Spending more than a billion dollars to upgrade the NWT’s power infrastructure will benefit all of Canada, the territory is telling provincial partners.
Last week, the territorial and federal governments announced a first, small chunk of cash to begin planning work for an expansion of the Taltson hydro system – which, if eventually connected to the south, could provide cheaper, cleaner power for residents and mines.
Completion of the project relies on hundreds of millions of dollars in federal cash.
“This is a nation-building project,” NWT industry minister Wally Schumann said he had told provincial counterparts.
“We’re continually trying to educate these people down south, not just the federal ministers but everyone in general, that a billion dollars may be spent in Miramichi… the effect that’s going to have on the population of Canada is totally different than what a billion dollars spent up here would do.
“I think the return on investment in northern Canada, not just the Northwest Territories but us and Nunavut, has a far wider reach.”
Schumann and almost the entire NWT cabinet are in Vancouver this week for the annual Roundup mineral exploration conference.
The trip sees a few dozen territorial government staff accompany ministers in a week-long attempt to sell investors and companies on the prospect of doing business in the NWT. In recent years, attending Roundup has cost the NWT around $200,000 to $250,000 per year.
“To me that is irrelevant,” said Schumann. “We’ve made the case many times that this is very important to the residents of the Northwest Territories and our economy.
“The mining industry is 25 to 30 percent of our economy and we need to continue to push on that. We need to have some more new mines in the queue.”
The NWT is focusing its efforts on junior mining companies at this year’s Roundup.
Below, you can listen to Cabin Radio’s interview with Wally Schumann in our Lunchtime News podcast or read the full transcript.
This interview was recorded on January 24, 2019.
Ollie Williams: You must have enjoyed yesterday’s announcement. It’s $1.2 million. The price tag’s a billion plus. What does that actually do for the project?
Wally Schumann: Instead of hope, now we’ve got some actual cash going towards this thing so we can actually start to have a serious look at this thing.
You say ‘start have a serious look at this thing.’ I mean, the GNWT’s been having a serious look at it for years, hasn’t it?
Well, there was some technical work done previously, and how to supply the diamond mines. But as we know that all went away to the wayside. We’ve revamped this thing and the political landscape in Canada is totally different from those days. And same with the Northwest Territories. So I think there’s some logic to us doing this at this present time.
You say the political landscape’s different. The federal northern affairs minister made it sound like he thinks this whole thing is going to get built with federal help didn’t he?
They are pretty bullish, I think, on the whole concept of… when you look at the federal mandate, what they’re trying to achieve, this fits right into their bailiwick. So it makes sense for them.
Presumably you’ll be voting Liberal at the next election?
Maybe I don’t even vote. I’m not gonna say, one way or the other.
So what’s actually going to happen next with this? We talk about it being just over a million dollars, there is some preparatory work this is going to fund. Yesterday, the federal northern affairs minister, Dominic LeBlanc, explained that that was essentially a fiscally driven announcement as much as anything – they needed to get the money out by the end of the fiscal year. That is some very basic work. What are we going to see in the next fiscal year, do you think?
It’s gonna take some time and some money. We have a three-year plan laid out of how we want to get this thing to a position where it looks like it’s fundable, and what type of contributions are going to be taking place to be able to make this a reality for the people in the Northwest Territories and the Indigenous governments that are going to participate. But there’s a number of things that have to take place here to do this and the first one is some of the technical work, dust off some of the stuff from the previous work that was done.
And we do have to figure out the routing. We’ve talked in the press about the underwater cable that we got to do across Great Slave Lake, get that study back and see where that all lies – it’s a lot of work in the next three years to get all this together to come up with a business case and how we can work together with the Aboriginal governments to be able to have something we can take to the bank and finance this thing.
I understand that you need a long time to go through things like underwater engineering, but when you talk about the business case – the business case is bloomin’ obvious, isn’t it? You need three minutes, not three years.
We want to join the south and north grids, for sure, for some certainty around power supply, but also try to grow the economy at the same time. We believe there are some potential industrial customers and this project will help move their projects along and stir economic development in the Northwest Territories. To your particular question, you know, it does make a lot of business certainty going forward. But when you’re the guy shelling out a billion dollars, you’d better have your ducks in order.
Lastly, before we move on, I thought there was a good question yesterday around the necessity of having a mine as a customer before this goes ahead. How key is it to the building of the Taltson hydro expansion and the execution of that project that there is a paying customer diamond mine or any kind of mine waiting at the other end? And that you have someone prepared to give you a yes on that in the next few years?
We have a number of mines that are already in the queue there and rolling forward with their projects. Power is essential to every mine in the Northwest Territories. Depending on where you’re located – say, in this particular case, depending on the routing, Pine Point Mine is a potential customer, and they’re continuing to drill on their project to bring that thing to a feasibility study. TerraX is right outside the city of Yellowknife. So those two are right close to the system, that would potentially come on to this thing right away.
But the long-term view of this thing is join both grids, hopefully bring on a couple of those customers at that present time, but also the second part, as I said yesterday, was to grow the economy through the Slave Geological Province. Why I continually bring this up with all my federal provincial, and territorial partners across the country is to educate them that with the richness of the Slave Geological Provinces, it’s no different than the transmission line they’ve built in northern BC. It was pretty much laid out there, it did connect some smaller communities that didn’t make economic sense just based on those communities, but they built that power line to attract mineral potential in that area as well.
So I’ve made the case to all the whole bunch of different ministers across this country that this, potentially, can drive not just the Northwest Territories economy – because if we build a mine in the NWT, it also benefits everybody in the rest of Canada via jobs or production or building these things. This is a nation-building project.
I feel like there are 13 infrastructure and industry ministers who all try that trick at these meetings. I bet there’s a Newfoundland infrastructure minister saying, ‘A few more fish plants, it’ll be a nation-building project…’
Actually, you’d probably be surprised. I’m probably one of the few ones that will speak out about nation-building projects at some of these things.
The biggest part of the population is within 200 miles of the border. That’s where they spend a lot of money. That’s where the votes are. But we’re continually trying to educate these people down south, not just the federal ministers but everyone in general, that a billion dollars may be spent in Miramichi… the effect that’s going to have on the population of Canada is totally different than what a billion dollars spent up here would do.
I think the return on investment in northern Canada, not just the Northwest Territories but us and Nunavut, has a far wider reach of impact on return on revenue.
How key to getting Taltson built is it that you convincingly get that message across?
Well, it’s a big part of it. When we first started this legislative assembly we were pushing hard on the [all-season road to the] Slave Geological Province. But as we started rolling down the road around greenhouse gas emissions and and the pan-Canadian framework, it clearly made sense that to really attract true investment and be able to do it in a meaningful, environmental way, that Taltson should probably be the priority. And that’s what we’ve been pushing now.
Let’s shift topics. We’ll talk a little bit about Roundup. This is the annual mineral exploration conference, it starts on Sunday in Vancouver. Just remind people what this is, what it does, and why the NWT goes to this.
It’s a very important mineral show. A number of junior mining companies attend this thing, and this is where we go make our presence. We’ve made it very clear in the 18th legislative assembly that all of cabinet’s been down there pushing for investment in the Northwest Territories to unlock the potential.
The biggest thing, and I’ve said it for the last three years in a row, is global cash that’s out there in the mining industry is very tight. Most of the money’s gone to other things, could be tech, could be cannabis, these sorts of things. So it’s a competitive market. And we have to make a significant presence here to be able to talk to these people and tell them why they need to invest in the Northwest Territories versus other jurisdictions.
Who are the most important people that you’re hoping to talk to while you’re there?
Well, we have a full agenda. We’re meeting with a number of juniors this time, some of them I have never even met, that have a significant investment and interest in the Northwest Territories. But also there’s a number of investors that are down there, those are very important for us.
What are you hoping to get from this?
We continue to have to educate people. We continually have to put our message out there about the Northwest Territories, about modern land claims, about the devolution agreement, our land and resource regulations for the NWT, our potential of partnering up with the Indigenous governments in the NWT – which have significant investment in their development corps in the mining industry – and how we can partner with all these people to work through the process to be able to develop a mine in the NWT.
What do you think makes the NWT an attractive proposition for an investor to come here?
Well, I think as a jurisdiction, we are a very safe environment to invest their money. We have a process that’s clearly laid out. We have the Mackenzie Valley Land and Resource Act, we have all the land claim groups that have their land claims that are settled – that are mostly in in the mineralization area. Our Indigenous partners are going to be down there with us, so if you need any type of information, or have any type of question, be it from the minister of mines, or the premier or the lands minister, we’re all there to be able to try to answer these types of questions and attract these people to the NWT.
You’ve already outlined the number of different cabinet ministers that will be there, I think it’s all but one. There’ll be some MLAs who are down there as well. Now you get hauled over the coals by the media on a regular basis for the cost and the number of people going to this, so let’s get that out of the way up front. How many people are going and how much is it gonna cost?
I don’t know how many people are going. I suspect it’s almost the same as it was last year, and the cost is probably close to the same as last year. To me that is irrelevant. We’ve made the case many times that this is very important to the residents of the Northwest Territories and our economy. The mining industry is 25 to 30 percent of our economy and we need to continue to push on that. We need to have some more new mines in the queue.
And so what can you point to from last year’s Roundup conference that proves this is a worthwhile exercise and it is making a difference?
Well, you know, what we do is, when we’re down there – and this year, our focus is a little bit different, we switched it up a bit. So normally we go down there and we meet with a whole bunch of industry players and, a lot of them are already existing here. This year, we’re focusing continually, specifically on junior mining companies, very early stage stuff and having a discussion with them and trying to educate them and other potential investors, other mining companies that want to look at a jurisdiction that has high mineral potential, and what’s it going to take to invest their money here? So that’s clearly our focus this time. But the question you had was, what did we learn from last year?
What made it worthwhile? What was the return on investment?
Well, if we were going to put it like this… I can’t put a dollar on it. But you know, we meet with these guys regularly. And some of these things are moving along quite well. TerraX is moving theirs along and Nighthawk Gold and Pine Point. There are going to be a couple of announcements when we’re down there on some of the stuff we’re going to be signing off that we’ve been working on for the last year. And so that’ll be interesting.
What can you point to from last year? Is there a meeting? Is there someone that you met for the first time? Is there an agreement that was made last year that you could point to and say, ‘Look, we did that. That’s why we were there. That’s what this delivered.’
Some of that stuff is going to be the announcements that we announce there. I’m not going to pre-empt that. This is an ongoing file, it goes on every day. But one of the biggest values I think, from last year was we brought all the Indigenous leaders with us. The feedback that we’ve got from them was they are very supportive of this trip. And they’re supportive of industry. And they clearly want to go down there and be able to explain to industry who they are and what they’re all about and what it’s going to take to participate on their land. So that’s probably the biggest benefit since last year,
Is there anything more important, in the mining industry right now, than increasing mineral exploration, again? Is that the number one target?
Well, this is a pretty large file. So there’s a couple things that we have to really pay attention to. You know, as I’ve said, the three diamond mines are all in different stages. Diavik is saying they’re going to be done at 2025. Dominion, we don’t know exactly what’s going on, they’ve pulled Jay off the table and are having another look at that thing. So that potentially could close way earlier than anticipated. Gahcho Kue was a 10 to 11 year mine and they’re already in their second year of it. So these things are coming quick, and some of these things are going to come in the next assembly, in the life of this government. So that’s on that side of it.
We’re trying to attract the very tight market that’s out there to invest in these types of projects. As I said, capital is going to all other types of things, industry’s in a tight spot, the geopolitical situation, the way things are going globally, China’s tightening up and we have to be out there in front of these things at all times, to make sure we try to capitalize on the minimum of capital that’s flowing out there. So this is an important file to keep an eye on and as we’ve said a number of times, we continue to say it, it’s 25 to 30 percent of our GDP, so it’s important to a lot of people in the Northwest Territories.
You talk about the mine life and the mines that will close in the next decade. Mineral exploration is the science of finding the next mines. And if we look at federal government figures released towards the back end of last year, they projected a $5 million drop, again, in mineral exploration expenditure in the NWT. The trend seems to be downward. How critical is it? And is there any evidence to suggest that that will turn around in the near future?
We’d certainly like to see more investment, especially in exploration. I think there’s going to be some clarity around how the rules are going to be laid out in the new Mineral Resource Act when we get this thing through this life of this assembly, so that’s going to certainly help. But as I’ve said, cash is tight out there. We’re continuing to work with our federal partners and our Indigenous partners, in particular, to be able to grow our infrastructure. It’s one of our biggest deficits that we’ve got around some of this stuff. And for us to really capitalize on it, I think we need a significant investment from our partners with the federal government and working with our Indigenous partners: how to do the Taltson and the Slave Geological Province.
The Whatì road is certainly going to help, I think, and open up that part of the country. So that’s moving forward. Hopefully by next year this time, if we’re sitting here and I’m the minister, we will be talking about construction on the Whatì section. And, as maybe the listeners don’t quite know, we had the second round for the National Trade Corridors Fund for the three northern territories that just closed off there a week ago. And we did our submission again for the Slave Geological Province. We’re hoping to hear on that by probably springtime.
What are the odds of the federal government funding Taltson and the Slave Geological Province? I mean, I realize it may be different funds, but that’s going to be a whack of money, isn’t it?
Yeah. But depending on how you finance these things that might not be all coming from the federal government. It could be a portion of it from them, a portion from us, a portion of equity from industry, and maybe the infrastructure bank. So there’s a whole bunch of different ways to look at that. And as I’ve said, Ollie, clearly anything that benefits the Northwest Territories is going to benefit this country as a whole. So I think if we can get some of these things through, it’s going to help drive the Canadian economy, not just the NWT.
To what extent is your job as minister for your portfolios just to hang in there and show a face and keep meeting people until such time as a Taltson or a Slave Geological Province is signed off and you actually have something to shout about?
Well, we’ve been working very hard, you know. I give kudos to my staff in both departments all the time, the last three years, we’ve put in a lot of effort to be able to bring what we have done to the Northwest Territories. We’ve brought in over a billion dollars of federal investment to help us try to grow the NWT economy. And that’s not just me, I’m just a spokesman for the government of the NWT as far as I’m concerned. And part of my job is to talk to the federal government and try to do that. But the staff have put a tremendous amount of work into this, in both departments, and with the federal funding that we have received, there’s a lot of work that’s going to be rolled out in the next 10 years in the Northwest Territories to try to drive our economy.
So I think we’re on the right path. The way the federal government’s been talking these days to us around how we’re going to develop the North, I think they are certainly on-side. They are clearly getting the message now, and we’ve got some champions, I think, within the federal cabinet of Mr Trudeau’s government that are actually having a serious look at how we can grow the economy in the NWT.
Will it transform your job if Taltson goes ahead?
I don’t know if it’ll transform my job, but, you know, I think it’s going to be – whoever’s in that seat down the road – if we get Taltson done it’s going to have a whole different look at this thing, compared to what we’re doing. Instead of chasing dollars, you’re going to probably be trying to figure out which dollar you want invested here.