Canadian Arctic Resource Committee

Briefing Note: Bathurst Inlet Port and Road Project (BIPAR)

and impacts on species in the Slave Geological Province (SGP)

(NWT and Nunavut)

I) Background on SGP

a) Intro to Region- Land, Wildlife and Communities

b) Mining in the Region

c) Roads in the Region

II) Slave Geological Province Transportation Corridor

a) A History of Studies

b) Political Context

c) Need for the Road

d) Current Proposals

e) Estimated Costs

f) Environmental Scoping

I) Background on SGP

a) Intro to Region: Land, Wildlife and Communities:

• The Slave Geological Province (SGP) is an area of 190 000 square Km ranging from Great Slave Lake in the NWT to the Arctic Coast in Nunavut.

• SGP contains 2 major ecozones- 1) Taiga Shield and 2) Southern Arctic ecozones. It is also home to the (normally) 350 000 strong Bathurst Caribou Herd, moose, muskox, black and grizzly bears, small mammals, birds, waterfowl and various species of fish. There are some indications that the Bathurst herd may be in decline—its current numbers are thought to be only 260,00--but a full census is scheduled for 2003.

• SGP is home to several Aboriginal peoples: In Nunavut- the Inuit and in the NWT- the Dene and Metis as represented by Dogrib Treaty 11 Tribal Council, the North Slave Metis Alliance, and Akaitcho Treaty 8 Tribal Council. In Nunavut, land claims have been resolved and the Inuit have extensive surface and subsurface interests and rights. In the NWT, the Dogribs now have an initialled land claims and self-government agreement. Akaitcho Treaty 8 are in negotiations over treaty entitlement and self-government and the North Slave Metis are not yet at the table. The federal crown owns most of the land and particularly subsurface mineral rights in the SGP, both in the NWT and Nunavut.

• The following communities fall within or around the SGP: Yellowknife, Rae-Edzo, Wha Ti (Lac la Martre), Rae Lakes (Gameti), Wekweti (Snare Lake), Dettah, Lutsel K’e, Kugluktuk, Cambridge Bay, Umingmaktok, and Bathurst Inlet. All except Yellowknife are primarily Aboriginal communities (Dene, Inuit and Metis), characterized by “mixed economies,” blending wage employment, resource harvesting, arts and crafts and government transfers. Unemployment rates (except in Yellowknife) are high.

b) Mining in the Region:

• In 1997 the Fraser Institute ranked the NWT as having the greatest mineral potential of all provinces and territories in Canada. The SGP is the most mineral rich area in the NWT and Nunavut, with significant gold, diamond and base metal deposits. 20% of Canadian mineral exploration currently occurs within the NWT, mostly within the SGP.

• Diamonds were discovered in the SGP in 1991 leading to one of the largest staking rushes in Canadian history. For example, exploration expenditures between 1992 and 1993 jumped from $43 million to $101 million.

• Currently, Ekati diamond mine is operational, Diavik’s diamond mine will soon be producing, and the Lupin gold mine in Nunavut reopened operations in 2000. A base metal deposit near Izok Lake is under serious consideration for development pending regulatory decisions on related infrastructure (i.e. the Bathurst Inlet Port and Road project). Another diamond project at Snap Lake, owned by DeBeers is the subject of an environmental assessment by the Mackenzie Valley Environmental Impact Review Board. The Jericho project is undergoing an environmental assessment by the Nunavut Impact Review Board. The Doris-Hinge project in the Hope Bay gold belt, just north of the calving grounds of the Bathurst herd, is now the subject of a part 5 review by the Nunavut Impact Review Board. SGP has supported gold mines near Yellowknife in the past and the Tundra and Salmita mines (See appendix # 1).

• There are approximately 30 mining projects in the SGP at various stages of development. Most are in the exploration and feasibility study stages. Projects in these stages take approximately 5-10 years to reach production if they go ahead.

• According to the GNWT, existing and proposed NWT diamond mines and oil and gas developments are expected to contribute over $65 billion dollars to the national GDP. This will create over 270 000 person years of employment and generate $17 billion in royalties and taxes to Canada, of which 85% flow to the federal government and 15% will go to the territorial government. The GNWT has every reason to provide the most optimistic statistics possible in its attempts to secure federal infrastructure funds to promote further non-renewable resource development.

c) Roads in the Region:

• Currently the SGP has 200 km of all weather roads and 750 km of winter roads. Most but not all of the communities in the NWT portion of SGP are linked by highway or by winter roads at least 3 months of the year. In Nunavut transportation is primarily by plane and supplies are brought in by sealift.

• Each year the Lupin Gold mine, operated by Echo Bay Mines constructs a winter road from North of Yellowknife two-thirds of the way to the Arctic coast to transport their equipment and resupply the mine. Ekati and Diavik mines build extensions off of this road and share the costs as do other exploration projects. The road is approximately 500 km long and provides access for a maximum of 3 months per year. The license for the Lupin Winter Road is granted by the Department of Indian and Northern Affairs. The road has never been subjected to any form of environmental assessment and the current approvals are up for renewal in 2003.

• All other major highways and winter roads are under the jurisdiction of Government of the NWT (GNWT) Department of Transport (DOT). These roads link communities and provide transport to the south.

• Aside from the Lupin Winter Road there are no all-weather roads in Nunavut in the SGP. Some winter roads have been pushed through for various exploration projects including the Ulu gold deposit north of the Lupin mine.

• The existing road system was built by the federal government. Transfer of responsibility and funding to the GNWT for road maintenance and capital upgrades was completed by 1990. The federal government retains responsibility for constructing new roads in the NWT and Nunavut (although they have not constructed any since the transfer of responsibility).

• The GNWT’s Department of Transport capital budget has generally been between $30 and $42 million/ year in the late 1990’s of which less than half is allocated to highways. Obviously, the GNWT and Government of Nunavut cannot afford to build new highways without federal and private partnerships.

II) Slave Geological Province Transportation Corridor

a) A History of “Studies”

§ A transportation corridor through the SGP was first suggested in 1955 by the NWT’s Commissioner, R. G.Roberston.

§ In the late 1970’s DIAND undertook an analysis of future transportation in the region with an emphasis on promoting mining development.

§ In 1989 the Government of the NWT Department of Transport (DOT) was created. DOT developed a long-term Transportation Strategy in 1990 that included building an Arctic Coast transportation corridor through the Slave Geological Province. The SGP transportation corridor has been high on the GNWT’s agenda ever since, and was included as a priority in the 1994 Transportation Strategy update.

§ In 1994 GNWT spent $1.2 million to study the potential of roads through the SGP. In 1995 DOT produced a report on potential economic scenarios and the benefits of an all-weather road to the Arctic Coast.

§ As part of the 1998 Highway Strategy, the GNWT DOT was allocated $2 million dollars to conduct preliminary studies on 4 priority road projects, including the SGP Transportation Corridor. Studies were conducted in the SGP on Need/Feasibility, Mapping and Route Analysis, Cost Estimates, and Preliminary Environmental Scoping. Reports were produced in 1999. A fifth study on economic impact and benefit cost analysis for the SGP was undertaken in 2000.

§ As part of a push for “stakeholder involvement” in 1998 the GNWT gave preliminary planning workshops and set up a SGP Transportation Corridor Advisory Committee. Committee representatives include NWT business organizations, NWT and Nunavut Aboriginal groups including the Kitikmeot Corporation (Charlie Lyall), the Nunavut Government, and Ecology North.

§ In Nunavut, the BIPAR project is being spearheaded by the Bathurst Inlet Port and Road Joint Venture, owned by the Kitikmeot Corporation (50%) and Nuna Logistics Corporation (50%) which in turn is owned by the Kitikmeot Corporation (25.5%), Nunasi Corporation (25.5%) and 49% by the managers. Together with the Government of Nunavut and Nuna Logistics, they form the Project Technical Committee which is applying for funding, conducting feasibility studies and promoting the idea. The total capital cost of the project is very conservatively estimated at about $220 million while previous studies have suggested costs of over a $500 million. Former partner Inmet Mining Corporation (owners of the Izok Lake base metal mine) pulled out of the deal in early 2003, citing falling base metal prices.

§ In 2001 INAC (Indian and Northern Affairs) provided $3.008 million to the Kitikmeot Inuit Association (KIA) to conduct a BIPAR feasibility study. $1.839 million was to be provided in first year and $1.169 million over the 3 remaining years. Six million dollars in total was put up by the Kititmeot Corporation (the business arm of the KIA), territorial and federal government departments, Inmet, BHP and Diavik to study the Bathurst Inlet project. A preliminary project description was submitted by the Joint Venture to the Nunavut Impact Review Board in April 2002. The Board has suggested a Part 5, NIRB only review of this project but the final decision is up the DIAND Minister. The GNWT, several Aboriginal communities, MVEIRB, CARC and WWF have all stongly urged that a Part 6, federal environmental assessment panel, be used.

b) Political Context

§ There are considerable financial and engineering impediments to building a highway through the Slave Geological Province, including the enormous cost, and technical difficulty of crossing permafrost, many large lakes (especially Contwoyto Lake) and rivers, and the topography of the rocky region. This is presumably why the project has consistently been shelved by the federal government. The GNWT DOT has ardently supported this transportation corridor since its creation. The Department of Transport has responded to federal disinterest by commissioning studies and reports to keep the idea alive. However, with increased exploration and mining activity in the region, it is becoming more likely that the federal government will fund such a mega-project.

§ There are also significant social and environmental concerns to the SGP transportation corridor, such as unresolved land claims and threats to the Bathurst caribou herd, not to mention the corridor’s potential to increase mining operations. These are probably not the main reasons the federal government has not funded the project.

§ Since the 1999 creation of Nunavut the SGP is divided between the two territories. The road as currently configured ends close to the border between them, but some traffic would flow both ways. Should the BIPAR proceed, it would likely become the main resupply route for the mines and communities in the area, disrupting existing resupply business run from the NWT.

c) Need for the Road?

• According to the 1999 need/ feasibility study of BIPAR by Arthur Anderson, there is no short term need for an all-weather road, a winter road being sufficient for diamond and gold mining purposes. They did identify a long-term need assuming further developments take place.

• Alternatives that have been suggested and/or studied in the past include maintaining winter roads to access mine sites, and a train route. A relatively short extension of the current all-weather road northeast of Yellowknife has also been suggested as a means to provide a longer life to the seasonal winter road to the north. Climate change appears to be shortening the window for operation of the winter road to Lupin. The effect of future climate change on the operation of all-weather roads is unknown.

• Diamond and gold mines are less reliant upon roads and ports than base metal mines because of the smaller quantity of goods extracted. Thus while an all- weather road would be a boost to the diamond mines, it is not a necessity, while the base metal mine at Izok Lake depends upon a port and road.

• An all-weather road may suddenly make many mineral deposits economical, leading to uncontrolled levels of development and numerous branch roads as new mines are created.

• The majority of road needs are for fuel supply to power the mines. This energy comes from both the north and south.

d) Current Proposals

• There are currently two proposals to the federal government for a road and port through the SGP, one from Joint Venture for the Nunavut end of the Project and one from the GNWT as part of a larger highway funding proposal for the NWT.

• The Bathurst Inlet Port and Road Joint Venture proposal is to build a port at Bathurst Inlet and a route down the east of Contwoyto Lake to the Nunavut border. A major challenge would be crossing Contwoyto Lake, which would likely be by ice road in the winter and barge in the summer. **This portion of the road was recently dropped from the proposal.

• GNWT proposal to Corridors for Canada (federal government) was submitted in May of 2002. It attempts to make the case for federal funding for highway developments in the Mackenzie Valley and SGP. The GNWT rationalizes the benefits as increased mineral activity and revenues in the SGP and opening the way for an oil and gas pipeline in the Mackenzie. They also promote the project as a “vision of Canada joined from coast to coast to coast”. In the SGP, the proposal asks for $133 million of federal funding for a Deh Cho Bridge, paving the Yellowknife highway and developing the Ingraham Trail. Paving the Yellowknife highway would be a start towards extending a transportation corridor north along mining resupply routes. This funding proposal would be matched by $67 million of GNWT funding and $43 million of private funding.

• The GNWT strategy was to build the road to Nunavut in stages, hopefully subsidizing some of the costs by implementing a commercial toll once the road is build. This reflects the tight funding reality. The toll may not be a realistic strategy as legislation on a toll was dropped in 2002. The GNWT is considering it will be more economical to build from the north south rather than visa versa as the need arises over the long term. This assumes the BIPAR will go ahead.

• The Nunavut Technical committee feasibility study indicates that they hope to make the Nunavut end of the project financially viably with a Private/ Public partnership. The Government of Nunavut has approached the federal government for infrastructure funding.

• There are numerous possible routings for the SGP corridor highway. They all extend to Bathurst Inlet.

e) Estimated Costs:

§ Estimated costs of a SGP highway corridor from Great Slave Lake north of Yellowknife to Bathurst Inlet on the Arctic Coast are between $380 and $600 million for approximately 850 km of road, with higher estimates more likely. These estimates do not take into consideration land acquisition costs or royalties paid to Aboriginal landowners. Land acquisition costs are likely to be minimal as most of the route will be on federal Crown lands. There may be some minor costs associated with access to Aboriginal-owned surface lands. No new estimates of cost were made public with the alteration of the project to reduce the length of the road.

§ Recent estimates (by UMA engineering Ltd.) state that the portion of road between Bathurst Inlet to the Southern end of Contwoyto Lake near Lupin would cost approximately $180 million for about 290 km of road (some studies say 235 km and others say 290 km- this depends upon the exact route). This is certainly optimistic.

§ Costs per km are estimated at between $500,000 and $550,000.

§ Road maintenance costs are estimated at $11 million/ year for the entire (Bathurst to NWT) route.

§ Cost estimates to construct the Bathurst deep sea port are approximately $50 million.

§ Port maintenance costs are estimated at $3 million/ year.

§ Among DIAND, the NWT government, the Nunavut government and interested mines, almost $10 million has already been spent on studying the BIPAR idea. This does not include projects such as hydographic mapping of the area, which are important pre-requisites for shipping connected to mine resupply and concentrate transport and development. For example, $2.7 million was spent on completing hydrographic surveys of the Coronation Gulf between 1994 and 1998 by the NWT and federal governments with private partnerships.

f) Environmental Scoping

• As part of the GNWT’s 1998 highway strategy an environmental scoping study was conducted for the corridor. The findings raise important concerns.

• The NWT communities of Rae/Edzo, Yellowknife, Dettah/N’dilo, Lutsel K’e Cambridge Bay, Kugluktuk, Bathurst Inlet and Umingmaktok were consulted. Treaty 11 Chiefs were consulted and said community visits to Wekweti, Snare Lake and Wha Ti were not necessary.

• The purpose of scoping was to identify valued ecosystems components (VEC) and valued social components (VSC) that should provide a focus for environmental assessment should the project go through

• Communities and ‘Stakeholders’ raised significant environmental and social concerns:

• There was no consensus on why or if a road should be developed
• Need for long term stable economic opportunities, not boom and bust cycles
• Need for road to serve community interests above mining interests- need to link communities to a road- need to reduce cost of living as first priority
• Inuit and Dene must control, own and operate developments in their lands and must benefit from it (in NWT in conjunction with government.)
• Concerns that all land claims along corridor be settled prior to development
• Need for public involvement throughout process
• Concern for Bathurst Caribou herd was the single uniting concern, especially for caribou migration and calving, need for caribou management board in advance of any development
• Concern of effects of shipping in Bathurst Inlet upon marine life.
• Debate over whether non-renewable resource development is the answer to economic development needs - some suggested looking at alternative forms of economic development
• No agreement on routing- some suggestions should go to Kugluktuk instead of Bathurst, debate over whether should go from Rae or Yellowknife, debate on whether should be built from the north or south
• Concerns for irrevocable loss of resource and habitat
• Concerns for changes to harvesting practices and increased access by outsiders
• Need to protect land/ water/ wildlife from spills
• Need to consider effects of global warming and air quality/ emissions
• Concerns and benefits of potential increased tourism
• Concerns regarding social and cultural changes to existing way of life

§ Environmental Scoping concluded:

· Significant further consultations needed to address issues of need and purpose of the road, location of port and corridor, and concerns regarding Bathurst caribou herd

· Need for more Baseline Data collection

· Significant amount of additional data would be needed for Cumulative Effects Assessment

§ The report cited the following regulatory and environmental reviews that might be required:

· Federal legislation (Canadian Environmental Assessment Act (CEAA), and regulations and the Mackenzie Valley Resource Management Act (MVRMA)

· Environmental assessment processes established in each territory (NWT) and review under Nunavut Land Claim Settlement Act (NLCSA)

· Review by a joint panel

§ The report indicates it is likely for an environmental assessment to take at least 5 years.