Thank you, Madam Chair.
Thank you, committee members, for allowing us to present here. It is such an opportunity.
I have a slide deck I'm going to go through. You are going to hear the very positive and unique story of what is happening now in Nunavut.
I'm Dominique Girard, Vice-President, Nunavut, for Agnico Eagle. With me is Mélissa Desrochers, our Director of Government Relations.
Agnico Eagle is the biggest gold producer in Canada. We are one of the top 10 mining companies in the world. We have been in the mining business for 60 years. We have more than 10,000 employees.
As you can see on the map, our operations right now are mainly in Quebec, Nunavut, Mexico and Finland, but we are exploring everywhere.
Today I'm going to talk more about our Nunavut projects. You can see the location on the map. Meadowbank is the first project we started, in 2007. We've been operating there for the last 10 years. Amaruq, which is 50 kilometres northwest of Meadowlands, is going to extend the life of the mine until 2026. Meliadine is the one we are building right now.
As you can see, in Nunavut the only way to access projects is by air or by sea.
We've been there for 10 years, so we've developed good experience with community relations, exploration, construction and operation. We see Nunavut as having long-term potential. We have a good partnership with KIA. Last year we signed three IIBAs. We also have an MOU with the Government of Nunavut. Our vision is to be there for a long time and to have our mine managed by the Inuit. That won't happen in a few weeks. It's going to take time, but it is our goal.
As well as using local contractors, why not use local, renewable energy? This is where we're going. This is the vision.
What have the successes of the last 10 years been? The biggest success we have had has to do with training and developing capacity. Right now at Meadowbank, over the last 10 years, around 30% of our employees are Inuit, which is a good achievement. We've worked a lot on the entry-level positions, and also on the apprentice positions, where we've succeeded in qualifying five Red Seal technicians. Now we're looking to develop more leaders, so we've hired adult educators, and we're doing pairing programs with supervisors to go down that path. To have our mines managed by Inuit, we need to develop more leaders.
As to the socio-economic aspect, we're investing $1.6 billion from 2017 to 2019 to build Amaruq and Meliadine, and I'm proud to say today that we're getting close to the end. The projects are on time and on budget.
What will it look like? Two mines will operate with 2,000 employees, of whom one-third will be Inuit. We are currently at 15% of Nunavut's GDP, and we'll maybe go up to 20% or 25% with the ongoing Meliadine project.
In terms of challenges and opportunities, as you heard from different speakers, it is costly to live there, as well as to operate a mine. I will not spend a lot of time on the remoteness or the communication issue. I would like to go to the energy topic.
We are spending, or bringing by boat, 130 million litres of fuel per year to operate and to generate electricity for our projects. The cost of electricity is 26¢ to 27¢ per kilowatt hour, which is five or six times more than what we have down south. We are producing greenhouse gases equivalent to 70,000 cars per year. This is the situation right now. There is currently no alternative in Nunavut, but this is what we're looking for.
To put in perspective the consumption of power in Nunavut, I'm going to talk about the power line. If I look at the path of the power line, the community, all together, is going to need 4.6 megawatts. Our two mines are going to need 40 megawatts. We're a big player, a big client. We are happy to be part of the solution to the energy issue in Nunavut.
We've looked at many projects for five or six years now, because we see that there is potential. There are different study phases—from exploratory, to scoping, to pre-feasibility studies, to feasibility studies. The project is de-risked as we have more information on the technology.
The ones we've looked at are the SMR, the small modular reactor; the power line; the wind; the microgrid project; hydro, which is an in-river turbine; and also LNG. We spent over $500,000 to study LNG, but in fact it's not the one we're pushing right now. The one we see on the fast-track mode is the microgrid. I'm going to give you a bit more information on that.
Let's start with the best long-term solution, a power line starting from Manitoba and going to Nunavut, to Kivalliq. This is the best long-term solution. This is the silver bullet. We are very excited about it, and we are working closely with KIA and Barrick, with the support of the Government of Nunavut.
There are some aspects that we need to secure for that project. First, we need to know and to understand the cost at the end of the line. Right now we're paying 26¢, 27¢, and the price needs to be better than that. The other question is when the project is going to happen—the study, the permitting, and then the construction.
An important thing is the life of the mining projects. Meadowbank is already in operation. It's going to stop in 2025. Meliadine is going to go up to 2031. The top project, the Manitoba power line, will take, in our view, four years of permitting and three years of construction. The project could happen, if everything goes well, in 2026, when Meadowbank is going to be closed. The one we think should happen faster, in that portfolio, is the microgrid wind tower. Every year that project is going to run we're going to save 12 million litres of fuel with six wind towers, which represents approximately 7,500 cars per year that we're going to save in greenhouse gas.
I've talked about the best long-term solution, but the best interim solution is wind power. That could provide a clean, local and independent source of power by 2022.
Nunavut needs impactful initiatives right now, because we need to secure the load for the future power line. If there's no mine anymore in 2026, 2027, who's going to consume the power and make that project happen? There is action necessary right now to reduce greenhouse gas. As well, we see the wind microgrid as being owned and managed by Inuit. With the benefits of that wind microgrid, we could develop capacity and infrastructure.
In brief, Agnico supports the power line and fibre optic feasibility study to outline the schedule and the costs. Right now there is momentum. As QEC, Qulliq Energy Corporation, mentioned here two weeks ago, we see the energy solution more as a portfolio. It's not just one solution; a microgrid and the power line are part of it.
Thank you. Thanks for the opportunity to participate in this important consultation process.
My name is Brendan Marshall. I'm the Vice-President for Economic and Northern Affairs at the Mining Association of Canada.
MAC is the national voice of Canada's mining and mineral-processing industry, representing more than 40 members engaged in exploration, mining, smelting and semi-fabrication across a host of commodities.
Mining is the largest private sector driver in Canada's Arctic, employing approximately 8,500 people. That's one in every six jobs, or 8% of the total territorial population. These numbers expand when the Arctic regions of Manitoba, Quebec, and Newfoundland and Labrador are incorporated.
Direct GDP contributions in Yukon, the NWT and Nunavut are approximately 13%, 18% and 21% respectively as of 2016. In recent years, mining companies have invested and are investing, or have committed to invest, more than $9 billion in the region.
Per capita, mining is the largest industrial employer of indigenous Canadians. Further, mining companies have signed 455 agreements with indigenous communities since the year 2000, detailing how the benefits of responsible resource development are to be shared to ensure that communities profit.
In a region with few alternative economic development opportunities, the mineral industry has continually demonstrated its capacity to support inclusive economic growth. To illustrate, the diamond mines in the Northwest Territories have generated significant employment and business development opportunities for Arctic communities since the beginning of production. For example, 44,000 person-years of employment, of which 50% is northern and 25% is indigenous, have been generated, as well as skills training and assessment for more than 3,800 people, nearly 17% of the total territorial working population in 2017. Capital and operational expenditures totalled $18.6 billion, of which $13.1 billion has been directly invested in the north, and $5.6 billion has been invested in the regional indigenous business community. Community contributions and social investments have exceeded $100 million in that period.
Looking forward, the potential is even greater. As of August 2018, MAC was advised by CanNor that 26 projects are currently in the NPMO pipeline, exceeding $18.5 billion. However, 13 of them are without access to an all-season road.
Currently, domestic legislative and regulatory processes with implications for project permitting and costs persist, while recent supply chain failures have damaged Canada's reputation as a reliable trade partner. Further, recent tax reform in the U.S. has significantly enhanced that jurisdiction's investment competitiveness over Canada's.
The impact of this uncertainty has been felt by Canada's mining industry, where investment has dropped more than 50%, or $68 billion, since 2014, amid a strong price rebound for many commodities over the last three years.
The government has been considering action to bolster competitiveness. MAC has two recommendations about how the Arctic should fit into this package.
The first is to strengthen Arctic people and communities. It is well documented that significant gaps in human development indicators exist between indigenous and non-indigenous Canadians. The territories host the highest per capita demographic of indigenous peoples of any subnational jurisdiction in Canada. As such, more so than for any other region in the country, strengthening Arctic people and communities means advancing indigenous economic reconciliation.
Further, significant research has underscored the primacy of employment generation as a driver to improving quality of life indicators and social development. As such, to meaningfully advance indigenous reconciliation in the Arctic, the government should make provision for the development and implementation of a bold regional macroeconomic development policy that prioritizes responsible resource wealth development and employment generation as a primary means of advancing social development and closing the disparity gap between Canadian and Arctic indigenous human quality of life indicators.
There's a real opportunity to create a positive institutional legacy by ensuring the unique needs and realities of Arctic peoples are given the appropriate policy consideration. Paramount in achieving this is building off the region's existing strengths and opportunities.
The second recommendation is with respect to infrastructure. Key to making any macroeconomic development policy successful is addressing the region's infrastructure deficit.
One of the largest factors influencing mineral investment decisions in Canada's Arctic is heightened cost. Industry research and the “Levelling the Playing Field” report indicate that it costs two to two-and-a-half times more to build the same base or precious metal mine off-grid in the north compared to the south. Notably, 70% of this cost premium is directly related to the Arctic infrastructure deficit.
To date, infrastructure investment decisions that recognize northern challenges and opportunities through the trade and transportation corridors initiative and the Investing in Canada plan have been welcome, though the need is far greater than the funds allocated. MAC is aware that the northern allocation—the $400 million under the TTCI—was oversubscribed by greater than five times. It is also of concern that the Canada Infrastructure Bank may not recognize Arctic realities, which potentially limits the utility of this institution to address northern priorities.
Enabling additional mining development in remote and northern Canada is inextricably linked to the government's indigenous reconciliation and climate change agendas, and the Arctic infrastructure deficit is the single largest barrier to mining development in the region.
To address this, government should, as an immediate action, renew the TTCI in budget 2019, including the $400-million northern allocation. As a long-term dedicated solution, it should recognize the unique challenges of remote and northern regions through a stand-alone Arctic infrastructure investment fund based on the Alaska Investment and Development Export Authority, or AIDEA.
Thank you for your time. I'd be pleased to take any questions that you may have.
I'd like to thank the committee for giving NATA the opportunity to participate in this important study on northern infrastructure and strategies.
This briefing will be focusing on four specific aviation infrastructure issues for consideration by the committee. We're going to be looking at aviation weather information, airport infrastructure, runway approach aids, and aviation labour and skills needs. All four of these issues are critical to providing essential services to communities with little or no access to other means of transportation. All four issues are important to the economic development of northern and remote Canada.
Perhaps a bit of a background, I think, would be useful.
The Northern Air Transport Association's membership is representative of all aspects of northern and remote air operations, including scheduled passenger service, on-demand charter, helicopters, and specialized operations, including internationally renowned medevac and firefighting services.
NATA was formed over 40 years ago to support the economic development of northern and remote Canada with safe, sustainable air transportation services.
The management of operational system safety is a complex and daily issue for northern air operators and stakeholders.
Attached to the written brief provided to the committee is a map of Canada that I thought was useful to understand the challenges air operators face daily.
Northern operators must find solutions to operational problems that simply do no exist in southern Canada. Examples include long-range flight planning, limited weather information, and airports with minimum runway standards.
However, we also boast that a unique aspect of northern and remote aviation operations are the commercial partnerships with many first nation and Inuit groups. Pride of ownership and recognition of the diverse cultures creates a special bond between the air carrier and the customers that does not exist elsewhere.
The goal of this presentation today is to highlight four specific aviation infrastructure issues for consideration by the committee. There is a specific focus on technological advancements that present the opportunity to improve operational efficiencies and mitigate environmental impact, as well as offer solutions to address the challenge of developing a northern-based workforce.
The first one I'd like to brief you on is aviation weather reporting.
Accurate weather reporting for both destination and alternate airports is vital to operational system safety. NATA supports the goals of the federal government's Transportation 2030, a strategic plan for the future of transportation in Canada. Investment in new technology will improve system safety. Improved infrastructure will increase service reliability to northern and remote communities. Advancements in automated weather observing systems can enhance weather reporting capabilities, and in some cases may modify the role of the human observer. However, there is a need to keep engaged a local workforce capability as a desirable goal of a human resource development plan and system safety consideration.
The second item I'd like to bring to your attention is airport and runway infrastructure.
There are numerous recent reports that have identified the need for lengthening and strengthening northern and remote runways, including the July 2017 report of the Standing Committee on Transport, Infrastructure and Communities and the May 2017 Office of the Auditor General's report on civil aviation.
The standard for runway lengths at northern airports was set in the 1970s at 3,500 feet. With the subsequent change in equipment and regulatory and safety standards, that length is no longer appropriate. The lack of adequate runway length limits aircraft size, and therefore load-carrying capabilities, which adds to the overall cost of living and increases the stress on the environment.
Northern airport locations have near-ideal conditions for a night illusion called the “black hole effect”. The only way to mitigate this illusion is with high-quality runway lighting. Most remote airports do not have REILs, runway end identifier lights, nor do they have high-intensity lighting. The minimum standard for runway lighting must include ARCAL-controlled REILs, PAPIs, and high-intensity lights. PAPIs are approach lights that give you visual indications that you're above the ground properly.
Runway navigational approach aids are the third thing I'd like to bring to your attention very quickly. Identified, again, in almost every recent report on northern aviation infrastructure is the need for more satellite-based instrument approaches and improved runway lighting systems to enhance operational reliability. There's no bad person to the story. Nav Canada, the navigations provider, is doing an excellent job. Transport Canada is trying its best. I just really wanted to bring the importance of these to the committee. Operators providing essential services are forced to use technology and navigational procedures that are outdated, which increases operational risk.
I have a story that I want to pass on to you. Remember, northern and remote Canada isn't just north of 60°; it's north of about 50°. Many parts of Canada are very remote, and this story comes from Sioux Lookout, just to let you know, from a very experienced operator: “There are a number of remote communities that have marginal instrument approaches that need to be improved on. The current approaches at these airports have a significantly higher risk associated with them. These approaches rely on NDBs, non-directional beacons, that do not provide nearly as much or as accurate information as a modern global positioning system, or GPS.
“In many cases, these approaches also require flight crews to complete a “circling approach”. While technically meeting all required regulatory standards, they are universally considered high-risk approaches. These approaches also have higher visibility and ceiling requirements, meaning that in poor weather, there's less chance of a flight being able to land; hence, marginal approaches are not only a safety concern for the crew and the aircraft, but they also increase the times a remote community is cut off from emergency and essential services due to weather considerations. The minimum approach standard at all remote airports needs to include a GPS/LPV.” “LPV” means localizer performance with vertical guidance.
Finally, and I think the most importantly, those three issues are well known and are brought up in other studies, but it's an increase in the northern and non-traditional workforce in aviation that I'm really interested in right now. That's because, on October 2 and 3, the gave the opening address to an aviation labour shortages forum. His remarks highlighted the importance of developing a competent aviation workforce to ensure the system's safety.
The minister also addressed the challenge of attracting the next generation of aviation workers, especially non-traditional people such as females, indigenous people and other under-represented visible minorities. While the forum focused primarily on flight crew shortages and solutions, for the northern and remote aviation stakeholder there is a shortage of personnel for all aviation-related occupations, and some we don't even have names for yet because of the changes in the technology.
There are various barriers that need to be considered to develop a program that will be successful in attracting, training and retaining northern youth for aviation-related occupations. Training methods need to be sensitive, because, as discussed at the aviation shortage forum, it's problematic for students to have to leave their home and community to go to a school far away for a long period of time. There is an opportunity for more industry-sponsored, federally funded, on-the-job mentoring and training, customized for specific cultural needs and company-specific skill development requirements in the north. This is the type of program that provides awareness and increases individual confidence, and it should be supported with federal funding with greater direct community engagement.
I did research on this committee, as I always do, and some of the past speakers were so inspirational. I like this one from an earlier witness:
When there is investment in the people who live there, it's a fantastic opportunity for the growth and development of our communities. Money gets invested in...communities. The people who live there are...able to give back to the communities. They provide better for their families. They're able to give more to the community. They have a better, more enriched life. They have higher self-esteem. It's...much healthier for the people in their own communities.
There is a need for a northern and remote aviation labour skills committee of regional stakeholders, including service providers, regulators and territorial representatives, to conduct aviation needs assessments to develop a specific labour skills strategy for northern and remote areas of Canada.
NATA’s 43rd northern and remote aviation conference is taking place April 28 to May 1 in Yellowknife. This important discussion on northern and remote aviation infrastructure will be continuing with an airport development workshop that's now planned, as well as a focus on the recruitment of a northern and more diverse aviation workforce. We hope this committee will come and join us at our conference.
Thank you very much for your time today.
I think I'll answer that question a little differently. I am going to talk about one of the reasons I don't think the current design of the Canada Infrastructure Bank is going to work for the north.
The reason, as I've been advised by decision-makers who led the transition team, is that there's a public interest test, and that public interest test will be deemed to have been passed when the subnational jurisdiction meets a particular capital requirement relative to the particular project in question.
When we consider that 89% of Nunavut's territorial operational budget is already derived from Finance Canada, from the Government of Canada, and when we consider, as I mentioned earlier, the disproportionate gap in human quality-of-life indicators for northerners, particularly for northern indigenous peoples.... If you were the territorial government and you were required, with very limited resources, to make a decision about where you were going to invest that limited pool of capital, and you have extreme housing needs, are you as a government or would any of you as a territorial premier say, “Sorry; we're going to invest in building this road to this mine site, but we're going to put the housing on hold”? There is absolutely no way that you would do that, because that would be tantamount to political suicide.
It's for that reason that we don't think the territories are on equal footing with respect to provinces that have a tax base to access funds in the Infrastructure Bank. We think they'll be less able to meet that public interest test. There's that aspect.
The other component, as I mentioned earlier, is that dollar for dollar, everything costs more in the north. Even if you dangle that carrot of public funds to try to direct private capital into a particular project in the north, all else being equal, if that same project were in central Canada, the return would be greater despite the public funds.
Therefore, you can see there's this twofold barrier to the north having equitable access to that fund to build infrastructure in the north.
I'm going to build off that question and the response that Dominique offered. I'm going to do it by telling a little bit of a story.
In my recommendation, I referenced AIDEA because you asked what the government could be doing differently. AIDEA is the Alaska Industrial Development and Export Authority. It's a state-owned investment bank. It was capitalized in the late 1980s with about $300 million or $350 million. Its assets now exceed $1.5 billion a year. It leases for operation both of Alaska's deep-sea ports. It financed a road and a port, which may sound familiar to folks around this table. It financed a road and a port that catalyzed the viability of the Red Dog lead-zinc mine.
Red Dog is a mine that was developed by Cominco. It's currently owned by Teck Resources, which is a Canadian company. It's one of the richest zinc mines on the planet. Even despite that, it was not economically viable to build that mine without some form of support to put that infrastructure in place. It's been operating for almost 25 years. It has generated literally multiple billions of dollars of economic activity. It has a benefit-sharing agreement with all 13 Alaskan indigenous communities. It is a remarkable success story.
In Canada, we have a lead-zinc mine in Nunavut. It's called the Izok Corridor Project. It's not a mine yet. It's another relatively rich, known lead-zinc deposit. It's been known since the 1960s. It also needs a port and a road. It has not been developed because it has not received support to actually develop that port and that road, and there has subsequently been zero economic activity around or related to that particular project.
Where is Canada's AIDEA? Where is that institution that takes that exact same situation that we saw in Alaska that took a project that was not viable and put the pillars in place that allowed it to move forward through flexible financing, long-term loans, escalators on repayment, etc.? Where is that model for our north?
We talk a great deal about how there is so much potential, how there is so much opportunity, how there are resources out there, how there is gold in those hills, but we're not doing very much substantive work to actually pull them out of the ground in a responsible way to grow wealth and share that with communities. We need to do more, and we can. We just have to choose that this is what we want to do.
Thank you, Madam Chair.
Northwestel appreciates the opportunity to speak to you here this afternoon as part of your study on northern infrastructure projects and strategies. We are very hopeful that this will result in initiatives that continue to improve the quality of life and economic prosperity for the residents of Canada's north.
As a little about Northwestel, Northwestel is the incumbent telecommunication service provider in northern Canada, serving 120,000 Canadians in 96 communities throughout Yukon, the Northwest Territories, Nunavut and northern British Columbia. Our geographical operating area encompasses 40% of Canada's total land mass, but only 0.4% of the Canadian population. Just by way of context, 70% of the communities we serve have fewer than 500 residents.
Northwestel maintains approximately 5,000 kilometres of fibre optic cable and 8,000 kilometres of microwave radio, and we operate in some of Canada's harshest and most remote locations.
Our corporate and operational headquarters are based in Whitehorse in Yukon and Yellowknife in the Northwest Territories. We also have a regional office in Iqaluit and provide local employment in more than 15 northern communities. We are one of the largest continuous private sector employers in the north, with over 500 employees living and working here. Unlike many companies operating in northern Canada, our senior leadership team, our operational presence and most of our telecommunications equipment is resident north of 60. Approximately 12% of our workforce self-identifies as indigenous, and we have eight joint ventures with indigenous businesses and institutions.
Northwestel is a significant economic contributor in the north. Our annual direct economic impact is about $170 million a year in terms of salaries, operations and capital investment. Cumulatively we have invested more than $800 million in telecommunications infrastructure across northern Canada. Northern indigenous suppliers are often significant beneficiaries of this investment.
Northerners deserve fast, reliable, cost-comparative telecommunications, and we strive to meet those objectives in a world where standards and expectations are growing at an unparalleled speed. We are proud of our efforts to modernize telecommunications in the north and we've partnered with federal, territorial and indigenous governments on bold nation-building infrastructure investments across our region. These partnership agreements and joint ventures have occurred to meet the needs and capacity of our communities, unlike traditional P3 models, which are not always well suited to northern projects.
Yukon was the first jurisdiction in Canada to provide high-speed Internet to every community in the territory, and by the end of next year we will have successfully brought broadband Internet to our entire operating area, except for one community. The one community that doesn't have service is Bob Quinn, in British Columbia. It's a community with fewer than 10 houses.
Northerners benefit most when the private sector partners with government to access funding envelopes dedicated to northern and rural telecommunications infrastructure. This has been, and continues to be, an essential way to address the unique challenges of Canada's north, our limited access or small population base, and limited human and financial resources. It's especially true for small fly-in communities. By working in partnership with various governments, we've managed to make real progress towards providing Internet services and Internet rates across the north that are comparable to those offered in southern Canada.
One of the successes I'd point you to is our modernization plan, which is a $230-million investment between 2013 and 2018. All 60 communities that are served terrestrially, meaning either by fibre or microwave, now have 4G smart phone capabilities and broadband download speeds between 15 and 250 megabits per second. We've also provisioned 14 satellite-served communities with smart phone 4G capabilities and broadband speeds ranging from 2 to 5 megabits per second.
Most recently, with the support of ISED's Connect to Innovate program, our Tamarmik Nunaliit project will provision all 25 Nunavut communities with 15-megabit-per-second broadband and 4G LTE smart phone capabilities by the end of next year.
The Mackenzie Valley fibre link is another recent example of private-public collaboration. In 2017, the Government of the Northwest Territories, Northwestel and Ledcor provisioned 1,200 kilometres of fibre between McGill Lake and Inuvik in the Northwest Territories. This investment brought high-speed Internet at lower prices to the Mackenzie Valley and facilitated improved government programs, services and economic development opportunities.
As the Government of Canada looks north and identifies investment priorities, it should focus on projects that demonstrate public benefit and leverage investment by, and opportunities for, the private sector. When developing public policy and program funding models, please consider the precarious nature that many northern businesses face given high input costs, increased global competition and limited growth opportunities.
Public funding for initiatives that instigate direct competition with the private sector creates instability and discourages private investment. Financial support for infrastructure with broad public benefit that spurs economic growth makes doing business more affordable in the north, and so a high quality of life for all northerners should be the priority.
Investments in telecommunications connectivity are absolutely important, but so are investments in transportation and electricity. These have tremendous impact on our cost of doing business and the cost of service provision to our customers. Transportation and travel costs are among the most significant inputs to Northwestel's operations. We service 96 communities that are spread out over 40% of Canada's land mass. In the most extreme case, Grise Fiord is 1,500 kilometres from the nearest hospital in Iqaluit and 400 kilometres to the nearest community, which is Resolute. Distances increase the cost to serve these communities.
A lack of transportation options is also a significant cost input for any company operating in the north. Forty-three of our 96 communities do not have year-round road access, and of these, 30 have no road access at all. For business, that means equipment and supplies must be barged in on a sealift, in the case of the eastern and northern Arctic. Limited commercial flights into and out of communities often means air charters are required for both routine and emergency repairs.
I can give you an example. In some communities, if we have a phone line that's broken in a residential home and we charter in an aircraft, it could be $15,000 or $20,000 just to fix a phone line.
Electricity is another significant cost input for us. Our commercial power costs in the north are significantly higher than in the rest of Canada and 15 times higher than equivalent consumption bands in Quebec. In Nunavut, commercial rates can be as high as $1.11 per kilowatt hour. Rates in Nunavut are expected to go up, with rates in Iqaluit increasing until they're equal to the rates in the other communities.
While commercial power rates in the Northwest Territories and Yukon are lower than in Nunavut, they're nearly double the national average and climbing at a higher rate than inflation. As electricity is a key input to broadband service delivery, continued rate increases place upward pressure on residential and business Internet rates.
In addition to commercial power, our network's remote locations require us to generate our own power at 81 sites where we have no commercial power access. Thirty-six of those are accessed by helicopter only, meaning we have to sling diesel fuel in on helicopters to power the sites.
Improving broadband is not as simple as just needing more fibre, increasing competition or regulating prices lower. Distance, geographical challenges, high input costs and low population density make it challenging to find a business case for telecommunications service providers to recover their investments.
This challenging business case is made significantly more adverse by structural mechanisms that drive market conditions. Examples are the requirements to provide wholesale access. Unlike most southern jurisdictions, there are simply not enough customers and not enough revenue from local services in the smallest communities to support one service provider, let alone two or more in communities that are forced into competition for facilities access that directly impacts future private sector investment.
Achieving CRTC's 50-megabit target will require significant public-private partnerships in fibre to the home, 5G, long-haul terrestrial fibre, long-haul subsea fibre—for example, between Nuuk in Greenland and Iqaluit in Nunavut—or investments in technologies such as low earth orbit satellites in the coming years.
Government programs also need to consider redundancy concerns in rural and remote regions of Canada. Businesses and consumers rely on the Internet 24-7, and any service outage can have significant health, safety and socio-economic implications.
Closing the infrastructure gap between the Arctic and the south will require hundreds of millions of dollars in infrastructure development and strong collaboration between all levels of government, indigenous organizations and the private sector. This is the only way that Canada will meet its economic and social potential in the Arctic.
As one of Canada's largest permanent private sector employers in the north, I know first-hand how the infrastructure gap impacts the cost of doing business and our ability to be competitive. To shrink this gap and support social and economic development in the north, we have four recommendations.
The first one is to allocate specific funds that address the northern infrastructure deficit and that recognize the unique characteristics of operating here and the high cost of infrastructure development in the north.
Second, when considering major infrastructure investments, consider the broad benefits of the initiative both today and into the future. Frequently, public funds are allocated based on the business case for a single project outcome—a road, a hydro dam, a line of fibre—when in fact most nation-building initiatives support multiple social and economic benefits, and if considered in their entirety with potential partners, could include efficiencies and cost savings in preparing northern Canada for tomorrow.
Third, if northern Canada is to be fully engaged in the digital economy with reliable data and Internet services comparable to the south, public broadband programs must set aside funds specifically to build infrastructure and address redundancy concerns in remote and rural locations in Canada.
Finally, the government should look to abandon any obligation for subsidy recipients in Canada's north to offer wholesale access; instead, promote affordability through retail price commitments.
Thank you, Madam Chair. I'd be happy to take any questions the committee may have.
Madam Chair and members of the standing committee, thank you for inviting me to present to you today. It is indeed my pleasure to be here to speak on behalf of the Labrador Inuit and the Nunatsiavut Government.
We represent about 7,200 Labrador Inuit. The Nunatsiavut Government came into existence on December 1, 2005, with the signing of the Labrador Inuit Land Claims Agreement. We are the first Inuit region in Canada to achieve self-government.
I am here today to talk to you about some of the infrastructure needs we have in our communities, but first of all, I think it's important to put things into perspective.
As in other northern regions, there is a huge infrastructure gap in Nunatsiavut compared to other areas of the province and indeed the country. One could attribute this deficit to geography and the fact that we are isolated from mainstream Canada, higher construction costs for our projects, limited transportation links to and from our region, a shorter building season, and at times weather that can present many challenges.
The biggest challenge as we see it, however, is a lack of willingness on the part of both the federal and provincial governments to provide the necessary financial resources to help close this infrastructure gap. There needs to be a new way of thinking, a bold vision for the future, one that will see major capital investments in Nunatsiavut and other northern regions that will enable further economic activity, which in many respects will improve the lives of our people.
There's the Nain airstrip. Nunatsiavut's five communities are serviced year-round by air, primarily by Twin Otter aircraft, and seasonally by marine freight and passenger vessels. There are no road links to Nunatsiavut or between Labrador Inuit communities.
Modern infrastructure is a core component of a competitive economy. If we are to grow, real investments in both social and physical infrastructure are required.
Take the airstrip in Nain, for example. It's one of the oldest airstrips on the coast of Labrador. Pilots often have a difficult time landing because of crosswinds, and it is not equipped to accommodate night landings. The Nunatsiavut government has been lobbying for years for a new airstrip for Nain. The community continues to expand. Future growth will result in increased air traffic, further compounding the problems that currently exist.
We also anticipate a steady increase in tourism traffic to Nunatsiavut and the Torngat Mountains National Park, with Nain being the main staging point or gateway to the park. A new modern airstrip capable of handling aircraft larger than Twin Otters would help stimulate economic development and reduce air transportation and freight costs. The cost of a new airstrip at a different location is estimated at over $50 million. A high percentage of that cost would be associated with a road link from the community.
Last December, Indigenous and Northern Affairs Canada provided the Nunatsiavut government with funding to investigate the potential extension of the Nain runway, considering new navigational technologies. That report has been completed, and it confirmed the existing airport is in need of immediate repairs in order to maintain some level of safety and that a new airstrip in a different location is required.
Capital investments are required from both the federal and provincial governments in order to ensure the community of Nain has an airstrip that is safe. Consideration should also be given to ensuring the airstrip facilities in the other four Labrador Inuit communities are able to accommodate larger aircraft—again reducing freight and passenger cost as well as helping to stimulate economic development—and have basic infrastructure such as running water and working toilets.
Regarding marine infrastructure, while improved and enhanced airstrips are important to advancing economic development, the sea is still our highway, yet we continue to have a substandard marine service that has been plagued with problems for many years.
Following an RFP process that we had some serious concerns with, the Government of Newfoundland and Labrador awarded a 15-year contract for the supply of a new marine vessel to service our region. Despite reassurances from the province that the new vessel will provide a better service, we remain skeptical, mainly because we feel that the RFP failed to address many of our long-standing concerns, particularly with respect to existing marine infrastructure, and was developed without any involvement by or consultation with the Nunatsiavut government.
The new vessel will handle both passengers and freight. Right now, the communities are serviced by two vessels. With the one vessel, there will be more congestion at the current port facilities. The new vessel will operate out of Happy Valley-Goose Bay, which also lacks adequate port facilities or suppliers of goods and materials.
Many businesses in our region have long-standing relationships with suppliers in Newfoundland. Goods have been shipped from the island for decades, but now will be shipped from Happy Valley-Goose Bay, where we know the cost will be much higher and the quality far lower, especially if goods have to be trucked in from the island.
Some of the strongest and earliest impacts of climate change are being felt throughout Nunatsiavut. Sea ice coverage in the northern Labrador Sea along our coast declined 73% over the last 40 years. Extreme weather conditions are predicted to become more common in the future, creating a very real need for improved sea travel safety.
Nunatsiavut communities are willing to embrace new technologies and practices, yet are more keenly aware than others that change within the region requires careful planning and great attention to how our way of life and our environment will be affected. The promotion of safe Arctic shipping, the development of highly responsive life-saving search and rescue operations and the expansion of more reliable telecommunications infrastructure are keys in helping us adapt to climate change.
The number of ships sailing along the north Labrador coast is on the rise and will continue to increase as northern shipping routes are developed and expanded. That is why it is extremely important that we promote the development and enhancement of marine infrastructure in our communities. At the same time, we have to ensure that proper mechanisms, rules and technologies are put in place to reduce the chances of marine disasters. A disaster at sea along the Nunatsiavut coast would be devastating.
Addressing shipping challenges in the Arctic will require a global effort by those who are coveting the Arctic's resources and its potential for shortened transportation routes. All levels of government have to work together to promote safe shipping activities, increase search and rescue capabilities and mitigate the impacts that will arise from resource developments on and off our shores.
Regarding housing, I am pleased to note that over the past three years the Nunatsiavut government, with its own-source revenue and some significant funding transfers from Ottawa, has been able to start to make a significant contribution towards dealing with the Nunatsiavut housing crisis. The Nunatsiavut government has completed a six-unit prototype complex in Nain, which is now occupied by three young families and three seniors. We have constructed one multi-unit complex in Hopedale, with a priority to provide for families whose children may be in care or going into foster care as a result of a lack of adequate housing.
Construction of an identical complex in Nain will begin this fall. These complexes are—