Rocks, crude will fuel the future of Nunavut: conference board

The Meadowbank gold mine, near Baker Lake, is seen in late winter, 2010. The mine, as well as mineral exploration, are the main drivers of Nunavut’s economic growth, according to a report released last week by the Conference Board of Canada’s Centre for the North. (FILE PHOTO)

Mining and fossil fuel extraction are the industries that will drive future economic growth in the North, according to a new study from the Conference Board of Canada.

The growth of those industries will in turn drive the development of electrical generation and new transportation industries, says Mapping the Economic Potential of Canada’s North, released Dec. 17, by the board’s Centre for the North.

“These primary industries also drive growth in other sectors of Northern economies, including communication, electricity and transportation infrastructure, and commercial services,” Len Coad, director of environment, energy and technology policy at the Conference Board of Canada, said in a news release.

“They can contribute to the prosperity of northern communities by providing jobs and supporting local businesses.”

In Nunavut, the mining industry is the engine pulling the rest of the territory’s economy behind it.

The existence of just one gold mine —Meadowbank near Baker Lake —has already generated enough business to drive Nunavut’s economic growth to over 10 per cent this year. And with hundreds of millions of dollars being spent on mineral exploration in Nunavut—$281 million in 2010—the Conference Board expects the mining industry here to continue to grow.

But hindering the mining industry is a lack of skilled workers.

Nunavut’s workforce needs access to more training, and the remote location of many sites can make it hard to attract southern workers.

The industry is also held back by long construction times and high costs driven by a lack of infrastructure.

“The viability of many mines in Nunavut depends directly on transportation infrastructure,” the report states. “Mineral development projects in the territory usually include building roads, railways, airstrips, and-or ports; these substantial costs can keep a resource deposit in the ground.”

Still, the Conference Board expects high prices and demand, recovering since the recession, will drive mining growth in the North.

Despite large amounts of oil and natural gas predicted to lie within the Arctic, Nunavut has very little in the way of proven reserves.

The Conference Board report predicts fossil fuels will continue to mean big business in Northern Alberta and British Columbia. With the National Energy Board’s decision last week to allow the Mackenzie Valley natural gas pipeline, the Northwest Territories’ energy sector could start to grow rapidly.

But in Nunavut, there’s little sign that any of the territory’s natural gas reserves will be developed soon.

Citing figures from the NEB, the report states that Nunavut is home to an estimated 1,300 billion cubic metres of gas, mostly in the High Arctic islands, with some in the Hudson Bay region.

Some 331 billion cubic metres of proven natural gas has been discovered in the High Arctic. But the report’s authors are skeptical that any of it will be drilled soon due to the remote location and hazards caused by climate and ice.

And given the heavy opposition mounted to scientific seismic testing in Lancaster Sound by environmental groups and Inuit birthright organizations, it’s likely that High Arctic gas would not be developed without a serious political fight.

Meanwhile, the report states that obsolete and expensive diesel power generation acts as a drag on Nunavut’s economy. The average price of power in Nunavut is 46 cents a kilowatt-hour — more than five times the national average.

And federal infrastructure spending promises a major boost to Nunavut’s construction industry, which made up 25 per cent of Nunavut’s gross domestic product in 2008, although Nunavut still struggles with a lack of skilled trades workers, meaning many construction jobs still go to imported labour.

The Conference Board findings also indicate that Nunavut is the only area of the Canadian North that can expect to see significant growth in the fishing industry.

In May, a senate committee recommended Nunavut and Fisheries and Oceans Canada pursue the creation of a commercial Arctic Char fishery centred in Cambridge Bay. Nunavut’s turbot fishery continues to grow, and the construction of a dock in Pangnirtung offers hope for more growth in the future.

The report says Nunavut’s tourism industry also has strong growth potential, but is held back due to a lack of infrastructure and inconsistent quality.