Thank you, Madam Chair and committee members.
I'm here on behalf of the leadership of both the Kitikmeot Inuit Association and Nunavut Resources Corporation, who unfortunately are not able to be here today due to their annual general meeting being held in Cambridge Bay, Nunavut, this week.
As way of background, the Kitikmeot Inuit Association, or KIA, is a regional Inuit association whose authority is enshrined in the Nunavut agreement. KIA represents more that 6,000 Inuit living in the westernmost region of Nunavut. Nunavut Resources Corporation, or NRC, is a wholly owned subsidiary of KIA that is focused on infrastructure development.
On behalf of my colleagues, I appreciate the opportunity to present to you.
My presentation is on a transformational infrastructure project that the KIA is proposing, the Grays Bay road and port project, or GBRP. If constructed, this project will profoundly improve the economic and social prospects of the Kitikmeot region's residents. It will also yield significant benefits for Canada while assisting in reconciliation efforts with the Inuit of western Nunavut.
This project has national appeal. The Canadian Chamber of Commerce agrees with our assessment of the benefits of this project and recently passed a resolution at its annual general meeting calling on the federal government to fund the project.
In championing the Grays Bay project, KIA is working towards its goal of Inuit developing, upgrading and owning strategic infrastructure that generates greater economic opportunities, especially those from Inuit-owned lands that have associated mineral rights. For KIA, this kind of infrastructure creates the basis for an economy that is able to provide multiple benefits and opportunities for generations to come.
The GBRP project is a nation-building initiative. It's a modern-day version of Canada's 19th century railroad development. It consists of three major components. The first is a brand new fully equipped port at Grays Bay, located on the Northwest Passage between the communities of Kugluktuk and Cambridge Bay. The second component is an all-weather gravel road running 230 kilometres south from the port to the Jericho Mine site, where it would connect to the winter road to Yellowknife and then onto the national highway system. The third component is an 1,800-metre runway at the port site.
The total project cost, including contingency, is just over $550 million. A portion of the construction costs is expected to be financed by third parties through project debt financing that would be repaid via road tolls and port usage fees, but to fill the gap, significant federal government support is required to make this first terrestrial connection to Nunavut work.
In addition to boosting the region's resource economy, there are two major strategic benefits associated with this project.
The first is that currently the nearest deepwater port to Grays Bay that is available to the Government of Canada is at Nanisivik, more than 1,300 kilometres away by air and almost 2,000 kilometres away by water. The Grays Bay port would be available to help Canada better respond to the increasing traffic in the Northwest Passage by supporting Coast Guard search and rescue operations, marine spill response, naval exercises and Arctic sovereignty in general.
The port is also well placed to be a hub for community and exploration project resupply. Goods could be trucked from Yellowknife to the port along the winter road and then shipped by barge once waters are open in July. This would be a huge improvement from the current situation, in which goods typically come in between late August and early October. Not only would community resupply be more timely through the Gray Bay Port, it would cost less.
For Canada, the primary economic rationale to support this project is that it will lower the cost to access, explore and develop the mineral-rich Slave Geological Province, part of which falls within western Nunavut. With abundant and known gold, diamond, base metal and rare earth deposits, the Slave Geological Province is recognized as one of the most promising mining regions in Canada.
However, having great mineral potential does not on its own result in a prosperous economy. We know that, compared to their southern counterparts, northern resource developers face significantly higher costs at all stages of the development cycle from exploration all the way to reclamation.
Lack of infrastructure is at the heart of the situation. The infrastructure shortcoming is an indisputable contributor to the high cost of doing business in the north. This assertion has been confirmed by many parties, including the National Indigenous Economic Development Board and the Mining Association of Canada.
Put simply, the north's infrastructure deficit is a bottleneck to development that must be addressed if the full potential of this region of Canada is ever to be realized.
In championing this transformational project, the Kitikmeot Inuit Association is attempting to reshape its future in accordance with a vision that was espoused by the Inuit negotiators of the Nunavut agreement.
KIA owns and manages more than 106,000 square kilometres of land in the Kitikmeot region, lands selected during the negotiation of the agreement. There are lands that include mineral rights, selected for their known economic potential and with the means through which Inuit could become more economically self-sufficient. The Grays Bay project would be especially effective in this regard. The proposed corridor would provide access to the highest concentration of Inuit-owned lands with mineral rights in western Nunavut.
There are already mining companies holding mineral rights along the Grays Bay corridor. However, without the type of publicly financed infrastructure in place that has supported resource development in other regions of Canada, most of these projects will remain infeasible; the minerals will remain in the ground; and Canada will forgo a substantial opportunity to benefit from this region's economic development.
Let me be clear. The opportunity cost is very real. Already one mining company, MMG, is poised to invest over $1.5 billion in mine development, with an additional $300 million in shared-use infrastructure that would be available to other users, including the federal government. Yet the business case for this project does not work unless someone other than a mining company builds the trunk road and the deep-sea port.
This single mine going into production is expected to generate an annual average of 3,500 jobs nationally over an 11-year period, projected tax revenues of more than $665 million to federal or territorial governments over 11 years, and a $7.5-billion surge in gross domestic product.
If these benefits seem conceptual, this summer has provided one very concrete reason why a port at Grays Bay is so important. You may be aware that the annual community resupply sealift is a lifeline for isolated Arctic communities. The Kitikmeot region is served by sealift companies based out of Montreal or Hay River in the Northwest Territories. This year, ice conditions in the Arctic were particularly severe, and because of this the Montreal-based sealift arrived several weeks later than usual. As for the Hay River sealift, ice conditions prevented it from reaching either Kugluktuk or Cambridge Bay. As a consequence, thousands of tonnes of supplies and vehicles bound for the Kitikmeot are now stranded in Inuvik For the people of these impacted regions whose lives and businesses are caught up in this situation, it is disastrous. Similarly, future situations would be completely avoided or greatly mitigated if there were a port in the Kitikmeot region with a terrestrial connection to the national highway system.
I will conclude with our recommendations to the Government of Canada. While our extensive efforts in Ottawa to promote this project have garnered near universal praise, there is no clear path for obtaining the necessary public financing that would release the social and economic potential of the area. The northern envelopes for existing infrastructure funding programs are simply not large enough to accommodate this nation-building and tax-revenue-generating project.
Beyond direct support for our project, we have three recommendations to the federal government.
The first is to add new funding to the national trade corridors fund. Such a step would align with the government's objective of diversifying trade.
Second, ensure that any northern envelope for infrastructure funding is large enough to support the scale of projects such as the GBRP , and also reflect the fact that there are significantly higher costs for infrastructure development in the north and that there is a lack of conventional public resources in the territories compared to in the rest of Canada.
My third recommendation is to ensure that sufficient funding for programs like the strategic partnerships initiative is there to allow indigenous proponents to seek to lead and develop their own projects in support of the natural resources sector.
I conclude my presentation and thank you.