Norman Wells resident Danny McNeely is a former MLA for the Sahtu. This is the first half of a guest column on the NWT economy.
The Northwest Territories has emerged from the grip of Covid-19 and the transitioning and a call for resiliency are upon us.
Economic recovery and health challenges force us to take a pragmatic approach to recognize the Covid impacts as we look to the future prospects, opportunities and, indeed, challenges.
As we head into a territorial election year in 2023, our environs continue to be influenced by domestic, national and global implications. The lingering Ukraine-Russia conflict has and continues to play havoc with global economies as we see record inflation rates plaguing, in particular, Canada and the United States. Governmental action and inaction is paving the way to ongoing economic challenges, and a recession is looming.
Supply chain inconsistencies and widespread labour shortages have chronically and critically impacted the NWT economic recovery as we emerge from the demonstratively negative impacts from the pandemic. Compounding our recovery is the inability to author our own plan of action as we remain content to rely on Ottawa’s formula for federal funding policy.
Our region is disparagingly void of foundational industry and, in turn, this amplifies the fiscal burden of being held captive by the federal government’s purse strings. This dependence dampens our economic survival while the tragedy of mental health issues takes its toll throughout our communities.
We are indeed in precarious times. Our federal MP’s Committee on Northern Affairs recommends direct housing funding to the respective communities. It is encouraging to note all but one community has executed multi-year funding agreements for housing with the federal government.
While there are numerous factors attributable to mental health, poverty and the apathy associated with it continue to torment our residents. Unstable investment conditions, limited and diminishing resources and out-of-control cost of living exacerbate our challenges with poverty. In the previous legislative assembly, an MLA alluded the best and immediate social program: a job. With economic hardships somewhat curtailed by meaningful employment, more importantly it will provide a positive mindset to be able to enjoy the multitude of benefits accruing from on-the-land healing.
Barriers to capital infusion
As noted, our region is simply devoid of core business and current legislation and policy integration tend to be barriers to capital infusion. As such, it’s imperative we capitalize on capital projects already approved. We have approvals in excess of some $1 billion for a range of projects such as the Bear River Bridge, Mackenzie Valley Highway, the Inuvik wind turbine and airport expansions, to name a few.
For example, the initial funding of the Mackenzie Valley Highway occurred in June 2018 in a combined federal/GNWT contribution agreement aggregating some $165 million. These funds sit dormant as the project has seen minimal progression. The requisite environmental assessment has yet to see requests for proposals.
The blatant apathy of the GNWT to move aggressively on these capital projects is a continuing affront to our limited avenues to economic recovery. The job potential from these projects is indeed staggering. Implementation is in our hands and for the sake of economic sustenance, mental health implications and a standard of living upgrade, our GNWT must be proactive. The impediments and excuses attributable to Covid are in our rear view mirror.
The environmental landscape is experiencing substantial change and deteriorating conditions. “Global warming “ is now a global political focus and steps to curtail the precarious impacts are principal considerations on a worldwide scale. These impacts are close to home as our permafrost is susceptible. All our communities are threatened by weather irregularities and the coincident economic impacts.
The global economy is seeing a concentrated emphasis on electric vehicle (EV) innovations and production. While the feasibility of utilizing an EV in the NWT is waning, the supply of critical components to this burgeoning industry can be of significant economic enhancement.
Transitioning to low-carbon stability is a global imperative. Our region is ripe with strategic metals, etc., fundamental to the EV industry and, collectively, we must institute measures to make capital investment initiatives such that our natural resources are put to sustainable development. Whether it’s tax considerations, regulatory amelioration, infrastructure development, etc., it’s integral to the resurgence of mining prosperity in the NWT.
Of course, these are tough decisions but the long-term benefits must be considered. The reduction in carbon emissions will be significant through transition to “green energy” and we are presented with a ground level opportunity with worldwide demand surging. Accompanying the benefits of reduced carbon emissions on a global scale is the inherent infrastructure development conducive to metal extraction.
The potential is both real and imminent. The discovery and production of the NWT’s Nechalacho Project is a game changer. This is a clear example of our potential of a raw material supplier on a global scale. Our region boasts substantial mineral deposits featuring an array of commodities, including the much sought after rare metals. Accordingly, should we tackle our own plan and ultimate reward through a “green” energy participation or should we continue to live off federal transfer payments and the depriving conditions they foster?