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Morning construction on the Inuvik-Tuktoyaktuk Highway near the Beaufort Sea coast. (JEFFREY JONES/THE GLOBE AND MAIL)
Morning construction on the Inuvik-Tuktoyaktuk Highway near the Beaufort Sea coast. (JEFFREY JONES/THE GLOBE AND MAIL)

The North

Building a road to open up the riches of Canada's North Add to ...

This is part of The North, a Globe investigation of unprecedented change to the climate, culture and politics of Canada’s last frontier. Join the conversation with #GlobeNorth

William Dillon Jr. is serious about his job. When visitors approach the construction taking place on the new $300-million all-weather road near the Arctic hamlet of Tuktoyaktuk, NWT, he scoots up through the crisp cold on his all-terrain vehicle to meticulously take names and photos.

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Mr. Dillon is an environmental monitor for the Inuvialuit Regional Corp., the agency in charge of improving the economic well-being of the aboriginal people whose land the highway crosses as it winds its way toward Inuvik, 140 kilometres south. Mr. Dillon, who grew up north of here on the coast of the Arctic Ocean, understands the economic implications of the ambitious project, and also the risks.

When completed in four years, the gravel roadway will for the first time connect Tuktoyaktuk, today a collection of mostly modest wood-frame homes that hug the coast, to the rest of Canada year-round. It is a link that many northerners have long urged. They predict it will foster a new era of economic growth and prosperity following a number of false starts for resource developments over the decades, and it may one day become the northern section of a $1.7-billion route along the Mackenzie River valley.

Energy plans for the north include shale oil near Norman Wells, NWT, in the central Mackenzie Valley, a potentially huge reserve where companies have started to drill, and – most important for the road – a return to the Arctic offshore to try to tap some of the country’s most abundant and hardest-to-recover oil and gas. To date, the tough tasks of moving equipment and workers over winter ice roads and by air, and setting up long-term work sites in remote locales, have meant exorbitant costs and long timelines to complete projects.

In the late 1950s, Prime Minister John Diefenbaker first sketched out a road to ease the way for Canada to reap benefits from its bounty of energy and minerals across a vast expanse of land and ocean. But the Inuvik to Tuktoyaktuk Highway also promises new mobility for people like the Inuvialuit to take advantage of employment and business opportunities – if and when those multibillion-dollar projects get under way.

On Jan. 8, more than half a century after Mr. Diefenbaker talked of a “road to resources,” Prime Minister Stephen Harper travelled to Inuvik to inaugurate the construction. Today, the thoroughfare across a fragile tundra fits into his aims to secure Canada’s Arctic sovereignty as an international race for resources heats up. Ottawa has kicked in a third of the construction cost, and the government of the Northwest Territories is paying the rest.

Mr. Dillon is wary, though. After putting one more visitor through the paces of getting his I.D. and showing off his pair of huge black wolf mitts as the sun hung just above the horizon on a clear November morning, he talks of the highway as a double-edged sword – a boon for industries looking to extract resources and a potential route for a greater influx of crime and other social ills.

He worries about companies creating excitement and then leaving when the market shifts, as was the case in the Mackenzie Delta region with energy exploration in the 1970s and, more recently, the Mackenzie gas project that is now in limbo as it faces rising costs and uncertain markets.

“They train us, and then they disappear. They come back again with another idea, creating work, and then they start to train us again. That tapers off. The money runs out and then they disappear again,” Mr. Dillon, 55, said. “Boom and bust, boom and bust, every year.”

But government officials and aboriginal leaders say it’s different this time. With Ottawa’s move to pass more legislative power to the territorial government under a process called devolution, the two-lane gravel road atop the permafrost represents the beginning of a new era of development and jobs where they are sorely needed.

“The fact remains there’s a lot of gas both onshore and offshore and the oil potential in the offshore is tremendous. It could rival the Gulf of Mexico,” said Dave Ramsay, the territory’s Minister of Industry, Tourism and Investment. “We have the resources, and having this road constructed – it’s much more than just a highway.”

 

A sea change for Tuktoyaktuk

In Tuktoyaktuk, a hamlet of about 900 people on the northern shore of the Canada’s mainland, locals hope to establish the only deep-water port in the Western Arctic as global warming makes commercial navigation through the Northwest Passage a more regular phenomenon. In September, a 225-metre, ice-strengthened ship loaded with B.C. coal bound for Finland became the first bulk carrier to voyage through the storied route, showing how sea conditions have changed.

Aided by a highway to move equipment and workers back and forth, Tuktoyaktuk makes an ideal base for Beaufort Sea drilling, say members of the NWT government, including local MLA Jackie Jacobson, one of the biggest proponents of the link to the ocean. Late last year, Imperial Oil Ltd., Exxon Mobil Corp. and BP PLC started the regulatory process that could see multimillion-dollar wells drilled in the icy waters by around the end of this decade.

Remnants of the last energy rush in the 1970s and 1980s remain in Tuktoyaktuk, including worker housing that has since been used and reused by local businesses, and an old drilling caisson the juts up from the ice on the outskirts. That era’s drilling took place close to shore. New wells contemplated by Imperial and its partners would be drilled as far as 175 kilometres northwest of Tuktoyaktuk, requiring new oil field and marine maintenance facilities as well as emergency spill response vessels.

Merven Gruben, the hamlet’s former mayor and an enthusiastic promoter of the region, predicts the highway will bring more than petroleum engineers. He believes it will unleash a wave of tourism as Canadians and others seek adventure in the Arctic.

Tuk, as locals call it, is not ready for such an influx today. It has few stores and no hotels or restaurants, and like most small northern communities, it offers minimal employment and sky-high living costs due to the need to fly in food and other supplies in the summer. It has been connected to Inuvik, the government centre of the region, in winter months by ice road. Round-trip flights cost more than $400.

The highway stands to reduce the overall cost of living in Tuk by $1.5-million annually and increase the gross domestic product of the region by $330,000, according to a report prepared for the NWT government. Tourism spending is projected to increase by $2.7-million a year. “We need the hotels, we need the RV parks, we need the garages. We have to expand our schools and our health centres,” Mr. Gruben said. “Tuk’s never going to be the same again. It’s got to expand. A lot of people will be moving here – families will be moving back here.”

Relaxing in his office after taking a few minutes to slide out onto the ice in his dress shoes to help a group of neighbours free an impressive catch of fish from their net, Mr. Gruben lamented that many young people leave owing to a lack of opportunity at home and high costs.

According to a recent study conducted for Dennis Bevington, the NDP MP for Western Arctic, 23 per cent of NWT residents earned less than $15,000 a year in 2010. The average personal income in Tuktoytaktuk was just over $35,000 a year. Meanwhile, a two-litre carton of milk costs $9 at the local supermarket.

The romanticism of the North endures, though. In early winter, the sun rises in mid-morning and stays low on the horizon, making for long shadows. A flight between Tuk and Inuvik on an Aklak Air Twin Otter turboprop reveals a seemingly endless snow-covered landscape dotted with frozen lakes and ponds. From the shore in Tuk, the frozen Arctic Ocean seems to disappear into an abyss. Flocks of white ptarmigan dart about close to the ground near the pingos – the area’s remarkable conical hills that are formed from the upheaval of ice.

The scene is broken up now by the gravel trucks and heavy machinery laying a roadbed of up to 1.8 metres high, a thickness deemed necessary for protecting the all-important permafrost, especially as climate change provides increased risks. At its peak construction, 250 workers toiling from both ends will be pushing toward the middle of the route.

Resource development will help solve a host of problems in the North, including unemployment, said Floyd Roland, mayor of Inuvik and a former NWT premier.

“As much as people in the rest of Canada want to keep us pristine, we want to make a living,” Mr. Roland said. “My father grew up here and he hunted and trapped and he built snow houses. If I asked my children to live in the conditions he lived in, I don’t think they’d survive very long.”

The town of 3,500 people has been struggling with its own energy crisis as its sole source of natural gas dried up, and the Mackenzie gas project stalled before providing replacement supplies. The irony of a town sitting atop trillions of cubic feet of gas facing a fuel crisis is not lost on Mr. Roland. However, Inuvik’s population base is not large enough to support drilling a new well just for home heating.

The mayor is studying gas-to-liquids technology that would make use of the reserves in the region, but in large enough quantities to supply other communities as well as yield diesel fuel. The highway would improve access to a plant and gas wells throughout the year.

Until then, a liquefied natural gas facility opened this month, allowing power to be generated from that fuel rather than what’s been burned as a substitute – more costly and carbon-intensive diesel fuel. Still, the liquid gas must be imported from the south.

In Inuvik, the new highway starts along Navy Road, where until recently industrial yards were packed with oil and gas equipment in anticipation of a drilling boom that was to accompany the development of the Mackenzie gas pipeline.

Last month, Imperial Oil, the project’s lead partner, told the National Energy Board it did not know when it might proceed, although chief executive officer Rich Kruger has already said Mackenzie reserves could eventually be developed as part of a multibillion-dollar liquefied natural gas project that encompasses other gas holdings in Canada. It would be several years off, though – if it happens at all.

The Inuvialuit are partners in the Aboriginal Pipeline Group, set up to own a one-third interest in the pipeline along the Mackenzie River Valley to southern markets, now estimated to cost at least $20-billion. The delay has brought disappointment as they, along with the Gwich’in and Sahtu people, had counted on jobs, business opportunities and a revenue stream from the ownership stake.

The regulatory review took six years to complete and, in that time, the natural gas market changed with the evolution of hydraulic fracturing technology and development of massive shale gas reserves located much closer to consumers. The lack of a hard deadline to complete the review was the main problem, said Nellie Cournoyea, CEO of Inuvialuit Regional Corp. and herself a former NWT premier.

Now, an all-weather road offers opportunities to move past the experience and seek out new development and employment ideas, Ms. Cournoyea said. It also will allow her people to become less reliant on the social safety net.

“The Inuvialuit are used to working and having an opportunity to work. When you take that opportunity to work and expand your horizons, you’re really creating an attitude towards how far you can go in life. Inuvialuit have been explorers and travellers for centuries, without government support until a short number of years ago, that’s the way we lived. I lived that way,” she said.

“The world is getting very small, and the Arctic is such a fundamental part of the evolution of where Canada’s going to go that we have to be prepared to make sure we’re involved with that, and we’re able to contribute towards that, because we’re not only Inuvialuit but we’re Canadians as well.”

Still, some warn about the loss of traditional culture in the Far North, where hunting and trapping had long produced the main food sources and generated export income. It remains an important industry.

Robert Alexie, president of the Gwich’in Tribal Council, said his people will enjoy some of the economic benefits along with the Invialuit as more tourists travel to the Beaufort via the Dempster Highway and then along the new route. The Gwich’in settlement region borders that of the Inuvialuit.

However, the Dempster, the route opened in 1979 that runs to Inuvik from Dawson City, Yukon, changed life in the region forever and, he said, its shows a big risk that the Inuvik-to-Tuktoyaktuk project brings.

“Before we had the Dempster Highway, our people used to go up into the mountains with their snowmobiles, their dogs, spend a couple of days going up, a couple of days hunting and a couple of days coming back, “ Mr. Alexie said at the Gwich’in office in Inuvik.

“Today, they go up before supper, take an hour or an hour and a half, another hour to hunt and another hour to get back home and it’s done. It takes away. We’re having a lot of problems now with our young people over-harvesting, harvesting indiscriminately, wasting meat.”

But the trade-off is prospects for resource development and expended tourism that could keep more young people at home, especially if the activity spawns education opportunities. The Arctic road could be a catalyst for that, Mr. Alexie said. The trick is ending the cycle of boom and bust.

“It will bring in more exploration. But we have to get off our collective butts and find a way to export the natural resources in this region,” he said. “We have oil and gas up there and it’s not getting anywhere. We have to get it out.”

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