Fortune Tellers - Nunavut...
Peter Taptuna, Nunavut premier
Back to schools
You know all about the high food prices, the housing crisis and dearth of transportation and telecommunications infrastructure. But the picture is getting rosier in Nunavut, and what’s happening now could pay huge dividends for the territory in 10 years. Despite hiccups at Baffinland’s Mary River mine on northern Baffin island due to plan changes and low iron ore prices, and a looming production gap for Agnico Eagle at the end of its Meadowbank gold mine, the territory may soon find itself with the dream scenario of an operating mine in each of its three regions. TMAC Resources Inc.’s Hope Bay gold project is surging ahead in the Kitikmeot, and Agnico’s promising results at both the Meliadine and Amaruq projects in the Kivalliq mean Nunavut could be set employment-wise for the next decade and more.
But to truly capitalize, it’s got to be about more than just jobs for jobs’ sake. “As a government, we’d like to see more professional posts come out of this,” says Premier Peter Taptuna. And the $255 million-plus Ottawa agreed to pay to Nunavut Tunngavik Inc. in response to a lawsuit claiming the feds weren’t living up to its land claim obligations means there’s a lot of money now available for training programs.
Yet with fortune smiling on the territory’s resource sector, much still needs to be done to catch Nunavut up to the rest of Canada. Power plants need replacing, ports and more housing need to be built, and telecommunications networks need big-time upgrades. “We continue to lobby for more infrastructure because, you know, Nunavut is one-fifth the size of Canada when it comes to land mass,” says Taptuna. “We want to find a way to make sure that we attract investors into Nunavut, and I’ve been saying that Nunavut—the Arctic—is the most expensive place to do business, or even have any kind of industry working up here.”
"Although Canada is considered a developed country, we have a region in Canada called Nunavut that's underdeveloped, so we're hoping that we can continue to work with the federal government to access some of this money when it comes to adaptation and mitigation of climate change. The biggest impact is in the Arctic. And Nunavut is, of course, the Arctic of Canada."
In 10 years, Taptuna hopes to see a deep-sea port in Iqaluit, hydro facilities powering each of the three regional centres, and even fibre optic connections introduced into the territory. Reducing the cost of living and improving the quality of life would not only help retain Nunavummiut, but also make Nunavut a more attractive destination for Canadian jobseekers and for potential investors.
It would also help grow its burgeoning fisheries and its arts and crafts sector—and, most significantly, tourism. The territory is home to some of the most striking landscapes and unique and interesting lifestyles and traditions in the country, but high prices are a gigantic barrier to visitors. “Canada is the most expensive place for tourists to get to, and Canada’s North is 10 times that,” laments Taptuna. “So we struggle with our situation up here when it comes to tourism or, for that matter, when it comes to investing in any type of activity in Nunavut.” Yet more activity in regional centres—with more people moving in and out due to a booming mining sector—has the potential to attract new players into the airline markets, which could push fares down and make a trip North easier on the bank account.
Another area for growth is in research science: the $142-million Canadian High Arctic Research Station in Cambridge Bay is set to open next year. “We’re hoping that most of our young people in Nunavut would, in 10 years’ time, be the scientists running the operations there and doing all that work for Nunavut.”
The next 10 years could be transformative for Nunavut—if it can leverage its mineral wealth, get some help from the feds and make good on its promise to support and educate Nunavummiut.
Madeleine Redfern, mayor of Iqaluit
With our powers combined...
In Nunavut, distances are vast. Populations are small and spread out. But for a territory of 37,000 or so residents, the number of government (municipal, territorial, Inuit) and quasi-government agencies can be, frankly, overwhelming. With so many overlapping and competing organizations receiving most of their money from the feds, that means a lot of money gets split a lot of different ways. There’s a better way to do this, reckons Madeleine Redfern, who was re-elected as mayor of Iqaluit after a three-year hiatus.
“If the different levels of government and Inuit organizations and corporations can work more strategically together, I can see an awful lot of really important basic work is going to get done,” she says. And what is that important, basic work that needs doing? Well, where do you want to start?
Many of Nunavut’s diesel power plants have blown past their life expectancy. Its telecommunications network is prone to disruptions, plagued by unreliability, and is slow to begin with. The well-documented housing shortage is territory-wide, and the symptoms of overcrowding and homelessness have untold social, health, and educational consequences. Redfern thinks if organizations can pool their funds and combine their lobbying powers, their cases will be stronger when they approach the feds for help. And hopefully this collaboration will let Nunavummiut decide which projects get done first—and how.
“We’ve seen large infrastructure projects that have happened by a different level of government, which have not been the priority of the local government. Moving away from what sometimes people term as the political pet projects—and that’s not to say that there hasn’t been value in some of those projects, but have they necessarily been the ones that were most needed?” Redfern likes that the new Liberal government appears to want to listen to locals when assessing priorities. Now the question that needs asking, she says, is, “How can we align ourselves to be a lot more strategic?”
“We’ve seen large infrastructure projects that have happened by a different level of government, which have not been the priority of the local government. Moving away from what sometimes people term as the political pet projects—and that’s not to say that there hasn’t been value in some of those projects, but have they necessarily been the ones that were most needed?”
In her own city of Iqaluit, the population has been growing at a rate of nearly 1,000 residents every three years. That exasperates already pressing issues such as housing. “There have not been any new lots that were surveyed or offered in the community since I was mayor,” she says. “And I left in 2012.”
So the newly elected Iqaluit council is ironing out priorities for not only its own term in office, but also up to 12 years down the road. Big projects—the water-sewage system, housing—“haven’t been able to be addressed in a single election term,” says Redfern.
While it’s still early, the federal government committed to a port in Iqaluit, and that’s a biggie. Due to ice conditions, this year’s first sealift into Iqaluit was delayed five weeks. Then, it unloaded in typically (painstakingly) slow fashion: a tugged barge, loaded with shipping containers, beached on shore and was offloaded with a loader. Every day a ship sits in Frobisher Bay unable to unload its cargo, it costs the shipping company $70,000, says Redfern.
A port lessens shipping costs for Iqalungmiut, businesses and governments, and because capital cities also have a big responsibility to provide services for the rest of the territory—it’s home to Nunavut’s main hospital, courthouse, jail—that spreads the benefits even more.
In 10 years, Redfern hopes that infrastructure projects prioritized by Nunavummiut—and funded and supported via the collective will of all levels of governments, and the land claim organization—will start to make Nunavut more competitive nationally. “It’s exciting when you think about being an equal competitor.”
Dennis Patterson, senator of Nunavut
The less government, the better
Nunavut doesn’t need to diversify from mining just yet. In fact, a vibrant mining sector, envisions Senator Dennis Patterson, “will diversify the Nunavut economy away from the government public sector economy.” From there, it’s a step-by-step process, he reasons. The mining sector attracts investment along with permanent residents who are independent of government. They start to build and support businesses, and present more long-term career opportunities for generations of Nunavummiut. “But all the job growth in the world is not going to guarantee employment of Nunavummiut in those good-paying jobs if we don’t improve our capacity through education,” he says.
Even as the territory is poised for a mine in each of its regions, Patterson says there’s more that can be done now to encourage exploration and make some current projects more viable.
In the Baffin region, for instance, an Iqaluit hydro project shows great potential. “Imagine what it would do to energy costs in Nunavut if you could take Iqaluit off diesel fuel? It burns a third of the energy in Nunavut,” he says. “This is a great infrastructure investment for a federal government now committed to alternate energy.” It could also link up to Peregrine Diamonds’s developing Chidliak diamond project north of the city.
“All the job growth in the world is not going to guarantee employment of Nunavummiut in those good-paying jobs if we don’t improve our capacity through education.”
Over in the Kivalliq region, Patterson says a transmission line should be built up from Northern Manitoba to connect diesel-dependent Nunavut communities as well as current—and future—mines to the southern power grid. “You’d have a huge spinoff to communities in lowering the cost of living in the region,” he says, “and you’d have a catalyst for further economic growth and job creation in making Kivalliq mines more economically feasible.”
Finally, in the Kitikmeot, there’s the Grays Bay port and all-season road, which Patterson says has been co-endorsed by both Bob McLeod and Peter Taptuna in Ottawa. It would run south from a natural port at Grays Bay, on the Arctic coast east of Kugluktuk, through some mining projects like MMG’s Izok Lake and High Lake. It would even connect to the end of the NWT’s winter road to the diamond mines and provide alternate access from the Grays Bay port if the NWT ice road season is cut short.
As Nunavut opens up to mining, Patterson cautions against limiting too much land from development. “I think we need to make sure that in the coming decade, there is a balanced debate, where the viewpoints of industry, the chambers of commerce, and small business are also heard amidst the strong voices propelled by the southern and foreign-funded organizations on the side of turning the territories into one great big national park,” he says. “We have a greater concern and stake, as wildlife harvesters and as small business, than those from outside who would attempt to influence what we’re doing.”
Three easy steps to revive the Northern mining industry:
Fact: it costs more to find, build, and operate a mine in Canada’s North than it does in the south. How much more? Well, according to a report—Levelling the Playing Field—released last spring by the territorial mining chambers and two national mining associations, it costs more than twice as much to do exploration work in the remote North, and roughly twice as much to build a gold mine—and more than that to build a bulk metal mine. Once a mine is finally up and running, operating costs are 30 to 60 percent higher than they are in the south.
So what can be done to, uh, level the playing field? Mining Association of Canada president Pierre Gratton says absent direct government support by way of building road, power, or other transportation infrastructure, there are some creative incentives that should be considered to help lure companies north—and to nudge currently stalled or marginal projects into financially viability.
• Increase the mineral exploration tax credit from 15 to 25 percent for remote and Northern projects.
• Help offset drilling program costs by providing partial funding based on remoteness of the project.
• Create an investment tax credit of 10 percent on all construction spending associated with developing a mine. And add another 15 percent tax credit on all associated infrastructure costs—that’s ports, roads, and power plants built. Or a company could forego that 15 percent credit and instead apply for a conditional loan for up to 25 percent of its infrastructure requirements. (This loan would either be repayable over the mine’s life or partially excused if the government took over ownership of the infrastructure after the mine closed down.) Finally, a Northern infrastructure bank could also be put in place to provide long-term financing for infrastructure projects related to resource development in Canada’s North.
“Keep the risk on us,” Gratton says. “Just forego some of the early returns on the capital investment. You’ll get a lot that flows from it later—from income taxes, royalties, corporate taxes, at both levels of government.” Because, he says, if a mine doesn’t get built, all those jobs, revenues and spinoff businesses don’t happen.