Quest for federal Mackenzie Valley Highway money hits speed bump

After two years of lobbying, the N.W.T. government's effort to secure $700 million in federal funding for the Mackenzie Valley Highway has hit a speed bump.

On Monday, Russell Neudorf, the territory's deputy minister of transportation, told Yellowknife city councillors that Infrastructure Canada's review of the funding request "has basically been put on hold."

The setback was met Tuesday with disappointment from some regular MLAs, who appeared surprised at the news.

The proposed highway would stretch from Wrigley all the way to the Dempster Highway, finally carving a complete transportation artery through the Northwest Territories.

But Neudorf said the Trudeau government is taking a fresh look at the project, which was originally pitched to the previous Harper government.

"Before they made their decision, the election came, so everything was put on hold," said Neudorf.

"We have had some discussions with the new Liberal government. But we hear the project has basically been put on hold while they do some more consultations and more definitions around federal infrastructure programs."

Oil and gas slowdown downgrading project?

Asked for further clarity on those "consultations and more definitions," Sonya Saunders, the director of planning, policy and communications for N.W.T.'s Department of Transportation, pointed to the federal government's "long-term infrastructure funding plan."  

"The federal government is currently implementing Phase 1, which was announced in the federal Budget 2016," said Saunders.

"Phase 2" — which is expected to total $48 billion — will be announced in next year's federal budget, and it's hoped that budget contains money for the Mackenzie Valley Highway.

But other comments made by Neudorf Monday suggest a political downgrading of the project.

He said the territorial government has yet to assign "the appropriate resources" for the proposed highway's environmental assessment, which has been stalled since early 2015.

And when asked by councillor Linda Bussey which of the territorial government's many infrastructure projects ranks as the highest priority, Neudorf said they're all priorities, but added, "In the past, I think there's been a lot of political priority over the Mackenzie Valley Highway. It's got a strong community connection.

"But there was lots of oil and gas development there and that's dried up. I'm not sure when that's going to come back.

"There's certainly big discussions about what this government can do to help encourage the economy of the N.W.T. now. So I do see [the proposed corridor into the mineral-rich] Slave Geological Province as a bit more of a desire to move forward to be doing something in that regard."

The Slave Geological Province, where N.W.T.'s diamond mines operate, is currently accessed by air or winter road.

Whati road project most advanced

Neudorf also gave brief updates on the Inuvik to Tuktoyaktuk highway and the proposed all-weather road to Whati.

The $300-million highway to Tuktoyaktuk is still expected to open in the fall of 2017, after some summer 2017 construction work to finalize the grading and install the road's gravel surface.

Neudorf characterized the Whati road as the most "advanced" infrastructure project besides the Tuk highway. The territorial government submitted a public-private partnership (P3) proposal to P3 Canada six months ago.

Neudorf also appeared to express disappointment with one recent setback to the Whati project.

"We had been making lots of good progress on that and then, on July 27, we were referred to environmental assessment," he said.

He said the Wek'eezhii Land and Water Board thinks the assessment could take as little as six months, but called that timeline "pretty ambitious."

Still, he said his department is hopeful the assessment could wrap up by the end of this year or by early 2017.

"That might line up well with getting some funding from P3 Canada and our own government making a decision about support for this project," he said.