meetings in Manitoba and Nunavut on various joint priority issues and priorities.
One of the top priorities has been the need to replace diesel use in the hamlets. Senator Patterson has been a strong supporter of this project and played a leadership role in the 2017 Senate committee report, Powering Canada’s Territories. Studies to date have found there was a strong case to be made for a power line that could replace the aging diesel plants and could bring renewable energy to the Kivalliq region for the first time ever.
The Kivalliq Inuit Association has taken important steps to advance the project. I note they will be presenting tonight on their plans regarding the proposal. I will let them explain the current status of the project.
We strongly support KIA’s efforts to get the power and fibre optic project built. It is critical.
As the federal government undertakes its efforts to reduce fossil fuels, it is important they recognize the challenges facing the North. Due to the closure of the Hudson Bay railway over the past year, Churchill has had some of the highest gasoline prices in North America, up to $2.34 a litre. The Nunavut government has been forced to subsidize gasoline and diesel fuel for residents and businesses. While we support carbon pricing in principle, it is vital the federal government acknowledge and act to protect northern residents from additional costs.
As members of the committee are aware, Churchill has Canada’s only deep-sea port. With the new ownership group now in charge, we will see significant investments that can vitalize the port and its role in the Arctic.
We believe the port will be competitive with shippers from the East Coast and, more importantly, can provide better service for the residents and businesses in the Arctic.
Along with the only rail line that reaches the Arctic, our marine tank farm and our port, we also have a federally owned airport that has some major assets.
It was built by the military and can handle the largest planes on the planet and currently, it is underutilized. It has enormous potential to serve as a seamless partner with the rail line to ship goods across the North. We will continue discussions with the federal government over expanding the usage of the airport and tying it into the port and rail line as part of the efforts to create a true North gateway.
We will position the airport to take on an expanded mandate to serve the greater needs of the Arctic. We look forward to discussions with leaders and residents of the North regarding the Churchill airport initiative.
We want to partner on further investments linking our airports into the existing infrastructure of our port and rail line. It only makes sense to maximize this infrastructure for the benefit of our northern Arctic communities.
Specifically, we want to see a new strategic investment in the airport, including climate-controlled warehousing; linking the railway tracks directly to the airport; creating an integrated supply chain; and the installation of specialized offloading equipment.
Churchill can play an important role in further reducing food insecurity in the North through investments to bring resupply costs down.
I would be remiss if I did not talk about climate change and how it is affecting our community. Our tourism sector scene has followed our polar bears and belugas at our world-class facilities; the Churchill Northern Studies Centre and the Churchill Marine Observatory will play a critical role in this important area.
In conclusion, I want to thank the committee for inviting me. Your work on this special committee is important for the North. I encourage you to promote your final report widely.
The Chair: Thank you.
Mayor Redfern?
Madeleine Redfern, Mayor, City of Iqaluit: I also want to state for the record that, in addition to being Mayor of Iqaluit, the capital of Nunavut, I am President of the Nunavut Association of Municipalities, which represents all 25 communities. I am also the vice-chair of the Northern and Remote Forum with the Federation of Canadian Municipalities and on their board.
I will try to be concise.
With respect to the Arctic Policy Framework, initially there was no mention of the municipalities, which was, of course, an unfortunate oversight. The municipalities are a key and important stakeholder. We are an order of government, one that is often said to be closest to the people. We also work closely with our territorial, federal and Indigenous communities and organizations.
I’m happy to say things finally changed after much noise was made for over a year. In August 2018, there was finally outreach made to the Federation of Canadian Municipalities, who also advocated on our behalf to ensure our northern municipalities were included.
In September, all three of us northern presidents of our municipal associations were able to provide valuable input, which we hope will make it into the Arctic Policy Framework.
The most important thing is ensuring inclusivity. We often all end up working in our respective spheres. Yet we know we are stronger if we work together and more collaboratively. We need to address the structural barriers that, I think sometimes unintentionally, see us not working as closely as we can and should.
In that process, there was an opportunity to highlight the way we can and should work better together with federal representatives, our territorial or northern provincial governments, municipalities and Indigenous communities.
What we have seen in the last couple of years is the traditional federal-provincial-territorial meetings happen, as well as the federal-Indigenous leadership meetings happening. The municipalities are not part of either of those meetings.
It was explained to me that while the Indigenous organizations or their entities represent the communities, while that is true, they are not municipalities. They are not responsible for the type of services that we provide, which concerns land development, garbage, water, sewer and recreational services. That is provided by us.
The other thing we can recognize is there have not been northern infrastructure strategies. In the key areas regarding energy, and while there has been a recent announcement of northern transportation corridors, that does not extend to the eastern Arctic. Northern telecommunications strategies do not exist. While there is the national housing and homeless strategy, they were done at the regional level. They did not include the municipalities or the municipal association. That is a problem, especially when the Nunavut strategies have recommendations for the municipalities and our association. We need to be part of determining what those recommendations are, especially if we are going to be responsible for implementing them.
Of course, there is the recent announcement between the federal government and Inuit Tapiriit Kanatami regarding tuberculosis. Ideally the regional governments who have the direct responsibility for health could and should have been part of that before the announcement. Now there is the catch up of learning how to implement that work is under way.
Lastly, at the local level there are often capacity issues. Having worked with all levels of government, capacity issues exist at all levels. There is often a high turn over in Ottawa. Ottawa doesn’t always know what our realities are. Sometimes you finally feel that you get someone who understands and then they are moved over into a different portfolio. Ensuring there is stability at all levels of government and in our Indigenous communities. Together we can be stronger, we can be smarter, we can work better and, at the end of the day, there can be better outcomes. Thank you.
The Chair: Thank you.
Mayor Spence you didn’t tell us anything about yourself. How many times have you been mayor? Can you tell us a bit about your background?
Mr. Spence: I will have to do the math on that. I have been mayor since 1995.
The Chair: We will turn to senators for questions.
Senator Bovey: Thank you both for your presentations. Having been to both of your communities, I think I have a bit of a sense of where you are and the time it takes to get there, as well as the isolation. Yet the warmth and depth of the commitment to the community. They are both very special places.
Mayor Spence, you talked about the Arctic gateway and the fact you have three of the key means of transportation: air, rail and sea. We know roads aren’t part of that equation in the North.
In both communities, there are issues with infrastructure in terms of telecommunications and Internet.
Could you expand on those issues, namely the meaning of gateway for you, Mayor Spence, and how you think the air, sea and the railway, now that it is just about fixed, can make those connections and be that gateway to the North?
Mayor Redfern, can you talk about the issues in your community around the lack of fast Internet?
And I will wind up fibre optics.
Mr. Spence: As a community, we have been fortunate with the federal government’s investment in our community with the rail line in 1929, the port in 1931, the U.S. military and then Canada’s investment into the big airport we have. All of this was not only designed for our community. It was designed for our region. It was Canada’s investment in building a stronger Canada.
Back in the day, which also happens today, there was rail, because it was effective in pricing, to the port, or to the community, and then it was airlifted during the winter months. This continues today in some cases. The hospital, we had a Fort Churchill military hospital that served the region of the Keewatin district of the N.W.T. which is now the Kivalliq district of Nunavut. The investment was for our greater region. It was not for Churchill. We just happened to be strategically placed.
Now to try to put together an investment of that sort is billions of dollars. In reaching out to the communities north of us with the Hudson Bay Regional Round table, we come together twice a year to look at synergies. How do we, as a region, effectively provide service so we can be integrated?
In terms of the fibre-optic power line, as part of the Hudson Bay Regional Round table about four or five years ago, our Hudson Bay neighbours, the Arviat and the Killiq area were talking about power. We said, let’s put it together and find the money to do it. We put in 75; they found 75. We did a scoping study of $150 million, as the chair is fully aware. Now KIA is taking and running with it.
Talk about fibre optics and power — reliable power that will power the region. We are excited for them. It is a brighter future. This is what we need to do, right? We need to come together as partners and find synergies in making sure that the right investments are placed. Great future.
Ms. Redfern: To speak on the issue of telecommunications, when people visit our town, the very first thing they are hit with when they get off the plane is the slow, unstable Internet. What you are not hit with as visitors is the bill that comes at the end of every month.
With respect to telecommunications, this is how and why we desperately need to have the right people come in the room and have the conversation.
I was fortunate enough to host such a meeting with Janet King the former president of CanNor. It was done first last January in part because telecommunications advances and projects happen so quickly.
We now see in Quebec the announcement of fibre going up on the east side of Hudson Bay, not as far as Kuujjuaq. Puvirnituq. There is also the fibre that goes from Nuuk down to Newfoundland. For $250,000 there could have been and should have been a branching unit on that. That would have allowed our regions of the southern part of Baffin Island, the northern part of Nunavik, the Nunatsiavut, to connect. It is so costly, you effectively cannot put a branching unit in after it has been built. It is as expensive as a new build. We wasted a key opportunity.
The Iqaluit and the Government of Nunavut are strongly advocating for the construction of a fibre link from Iqaluit to Nuuk at a cost of approximately $80 million. If that $250,000 branching unit was part of the original design and build, we could have reduced that cost to less than half, probably in the $25 to $40 million range.
Even as the Government of Nunavut is doing the geotechnical survey, what I was amazed by when I spoke to their representative recently is when I asked, “Are you sure, are you ensuring there is a branching unit so northern Quebec and Labrador could one day connect?” He said, “We did plan to put a branching unit but to scale it up one day on the East Coast of Baffin. Possibly it would extend one day to the West.”
This is why those inter-regional conversations are so important. They can be so costly.
That is an illustration of bringing home the point about being smarter and more strategic. At the end of the day, it’s what the other Arctic nations are doing. It is what Greenland, Iceland, Scandinavian countries and Alaska are doing. We often think in Canada’s Arctic we are better. It turns out I think we are seriously falling behind.
Senator Bovey: Thank you.
Mr. Spence: I want to make a correction. I think I said $150 million. It was $150,000 for the scoping study.
The Chair: We will note that.
Senator Bovey: I will not ask another question. I want to make a comment. Before I realized how slow the Internet was, I noticed the art. I want to congratulate you and your airport on its wonderful works of art. It is stunning. I have already spoken about them at a national conference a week ago.
Ms. Redfern: Thank you.
Senator Oh: Thank you, panel, for being here. We went to Iqaluit. We missed you. You were down here. This time, we have you here.
My question is for the Mayor of Churchill. You mentioned $117 million to finish the bridge, the rail line and the port, correct?
Mr. Spence: It’s $117 million for the port and the rail line total.
Senator Oh: Is that part of the federal money there?
Mr. Spence: Yes. Those were federal funds.
Senator Oh: How much were federal funds, because part of it was from the Indigenous business consortium, correct?
Mr. Spence: The western diversification.
Senator Oh: Okay, that is it.
The Chair: Did you get your question answered?
Senator Oh: Yes.
Senator Eaton: Thank you very much. Listening to all of you, especially to Ms. Redfern, it reminded me very much when we were up in the Arctic in September. Programs made in the South don’t work for the North. Whenever we visited schools, we kept saying why is this being decided in the South when someone should come up here and see the reality?
That said, is your port being used as much as it could be? In other words, has there been talk of a pipeline going to Churchill and taking Canada’s crude across to Europe or through the Panama Canal to India and China?
Mr. Spence: With the previous ownership group, our port was under utilized. Today, with the new ownership group, we’re looking at different products, naturally. The whole aspect of what it may be is to be determined. It is critical we put together a marketing tool to maximize it.
Senator Eaton: Is it open all year round?
Mr. Spence: It is open now from about mid-June. There are some restrictions at the end of October because of Lloyd’s of London extra premiums. You can utilize that port until sometimes the end of November.
What is really important here is climate change is upon us. The Senate should invite Dr. Dave Barber. He is the expert in climate change with respect to ice. This guy is a leading scientist. He says that within 30 years, we will be ice-free. It’s real. It’s coming. It’s evident. We see it with the extended season. It is a real thing.
Senator Eaton: It surprised me in the Arctic — with all the play of Minister McKenna on lowering our greenhouse gas emissions — that so many tonnes of diesel fuel heat and power the North when we have so many natural resources.
Is that changing? This first step, this hydro station, is very exciting. Will that get up to Baffin Island, for instance?
Mr. Spence: Well, it could. There is the opportunity of putting it into the sea.
Senator Eaton: Is that an argument you use when you talk to the federal government if you are to lower your greenhouse —
Mr. Spence: Well with the scoping study, we looked at just over land from Churchill to points north. I understand there is the opportunity to bury that out at sea as well. Nothing is out.
The Chair: In that connection, Mayor Spence, you lost a summer here this year when there was no ability to transport cargo by rail and by ship into the Kivalliq or elsewhere. Are you expecting to get that business back? Am I correct that suppliers went to Montreal instead of previously having used Churchill?
Mr. Spence: Absolutely. Basically it must have been all of the purchases that went to Montreal through the Quebec connection.
The goal here is naturally to retain that business and draw on it. The Kivalliq communities would be part of the ownership group. It is real regional ownership. There is nothing like this ownership group that has been put together in Canada. It is local, regional ownership with Fairfax-AGT. It is an opportunity to finally ensure reinvestment goes back into the infrastructure. It is all about making sure there are long-term benefits for the region, which is critically important.
The Chair: Can you compete with Montreal?
Mr. Spence: Absolutely. You have to remember there are other times of the year when, for instance, those products would be railed and shipped via air from Churchill to points north.
Senator Boyer: Thank you very much for your presentations. I have a question for Mayor Redfern.
You spoke about the Arctic Policy Framework and the tuberculosis initiative and how the municipalities were left out. What do you think can be put into place so you don’t have to spend all that energy trying to get your voice heard? You took months to get a voice in there. What do you think can be put in place to prevent something like that happening again?
Ms. Redfern: Thank you, senator. I just want to clarify: It was the territorial governments who have the responsibility for health. They were not part of those conversations, and they should have been. With respect to the Arctic Policy Framework, we would hope the framework would facilitate that the federal, the provincial where they exist in the North and portions of the regions, the territorial, municipal and Indigenous governments — or, in our case, organizations — are having meetings on issues together rather than this fractured approach that is happening.
I hope the Arctic Policy Framework will break down some of those structures. That’s not to say we have any interest in taking over anyone’s authority or responsibility. But on a housing issue — for which we at the municipal level, of course, have responsibility, as do the territorial and federal governments, sometimes in different ways — we need to be in those conversations together and developing those strategies together. We will be responsible for implementing those strategies together.
Senator Boyer: Thank you.
Senator Coyle: Apologies for being late. Today is civic elections in Ottawa. My daughter is running for council. You will see me coming in and out quickly. Anyway, I admire the two of you for your service. We’re very sorry we missed you when we were in Iqaluit, but we certainly understand your situation.
Mayor Redfern, I also want to make a brief statement in support of you and some of the issues you have brought to light in other parliamentary committees and also in our media. Please know many of us here are in solidarity with you. You’re not out there alone in the wilderness.
While we visited Iqaluit, we met with the Chamber of Commerce. I was a little taken aback. I probably shouldn’t have been; I probably should have known. I’m from Nova Scotia. I know Dalhousie University has been doing a lot of research in your municipality, and also on Baffin Island, on the issue of climate change. It was the Chamber of Commerce members who brought to our attention a water crisis that nearly occurred this past summer in the city of Iqaluit — which, frankly, I had heard nothing about until we got there — whereby the lake was drying up. The main source of drinking water for the town, and, of course, for tourism, industry and other things we’re talking about here tonight, but for your residents first. This resulted from two things: First, the reduction in precipitation, which had been predicted by scientists in a variety of places, I’m sure, including Dalhousie University; and also the melting of the permafrost, which caused the buckling of the utilidor, which then caused leakage and therefore water loss.
Could you speak to us a little bit about vulnerabilities, both in terms of meeting the basic needs as a people living in your city, but also of the importance of stable water and other such resources as you’re wanting to expand economic development opportunities, tourism and other things?
Ms. Redfern: I’m glad the Chamber of Commerce did such a good job in providing that information to this committee.
First of all, it’s important to note the City of Iqaluit is not the only Nunavut community dealing with water issues. At least half have regular water issues, in part because probably when the federal government was choosing the permanent settlement’s water, expandability for growing populations, transportation and good hunting was not at the forefront in the selection of those communities.
With respect to the water situation we dealt with this summer, you’re absolutely right; it was due to lack of snow and rain. The city chose to be proactive in getting our reservoir filled up from a nearby water source.
This was a perfect example of all orders of government working very closely together. However, what was frustrating was that for over two and a half years I had been lobbying intensively to get climate change mitigation or adaptation funding. In particular, to get flexible couplers. We have been dealing with the change in permafrost for many years. We have regular instances of the pipes breaking in, it turns out, in all seasons. When we had buried our pipes, we thought they were as good as being buried in concrete. The permafrost has been melting and now those pipes are in the active layer. It’s actually the access vaults that move up or down, and the pipes break and disconnect. If we had managed to get some of those climate change funds, we might have not faced as serious a situation as we did this summer.
What was also frustrating was approaching all the different departments to try to get financial assistance. I felt like a ball in a pinball machine, bouncing around from department to department at different levels, trying desperately to figure out, with $2 billion having been announced, where we can get assistance.
In part, I think there are too many programs. The Government of Nunavut staff person, as well as the Yukon association municipalities, had identified 27 or 28 different climate change programs: We’ve got an issue. Here is a fix. Help us figure it out. The programs haven’t been a good fit.
When it came to the water response, at one point I was told that we had missed a deadline. I had to say, “I’m sorry I didn’t plan my climate change emergency better to fit your deadline.”
In the end, it was through Crown-Indigenous Relations and Northern Affairs, which had received only $8 million to help northern Indigenous communities with climate change issues. We were only able to get approximately $480,000 because that’s all they had left.
It’s frustrating when we know the funding is there. It’s equally frustrating that so much of it appears to be focused on reducing greenhouse gas emissions. While laudable in and of itself, many municipalities across the country are dealing with climate change issues, from flooding to forest fires or, in our case, lack of precipitation. It’s been difficult to get any of those funds.
Lastly, there was also $2 billion announced for disaster response, which we found out about, only to be told later there is a minimum of $20 million. Our water response was approximately $3 million before we purchased the reverse osmosis machine.
In good conscience, we can’t make $3 million or $4 million to $20 million.
Small- or medium-sized communities that are not the 22 big cities are going to be left out and struggling to get any of those funds. You have 3,500 municipalities across the country and only 22 of them are the big cities.
Senator Neufeld: Thank you both for some good presentations. Just a little bit on the climate change initiatives of the federal government. I live in northern B.C. When I say I’m from northern British Columbia, most people think I live in Vancouver. I don’t. I live in northern British Columbia. I can relate to your frustration with trying to contact someone to find out what you can get and to deal with things differently where I live in Fort St. John than you do in Vancouver; that’s for sure.
As far as fibre optics are concerned, I just received that this year too. It’s new in a lot of the northern parts of Canada.
At the Energy, the Environment and Natural Resources Committee, I’ve spoken a lot to different departments about knowing climate change is happening; it’s for real. We know it’s taking place. You can think about all the little things you want to 30 years out, but the reality is adaptation today and in the future. I get a starry-eyed look when I talk about adaptation. I can appreciate where you’re coming from. We all have to work on the federal government to look at that and involve the communities in the North in some of those decisions and 28 programs you found. It’s no wonder you can’t get much done at any one of them.
That’s something we have to focus on a bit, chair, when we do our report.
I need a little help from Mayor Spence. You say, as members of the committee are aware, Churchill is Canada’s only deep-water seaport. I’m sorry. I come from B.C. We have a deep-water seaport in Prince Rupert. I’m wondering what the difference is. It’s open year-round.
Mr. Spence: Within the region we have our port situated close to the sixtieth parallel. It’s a facility that naturally has potential for greater use in developing a greater Canada.
Senator Neufeld: I was wondering about it because of the other ports we have in Northern Canada.
Mr. Spence: We’re a country that tends to forget about the North. You see what’s happening in Russia in terms of how they’re developing their north. They’re investing in northern ports. They’re doing an excellent job.
Senator Neufeld: Yes.
Mr. Spence: So more attention.
Senator Neufeld: I’m familiar with that. I know we have to keep the people in the big cities in the southern parts of the provinces happy.
Grain was a big part of Churchill. Do you see that, with the rail now, being fixed up, that it will be something again?
Mr. Spence: It will be one of many products, naturally. It was a staple. As you know, the Canadian Wheat Board is no longer with us. There are other grain companies that are interested, naturally. With other ports owned by the Richardsons or the Cargills of the world, which it’s their product only, they basically dictate what the price is going to be and when you’re going to get your opportunity to ship through there.
This port is going to be an independent port. Naturally, it has to be price-sensitive in terms of the markets and looking at other commodities.
Here is an example: We’ve got a mine about 300 miles south of our community. Their ore, believe it or not, is trucked from Thompson, Manitoba, to the St. Lawrence. We have a problem. That ore needs to be on a train destined for Churchill. I understand Churchill doesn’t operate 12 months out of the year, but those are the things we need to look at.
There is no rocket science to it. You need to sharpen the pencil. There is an opportunity for other products that will go through the port.
Senator Neufeld: You also say that “we want to partner on further investments linking our airport to the existing infrastructure of our port and railway.”
Can you help me with that, dig a little deeper and tell me what that does or what it creates?
Mr. Spence: Again, it goes back to why Churchill was created. It was basically to serve the region. In this case, for instance, it’s costly. Any time you ship anything by air, it’s pretty costly. If you’re trucking and training from, say, Winnipeg, Manitoba, or the Prairie provinces, you’re getting it to the destination, which is Churchill, and then you’re airlifting it. Shorter airlift price points should be reasonable.
It comes back to Nutrition North in terms of how expensive it is. We’re flying some of those products right from Winnipeg, for instance, or from Montreal or Ottawa. That’s the way it is at times.
Senator Neufeld: That’s for Nutrition North.
Mr. Spence: That’s one of them. That’s one of the tools, yes.
Senator Neufeld: I don’t get the link between linking the railroad tracks to the airport. I’m a practical person; so help me here.
Mr. Spence: Rather than handling it a second time from the rail yards or the end terminal at the port in Churchill, the terminus of the rail line at the airport is not that far. The investment isn’t much. It could be a mile, if that.
Senator Dasko: Thank you for both of your presentations.
Mayor Spence, it sounds as if Churchill is about to be transformed or at a tipping point with the rail line established again. I want to ask you about the role of traditional economic activities in the region of Churchill — hunting, fishing. Are those activities going to be replaced by what sounds like a very active vision of resource development in the Churchill area?
Is there still a role for traditional economic activities? Is that less important? On the topic of economic development, you’ve got resource development; it sound very promising. Is tourism going to be rebounding as well with the rail line? Is that an important future industry for Churchill?
Mr. Spence: We have four pillars. We have the port and rail line transportation; we have got science and research; we’ve got the Churchill Health Centre; and then we have tourism. Tourism has really taken off. Not only are we the polar bear capital of the world, but we have so many beluga whales within the estuaries of the Churchill River; Seal River; and Nelson River, within the same region. That will continue to flourish. That is a given.
Railing into Churchill, with the VIA Rail train, is very reasonable. To fly from Winnipeg to Churchill, if you don’t book in advance, is $2,000. That’s a lot money.
In terms of resource development, we lost the fishing opportunity because of the hydro project diverting the Churchill River into the Nelson in the early 1970s. That is gone. We’ve lost that.
Hunting still happens. But the opportunity we look at is a lot more in terms of being a supply chain, those types of things, which we blend with tourism, absolutely. It’s an opportunity.
The fact is, though, it’s the region that benefits. Again, it’s not necessarily Churchill. It’s the region that benefits because the infrastructure was designed for the region.
Senator Dasko: And the province of Manitoba as well.
Mr. Spence: That’s right.
The Chair: Mayor Redfern, I’d like to ask you about energy. Firstly, I believe you have been participating in an advisory group to INAC, I’ll call it, which has now changed form, on exploring alternatives to diesel, and there was a fund. Would you tell us how that’s going?
Second, would you have any comments about hydro potential for your city?
Ms. Redfern: Thank you for the question. The working group that had been set up by the former INAC, unfortunately, has not met since the energy summit in Whitehorse almost a year ago. It was a little disappointing for a couple of reasons. One is it almost only focused on solar and wind. It didn’t look much to other energy sources.
The city of Iqaluit is a capital. While we are one of 25 communities and 25 per cent of the population, we consume approximately 50 per cent of the diesel fuel for the entire territory. The Government of Nunavut spends about $200 million a year on bringing in fossil fuel. Getting Iqaluit off of diesel is not only good for Iqaluit, it would be good for the territorial government and for Canada.
The best option for energy for Iqaluit is hydro or possibly, now that it’s being looked into, SMR, small modular reactors, something that Russia is doing and also industry is looking into in other parts of the Arctic region. The National Research Council has a national working group with representatives of every province and territory from the energy sector that’s part of it. They put out a call for proposals. They received 70. It’s now down to two. That’s now looking at a pilot phase.
In order for our city to function as a proper capital and to grow and develop, we need a stable, affordable energy source. Solar and wind is not going to cut it. Diesel is not sustainable. We are very vulnerable to the price increases. What we really need is to move forward in assessing what those energy options are. Unfortunately, the Qulliq Energy Corporation is tapped out. The Government of Nunavut is tapped out. It has reached its debt cap. Thankfully, it’s going to amend the legislation that may allow for a third party to come in and build some sort of energy fix.
It’s really good news that De Beers has bought the nearby diamond mine. Diamond mining is energy intensive. We have met with them. They want to find an energy solution for their mine. It’s only about a hundred kilometres away. This is exactly where there is an opportunity of partnering with the federal government, municipality, energy corp or third party corporation and the mine. Thank you.
Senator Bovey: Mayor Spence, you talked about the round-table discussions and the regional definition of issues that could and should be worked on in partnership and collectively. I wonder, without wasting a lot of your or your staff’s time, whether some of those initiatives you’ve defined as being critically important for the region could be forwarded to the clerk so they would be on record and help us with our deliberations as we move forward in the study.
Mr. Spence: Yes, we can do that, absolutely.
Senator Bovey: You mentioned Dr. David Barber. He has appeared before this committee. As you know, I had the opportunity to go up to Edmonton in early July when he spoke to a fairly large group of businesses and others. He spoke about opportunities arising from climate change. He was very practical about the negative side — I’m not going to call it the “doom and gloom” — but then he flipped the coin.
I would like you to pick up on that positive opportunity note he left on. You talked about Churchill being a gateway to the Arctic. Tell me about Churchill Port being a gateway internationally.
Mr. Spence: Climate change is before us. It’s pretty evident it will continue, and we will look at it as opportunities. We can’t stop it and we’re not going to, so let’s take on the opportunity of climate change.
We all agree it’s going to be ice free. In our location, it’s going to be within 30 years. It’s really going to open up the North. It’s going to expand opportunity.
But there’s also going to be some challenges as well in terms of oil spills. Actually, the CMO is the facility for that. That facility is not complete yet; it hasn’t been finished yet because of the rail line issue. Next year it should be complete. They will be introducing oil to fresh water and saltwater. There is cleaning that up but also the opportunity to really study what’s out in Hudson Bay because it’s a dark hole.
In our community, in terms of opportunities with research and science, we are looking forward to our students and other students being a part of growing science and having the opportunity to be a part of science research as we go forward.
It’s critically important to watch what’s happening in northern China and Russia and how they’re developing their north. It’s critical we take and benefit from what they’re doing.
All of it, naturally, is watching. It’s critical we reinvest in the North. We’re not going anywhere soon. We’re an integral part of this country. Let’s look at the opportunities and see what they are. Let’s move forward. Places like Churchill, which is an Arctic seaport, will play a role.
I understand Iqaluit is developing its seaport. There are opportunities for all northern communities to prosper through this.
The Chair: That was the Churchill Marine Observatory you were speaking of.
Mayor Spence, I think it has been a couple of years that you’ve been waiting for a solution to the rail problem, if I’m calculating that right. I’m sure it has been a very challenging time. What was some of the fallout that Churchill experienced due to having to wait so long for a solution? Did you lose people?
Mr. Spence: In our school, we lost over 60 students, which works out to about 300 members of our community. It was hard in terms of depopulating. With respect to the cost to bring food in, now we understand in terms of the northern fly-in communities and what they pay. It was very difficult and challenging for families.
Regarding the price of propane and gasoline, like I said, with the subsidy we just received, I think we’re paying $2.11 for a litre of gasoline. I don’t think anyone else pays that in Canada. It was very difficult.
There was a lot of support through Manitobans and through Canadians who shared in helping the Government of Canada in terms of the CRED fund. I think that was upwards of $7 million. You have to remember there were people who were not called back for two years who were working at the port for the rail line. Construction came to a halt. Tourism numbers went down. There was lost employment. Now the community is rebounding and lifting itself. It’s a very strong community. Again, we would not have been able to get through this without the great support of Canadians right across this country.
The Chair: You have a greenhouse in Churchill that I have heard about. Can you tell us how that is going?
Mr. Spence: Yes, the hydroponics grower. It is being managed by the Churchill Northern Studies Centre. They are doing an excellent job. We have vegetables and lettuce every week.
Regarding that grower, for instance, sometimes you have to hit the bottom. That happened in this case. We wouldn’t have that grower if we hadn’t lost the rail line. It is a short-term loss for a bigger gain, I guess. It is doing extremely well. There are other northern communities looking at that model. There are two others throughout the North. It is quite a tool.
The Chair: What is special about this greenhouse?
Mr. Spence: It is not that expensive. It is very easy to grow products. It is simple in terms of ensuring all you need is light and water and an excellent manufacturing growth facility.
The Chair: Thank you. I would like to thank you both very much for your helpful testimony this evening and for coming here to be with us and giving us a real insight into your regions and an important viewpoint of municipalities. Thank you very much.
Colleagues, welcome to the second portion of this meeting on the Arctic. For this second segment, we have another witness talking about the Kivalliq region and more detail on the hydro and fibre-optics project. I am pleased to welcome, I think we can say, on behalf of the Kivalliq Inuit Association, Tom Garrett, Consultant; and from Anbaric Development Partners, Philip Duguay, Vice-President, Canada.
I will mention I did see David Ningeongan, the president of the KIA at breakfast in Iqaluit this morning. He couldn’t be here but was pleased you folks are able to present about your connection with the KIA.
I invite you to proceed with your opening statement.
Tom Garrett, Consultant, Kivalliq Inuit Association: Thank you very much. Good evening, Mr. Chair and committee members. As the chair mentioned, I am here today representing the president of the Kivalliq Inuit Association, or KIA. The president could not be here today as he is in Iqaluit for NTI’s annual general meeting. He very much wanted to be here but he was also just in Ottawa last week appearing before the House of Commons Standing Committee on Indigenous and Northern Affairs. As you know, commuting from Rankin Inlet to Ottawa is not the easiest thing to do continually.
With me today is Philip Duguay, Vice President, Canada, for Anbaric Development Partners, who is also working with the Kivalliq Inuit and will have more to say shortly.
The KIA is pleased that the Senate has undertaken this work. There are many important topics to address for Canada’s Arctic. We will submit to you today the lack of infrastructure is foremost among them.
I have been asked today to address a high-priority project for the Kivalliq Inuit Association, the Kivalliq Hydro-Fibre Link. I know many members of the committee are familiar with the project.
Recently, members of this committee travelled to the Kivalliq to see first-hand the challenges and opportunities of the region. As members are no doubt aware, what often holds the region back the most from economic development opportunities is the lack of basic infrastructure that southern Canadians take for granted.
The lack of broadband affects delivery and opportunities in education and health care.
The lack of roads and proper port facilities affects communities’ ability to share resources or for residents to travel easily to a job.
These are issues faced by all of Nunavut. We have a unique opportunity before us right now in the Kivalliq region that we must capitalize on.
I am going to highlight how this Inuit-led project is advancing with widespread government and private-sector support at a critical time. As committee members saw in part during their tour of the Baker Lake Meadowbank Mine, Nunavut’s largest private-sector employer, Agnico-Eagle Mines has invested more than $2 billion in the region since its arrival.
It is estimated that next year, when the new Whale Tail and Meliadine mine sites come into operation, Agnico will employ over 2,000 people in Nunavut, a third of whom are Inuit. Each year the federal government will receive over $60 million in payroll taxes alone from these new mines.
I mention these mines because it shows that, despite huge costs and lack of basic infrastructure, the region has huge mining and other economic potential. What KIA wants to do now is unlock this potential with renewable, reliable, affordable energy and reliable broadband Internet. The time to do so is now.
As the committee is aware, the seven communities and mines in the Kivalliq region, like all of Nunavut, depend entirely on burning diesel for electricity generation and heating. There is no access to the North American electricity or natural gas grids. There are no roads into the Kivalliq region or, more importantly, connecting its communities.
For a resident of Whale Cove to travel and work at the Meliadine mine, only some 100 kilometres away, involves a 15-minute flight which costs hundreds of dollars instead of $50 in gas for a truck. This is the reality of a lack of infrastructure.
Diesel fuel transported by ship to the region during the summer months leads to environmental problems such as increased shipping, toxic fumes, the risk of ground and water contamination from spills and greenhouse gas emissions.
Many of the diesel plants within the Kivalliq region are operating beyond their life expectancy and need to be replaced. These plants were built and owned by the federal government some 40 years ago and are a federal government legacy for the region.
They have reached their energy capacity. The region is energy insecure. KIA is advancing plans that would see five communities get off diesel power by June of 2024.
The Kivalliq region shares a border with the province of Manitoba which has abundant renewable hydroelectric power. This creates the opportunity to connect the communities and mines in the Kivalliq region to Manitoba and the broader North American energy grid.
This project would link Nunavut to the rest of Canada for the first time through the first land-based link.
The project also includes a plan for a next generation fibre-optic line network. For the first time, the region can have reliable, cost-effective broadband services.
This week, Mary Simon was asked in the media about her recommendations in shaping the federal Arctic Policy Framework. Her response focused on the importance of broadband. She stated:
. . . communities across the Arctic, most of them are very remote, and there’s really no access except by flying into those communities. So I felt that if we had an adequate service, a good Internet system, that we could have tele-health, we could have tele-education and we could have many services provided through a good system that was set up.
Securing fibre-optic broadband as part of this project is critical for the communities.
The Kivalliq Inuit have been working on this project for many years. An engineering scoping study on the project was completed in 2015. It concluded the project could save upwards of $40 million annually in reduced subsidies of diesel power while addressing environmental concerns.
The savings for the mining industry were estimated to be upwards of $60 million annually.
With the pending price on carbon coming into effect soon, these numbers will go up, as does the urgency for a renewable energy solution.
The mining industry needs energy to operate and grow. The project is at a critical stage to ensure that private sector investment into renewable energy will maximize community benefits. The hydro and fibre transmission line will do just that and it is the preferred project for KIA and the Kivalliq communities.
I am pleased to inform the committee today that KIA has also reached an important milestone in their planning process. KIA has launched a partnership with a private sector transmission company, Anbaric Development Partners. Anbaric brings technical experience as a private sector company that has brought two major transmission systems online, both on time and on budget.
Anbaric is backed by the Ontario Teachers’ Pension Plan. This partnership has a view to invest in renewable energy for the benefit of all of Canada. This will allow a federal government contribution to leverage significant private sector capital to complete this project. I will ask Philip Duguay to inform the committee further about Anbaric during the Q and A session.
This is an incredible opportunity for the Inuit of Nunavut. With federal support, KIA will be able to enter into a joint equity partnership and advance this vital infrastructure project. Our engineering and feasibility study planning is rapidly advancing.
This is a nation-building infrastructure project and it has the strong support of the Government of Nunavut; the territorial and national Inuit organizations; NTI and ITK; local leadership within the Kivalliq communities; the Qulliq Energy Corporation which is the territory’s power corps; and the mining sector, including Agnico Eagle mines. The project also has the potential to become a critical component of the new federal Arctic policy framework.
In conclusion, the Kivalliq hydro fibre link project will provide renewable, reliable and affordable energy and true high-speed, affordable Internet. It will be a driver of economic development that will benefit all of Nunavut and Canada.
Most importantly, the project addresses reconciliation between Canada and the Nunavummiut of the Kivalliq region. It is an infrastructure project that creates both economic opportunity and a cleaner environment. That is the type of prosperity that Northerners want. We look forward to furthering our efforts with the federal government to make this a reality.
Thank you for allowing us to address the committee here today. We would be happy to answer any questions.
The Chair: Thank you.
Senator Bovey: Thank you for your presentation. I certainly appreciate the huge amount of work that has gone into the planning of this project and bringing all the partners on-side. The need for fibre-optic broadband was a constant theme as this committee travelled the Arctic last month.
One of my questions is, what kind of timeline will it take to realize the project? I will leave that for you to come back to.
Second, you mentioned the lack of broadband affecting the delivery and opportunities in education and health. I want to dig deeper into education and the training aspect of this.
I was very perturbed to find, in talking to youth when we were in the Arctic, the number of students who came south having got A+ on their Grade 12 graduation report cards only to find themselves lost when they came south for post-secondary education and finding that their math skills were at a Grade 5 level. When you put the lens of no fibre optics and no fast broadband, you can understand why.
What kinds of skills training do you feel are the priorities as this comes into being? What kind of future jobs are there for those young people who get that training?
Mr. Garrett: Maybe I will leave the timeline piece to Philip Duguay to respond to. I will speak briefly to this.
Fundamentally, every time we talk to leadership within the Kivalliq region we hear how vital the fibre-optics piece is when it comes to this project. It’s partially because of the lack of opportunities; it’s partially because, as we heard from the mayor of Iqaluit previously, the cost is tremendous. The broadband satellite currently available is capped. Even if you want to try to download larger files, you simply are not able to.
One of the priorities for KIA, especially as this project advances further, is to do a training review to look at what the current opportunities are to train within the region and maximize benefits as the project advances. Far too often we see it takes major projects so long to get to a point to where it’s finally ready to go and then training is looked at as an afterthought. It is too often a challenge where you miss opportunities because, as the project is now advancing, you are almost in the game too late to start the training. I would say that is one of the highest priorities right now for KIA in terms of training.
In terms of the Meliadine mine and the work that Agnico has been doing, there have been strong breakthroughs on the training side. There are good initial numbers that are resulting in employment for the Inuit. They have not reached the goals and targets that have been set. KIA has worked with the sector to establish benchmarks for Inuit employment. We’re not there at this time.
Philip Duguay, Vice-President, Canada, Anbaric Development Partners: I will add a bit. I’m not a Northerner, but I lived in Yellowknife for a couple of years. I have lived in the North long enough to know I am not a Northerner, but I was there.
When I got back down south and started working for Anbaric, I was put in the special position where I was able to work for a company with institutional investor links. We have a joint venture with Ontario Teachers’ Pension Plan. This joint venture with the teachers allows us to create physical platforms that deliver, in this case, electrons and bits of data. That platform is an integral piece of infrastructure for the region, or will serve as such.
In terms of moving electrons to where they will be consumed, Anbaric has quite a bit of experience in distributed energy works. We are a microgrid and a transmission company. We will be helping the Kivalliq Inuit advance a business case to make large-scale load switching. That is, moving heating from fossil fuel-based to electric-based heating systems. That will improve the business case for the transmission line and help the community decarbonize.
That is an area we will pursue, in a tight time frame, with the Kivalliq Inuit, some training and study dollars from various sources in the Canadian federal government in order to help them take a leadership position in that arena.
On the data and fibre side, I am an electricity guy. That is not necessarily directly in my company’s bailiwick. That being said, I’m a Canadian. These are my fellow countrymen and women. We will be interested to engage with the Kivalliq Inuit Association around ensuring the proper training and utilization of that fibre-optic line occurs.
I lived in West Africa and was a student there on exchange from Dalhousie University when high-speed Internet was introduced to the region. It caused a lot of issues. It does need to be looked at, just as you would look at, when introducing electrons, how they will be used wisely in the community. You will be introducing a new capacity data-wise. That is a good question.
On the timeline, we are at a critical juncture for this project. The prospective anchor customer is Agnico Eagle Mines. We have been exchanging data with them and having a positive collaboration — we as a partnership, the Kivalliq Inuit Association and Anbaric. They have major capital planning decisions they need to make in a tight time frame in order to transition toward greener forms of energy, reduce their exposure to not only the volatility of fossil fuels as a fuel source but also the coming price on carbon.
To serve as an anchor customer, you want to sell them as many electrons as possible over as long a duration as possible in order to help the business case for the line. The target date right now is to bring this project online June 30 of 2024. We believe that is a feasible timeline. We are having a technical conference here in Ottawa this week, with a variety of experts and stakeholders who are involved in the project, in order to refine our understanding of that timeline. I anticipate that we can hit that target.
On top of this, we will be refining the business case for the line. We plan to engage intensively with Canadian government officials, all types of stakeholders and civil society groups over the course of this autumn, leading into Budget 2019.
Senator Bovey: Thank you.
The Chair: In that connection, I will ask you, Mr. Duguay, what is the next step for this project? What is being sought immediately to move this forward?
Mr. Duguay: I realize this is a special committee and that right now you are tackling the topic of infrastructure in the North. That is why we are here today. If I had my ideal time, it would have been three weeks from now, but we would be happy to circle back with the committee members — individually or in any other way we can — in order to get information to you.
In the middle of next month we will have a firm ask of the Government of Canada that will include a capital grant to the Kivalliq Inuit Association so they can be equity partners in the project. That will include some type of backstop of a contract that will be signed between the distributor and the purchaser of power. I’m being intentionally vague here because I don’t want to be too speculative about what kind of contract we arrange. At the end of the day, a credit facility needs to be created in order to finance the project and build the infrastructure, in order to sign the cheques, bring out the construction crews and get moving on this.
The third ask will be of the Canada Infrastructure Bank. That is an institution that can offer debt equity financing at better rates than are conventionally available in the marketplace. We will be engaging with them.
I see those as three areas where we need to engage intently over the following weeks and months.
The Chair: Mayor Spence spoke about a scoping study I am familiar with. What is the next study required to move this along?
Mr. Duguay: We are currently involved in a feasibility process. That’s part of the technical meeting we are having in Ottawa this week. The scoping study was a 2015 document. You could think of that as a pre-feasibility study. Now we need to go through a higher order of analysis, if you will. Over this winter, continuing through next government fiscal year, we will be doing engineering work. That is getting a better handle on technology selection, routing, getting a fixed understanding of the environmental assessment schedule, and mapping out the pathway towards construction.
As you know, this is a build arena that is very challenging. There is a lack of basic infrastructure. We keep coming back to that catchphrase, but you do need to phase building because of the sealift season. You probably need to basically land different supplies in different regions and drop zones in order to make sure you have everything you need when you start stringing wire north.
Senator Eaton: Senator Patterson asked you about the federal government. How big a stake do you need to make this project viable so you can say to Agnico, “We have the money. We’re going.” Are you talking 30 per cent, 50 per cent? What are you talking about in round terms?
Mr. Duguay: The stake for the Kivalliq Inuit?
Senator Eaton: Yes. What is the percentage of equity do you need from the federal government to be able to go to Agnico and say, “Fine, we have got it, let’s go.”
Mr. Duguay: We’ll have a very firm ask of government in three weeks’ time. This is a $1.2 billion project.
Senator Eaton: How much are they putting up, 30 or 40 per cent?
Mr. Duguay: Roughly 30 per cent of that would be the total equity stake, correct.
Senator Eaton: I think it’s very exciting. We have heard for so long Indigenous and Inuit communities have been against resource development. It is very exciting they are part of that.
In your experience in the North in Nunavut and perhaps even in the Northwest Territories or Yukon, are there more Inuit and Indigenous communities who are coming on side now with research development? It’s a shame you’re putting all this wonderful work into building this grid and fibre optics. Do you see taking that further north to Baffin Island or further west to other communities?
Mr. Duguay: This is a transmission backbone for the Kivalliq region. It will be sized appropriately to create spur lines out to new mining developments that would come up over time. We assume in our base case that we’ll have at least one other 15-megawatt load emerging during the project life cycle. I think that’s conservative. I’m not a geologist, but this is supposed to be a region of incredible opportunity from a mining perspective.
Senator Eaton: How far west will that go? Will that go as far west as Yukon? We’ve heard about all the mining possibilities in the Yukon, for instance.
Mr. Duguay: I will separate this project from my role as an ambassador of my company, Anbaric. Anbaric has been in touch with the Yukon Development Corporation, with YUC, with the GNWT. We have made our offer very plain and simple. If you’re trying to build energy infrastructure in Canada and you are looking for a private sector partner that can bring capital and build experience and financial expertise, please contact us.
Senator Eaton: That’s good. So you’ve been to other areas. We heard the Mayor of Iqaluit talk about De Beers opening a diamond mine. Could you take the grid underwater to Baffin Island, for instance?
Mr. Duguay: It’s probably too far from that region to be economically justifiable. My company has built two underwater HVDC projects in the greater New York City area. We’re very familiar with going underwater. As you see on the map there, we’re investigating an underwater route through Hudson Bay. The initial findings we have is it’s technically feasible.
You’re talking about an order of magnitude there that might be out of the money to go all the way to Baffin Island. I would like to talk to Mayor Redfern about in situ energy resources and distributed energy solutions for Iqaluit and that region of Nunavut.
Senator Oh: Part of my question was asked by Senator Eaton. Talking about the underwater submarine, you have a second alternative. Would it be quicker, faster and save more money going by submarine or underwater cable?
Mr. Duguay: We’re going to have a long meeting on Thursday here in Ottawa to discuss that. The Seal River is just south of Arviat. It is an ecologically sensitive area. I’d love to go there. My understanding is in order to expedite the environmental assessment process — and there’s a cost-benefit analysis that needs to happen — that it might be optimal to go underwater from Churchill to the Arviat area.
Senator Oh: That’s still considered not far. I know in Asia they have run the fibre-optic cable even longer.
Mr. Duguay: You’re starting to see fibre optics. We’re mainly talking about high-voltage direct current power cables. You’re seeing in Europe right now lines that run between Norway and Germany. My company right now is in the process of developing several offshore transmission platforms for offshore wind energy off of New York City, Massachusetts and New Jersey.
We assume it’s about a 170-kilometre run through Hudson Bay. That’s technically feasible. We’ve looked at issues that can arise from ice scouring during the break-up season. It appears it’s doable. The main issue is when you drive into the water, so to speak, and when you come out, you need to directionally drill to avoid any kind of sedimentary issues or ice scouring.
Senator Oh: When we were in Baker Lake, we all experienced slow Internet. What is the current average Internet speed in your community or region? Would download and upload speeds of 25 Mbps and 5 Mbps respectively be sufficient to close the gaps in terms of telecommunication infrastructure?
Mr. Garrett: The goal is to ensure that enough of the fibre optics would go up to meet what we all would consider to be appropriate Internet speeds. It certainly would also help meet the CRTC’s minimum download speeds that they have set for Canadians.
One of the other priorities is to ensure that enough glass cables goes up to the region so it could be sent further to support all seven Kivalliq communities. At this stage, we’re talking about running the power line and fibre-optic cable to be able to service five of the seven Kivalliq communities in the region. The hope would be to have the fibre cable for either a future phase, or if enough federal funding was available, to extend it to both Naujaat and Coral Harbour.
Mr. Duguay: This morning I sent that PDF to the president of the Kivalliq Inuit Association in Iqaluit for him to approve it. He couldn’t download it. I had to message my office and say, “Please reduce the size of the PDF.” We understand this is a critical issue for everyone and everything.
Mr. Garrett: It’s very important to bring fibre into this region. It will help the entire territory because it would also open up satellite bandwidth. Right now if the Kivalliq region received fibre-optic cable, it would allow other communities to take up the available satellite bandwidths. It would be very important not just for residents. Residents, businesses and the territory would benefit the most from this. It’s the federal government in terms of health care, in terms of education. At all levels, it would be a huge benefit.
Senator Oh: When we were in Inuvik, their Internet was much faster. Are they fibre optic now?
The Chair: Yes, up to the Mackenzie Valley. The territorial government spent $80 million to build that line.
Senator Neufeld: Thank you for being here. Some of my questions have already been asked. Of the $1.2 billion project, how much of that is the electrical portion? Is it split out? Have you got that number?
Mr. Garrett: It’s a tough question to answer. The easy way to answer it would be to say the vast majority. When you’re building the power line to add, my understanding is there’s already a minimum amount of fibre-optic cable that would go into the line itself. What we would be doing is expanding that. If there was no power line and you had to run fibre-optic cable on its own, it would be a much more expensive project.
Senator Neufeld: The fibre optic are incorporated into the electrical line?
Mr. Garrett: A portion of it is.
Mr. Duguay: Virtually all high-voltage power lines will have fibre-optic running along with it in order to operate.
Senator Neufeld: You said a portion of it. What is a portion of it? You don’t know? Okay.
Mr. Garrett: We can get back to the committee with that answer.
Senator Neufeld: Does Anbaric have any work experience in this kind of terrain, this kind of weather? A lot will be a winter build. I live in the North; I know a little bit about what happens.
Is that something this company has great experience in or not?
Mr. Duguay: It’s something we take into account.
Senator Neufeld: I would think you would, yes.
Mr. Duguay: We’re in infrastructure development partnerships. There are 16 people in my company. We would fit around this table. Our goal is not to grow into a giant company with a glass tower on Bay Street. Our goal is to be a conduit to move Ontario teacher’s capital into green energy infrastructure projects. When we build in northern Manitoba and Nunavut, in this instance, we will go and get the best construction companies in that region. We will go and get the best advice we can get in terms of lawyers, economists, engineers and whatever we need to do. We secure that locally. We’re not going to bring in crews from Massachusetts, where our headquarters is located. We would never boat people up to Nunavut for this type of thing.
We are relying on local expertise and champions. Our business strategy across Canada right now on transmission is to work with Canadian Indigenous entities. In this case, the Kivalliq Inuit have been the chief proponent of this project over 20 years now. They have invited us, Anbaric, to be their partner. We entered into a MOU in July and we will take it from there.
Senator Neufeld: You’ll manage it?
Mr. Duguay: We will co-manage it with the KIA, yes.
Senator Neufeld: You will co-manage the project of $1.2 billion. Can you tell me how far it is from Gillam to the Nunavut border and how far the rest of it is?
Mr. Duguay: From Gillam to the 60th parallel, I believe, is 270 kilometres, something in that range. We’ll have a new map in three weeks. The whole project is about a 950-kilometre run.
Senator Neufeld: The rest would be —
Mr. Duguay: About 600 kilometres if you include where it goes up to Rankin and then banks up to Baker Lake.
Senator Neufeld: You made an estimate here earlier — I think I understood you correctly — that you could have it done and in operation in five-and-a-half years. We have a new assessment process that’s being debated as we speak. We still have one, but there are some changes coming to it.
It’s estimated the time frame could be three to five years to get through that. Even at three years, that gives you two-and-a-half years to build. Is that realistic? Because nothing happens on the ground until you’ve done your environmental assessment. It crosses a border so it’s going to hit the federal environmental assessment.
Mr. Duguay: Thank you for the question. I will ask Tom to speak a little more to this. My understanding is because this corridor has been designated by the Kivalliq Inuit Association and the Dene of northern Manitoba, we should be able to expedite this process. In other words, again, they’ve been working on this project for almost two decades. The first major feasibility study was conducted with support from the Canadian government by Manitoba Hydro in 1999. Electrically speaking, there has been this base case out there for a while.
What is unique is Indigenous Canadians have come together around this hoped-for infrastructure and in a sense have created a landing pad or a runway for us to touch down on.
Senator Neufeld: In the five-and-a-half years you expect from now until it’s in operation, what time frame did you put in there for environmental assessment?
Mr. Duguay: We have an assumption of two-and-a-half years.
Senator Neufeld: Two-and-a-half years for the environmental assessment and the balance?
Mr. Duguay: This assumes we are able to get through the scoping process in the spring and submit next summer.
Senator Neufeld: Thank you.
Senator Dasko: That was exactly my question, on environmental assessment. I think we’re covering all the same territory here. Too bad there won’t be more towers on Bay Street. That’s a joke. I live in Toronto.
You’re pretty confident about the environmental assessment process. It sounds like you don’t have a lot of concerns about the process the federal government is hoping to put in place, which is a new process that is being much debated these days. You’re pretty confident it’s not going to be a barrier to this proposal. I think that’s what you’re saying.
Mr. Duguay: There is a lot of work to be done. We take it very seriously. We’re monitoring the proposed legislation. The feeling is, again, we’re working with the people who have lived on the land for 10,000 years. I have to give a compliment to the Kivalliq Inuit Association: their lands department is second to none. The network of specialists they have, whether you’re talking about monitoring migratory animals like caribou or dealing with permafrost issues, they have all that expertise in-house.
We believe we can be pretty aggressive with that timeline of two-and-a-half years. I’m not supposing it’s going to be a cakewalk. I think it’s very aggressive. Again, we’re going to seek out the best local experts we can find in that region of the world and work with them.
Senator Dasko: You’re seeing it as quite manageable, then?
Mr. Duguay: Yes, at this point.
Senator Dasko: That’s really helpful. You wouldn’t have gotten this far with your project if you were not really confident about getting the federal funding. Can I assume you’re 99 per cent confident you’re going to get it, or something like that?
Mr. Garrett: I think what I would say is right now we’re on two tracks. We’re on a planning stage track where we’re working with the federal government and having discussions with CanNor and other officials within the federal government to advance our planning work.
At the same time, because of some of the timeline issues we’ve touched upon with the largest power user in the region needing to make some operational decisions right now; with the pending price on carbon coming into effect right now; with Inuit leadership behind this project like they have not been before at the territorial level, at all levels; and with the private sector investor prepared to also come to the table right now, we’re on another track of having some very important discussions with the federal government on the larger ask.
Those two pieces have to come together at some point. I think we’ve had excellent discussions with the federal government along the planning track where we are. Right now we’re at a stage where we are engaging on the larger ask for the Kivalliq Inuit Association to be joint equity partners to move this project forward.
The Chair: You mentioned in your presentation the federal infrastructure bank. We haven’t heard too much — maybe I’m ignorant — about that bank being active and initiating projects. Can you tell us about that? Are they constituted? Are you engaged with the federal infrastructure bank? Can you give us some more detail?
Mr. Duguay: We met with the transition team when the bank was being set up. We now are just four months into this MOU partnership between Anbaric and the Kivalliq Inuit Association. Through our investor, Ontario Teachers will be reaching out to the infrastructure bank in the coming weeks.
We have been told they will be a resource for debt equity financing but that they’re also there basically to help. They’re there to move projects along that, but for their services, would probably not get up and take flight. We’ve been advised by the Ministry of Finance that the infrastructure bank will be helping us sharpen our pencils and create a strong financial model for the project. We look forward to seeking their advice and services.
The Chair: What about Manitoba Hydro?
Mr. Duguay: Manitoba Hydro is going to benefit from having access to a new market, and ostensibly because of the geography, they will have access to the market for a very long time. They would be the supplier. They would have to set up some kind of power sales agreement with the special purpose vehicle corporation we would set up with the Kivalliq Inuit.
Again, the technical base case is there. We have consultants working for us who come straight out of Manitoba Hydro and have been there for decades. We’re pretty sure of our departure point in Manitoba, how we’re going to build out that infrastructure.
The Government of Manitoba is supportive of this development process. They have asked the partnership to come to Ottawa and find out what the federal government thinks of it and to see if there is an investment case to be made by the federal government again to help the Kivalliq Inuit to become equity partners for us to continue on an exploratory process with both Manitoba Hydro and the Government of Manitoba.
The Chair: You have had experience with other projects in high-density areas. What is the challenge here with this region? I should know the population, but it’s probably in the 7,000 to 10,000 range.
Mr. Duguay: Ten thousand.
The Chair: Are those ratepayers going to have to bear the burden of paying for this infrastructure, or how would that work?
Mr. Duguay: With a capital grant for the Kivalliq Inuit to be co-equity partners with Anbaric or Ontario Teachers, we anticipate a dramatic decrease in the cost of production of electricity for the region. There will be a cost savings there. That may not be immediately reflected in the rate structure for the territory for a variety of reasons. Again, there are major infrastructure requirements for Qulliq, the Crown distributor. I can’t speak to that; I’m not a rate regulator in Nunavut.
This being said, you’re talking about displacing the use of approximately $40 million a year of diesel for residential and light commercial use. In the mining sector you could see a savings of $60 million a year. Again, that assumes we have growth in the mining sector in the region, one other mine coming on in the life cycle of the project. The economics look very good as long as we have a robust mining sector in the region.
The Chair: Agnico Eagle has forecast at the end of the five years, carbon pricing, based on the announced prices per tonne, will cost them $50 million a year annually on top of that. That is another potential saving.
Senator Boyer: I have a question about health care. I see health care in the North is going to greatly benefit from a project like this. I know you’re in the planning stages right now. I’m wondering if you can expand a little bit on what you envision to address some of the issues in the North in the health care area. Have you been working with FNIIP on these planning stages?
Mr. Garrett: We have not at this time. I’m not sure I’m in a position to answer that at this time. It is something we would be happy to provide an answer to the committee on.
Senator Boyer: Thank you.
Mr. Duguay: We’re in this very unique position as a company where we’re building a physical platform to move data and electrons north. We happen to be specialists on electricity. We will have something to say about how those electrons get used. We’ll have a responsibility as a company to make sure there is dialogue around how this data is used and that it’s maximized for locals. These questions have been making me dream about the possibility of getting into some very interesting training and planning. It’s a very good question.
Mr. Garrett: One of the reasons the Kivalliq Inuit Association prefers this project is it unlocks the potential for a whole lot of new investments into the region in a whole number of different sectors.
The backbone of putting in the transmission line takes the region to a place where it becomes so much more energy secure. We’re seeing the greening of things like electric vehicles, electric snowmobiles and electric ATVs. These are all possibilities for the future for these communities. Currently, they are so energy secure they’re at a capacity limit as to how they can look to develop and grow their regions. That is why this project is so important to them.
The Chair: Thank you. There has been talk of a road link to Kivalliq from Southern Canada. Has that come up in your discussions? You’ll be building a corridor. Is there some talk about that maybe leading also to a road eventually?
Mr. Garrett: This project, as we’ve mentioned, has been around for a long time. Through the planning process of how the Kivalliq have advanced this project, they have identified a corridor that would allow both an all-season road and a power line to move forward. It’s been part of their planning process going back to when they selected lands as part of the Nunavut agreement. That is there.
How they’ve looked at advancing the project at this stage is, rather than trying to advance both projects all as once as one project, to advance the hydro and fibre-optic line project and to look also at advancing access roads connecting their communities.
As I mentioned, Whale Cove is only 70 kilometres south of Rankin Inlet. Actually, Chesterfield is 70 kilometres north.
Right now if somebody wants to work at the Meliadine mine, which is just north of Rankin, they have to fly south to Rankin Inlet and then drive on Agnico’s private road 30 kilometres back towards their community to go work at the mine. It’s a situation whereby the lack of infrastructure hampers how communities and families can travel to work.
The Chair: Thank you very much.
On that note, we will conclude. I thank you very much for your testimony and answers to our questions, which is much appreciated on behalf of the committee.
(The committee adjourned.)