Yellowknife needs to find extra $23M for critical new water pipe

The City of Yellowknife says the cost of a new underwater pipeline to its municipal water source has risen from $34 million to $57 million in the four years since federal funding was received.

The city has almost $26 million in federal cash from a disaster mitigation fund to put toward the pipeline from the Yellowknife River to its treatment facility. Initially, that left the city with $8 million to find.

But a fresh assessment of the project puts the bill at $23 million more than was first thought in 2019, before the pandemic and various global supply chain issues.

Under its agreement with the federal government, the city has to find all of that extra cash – a total of $31 million once you add the cost increase to the initial $8 million.

City councillors are set to discuss the new estimate on Monday. Municipal staff want to push the project’s completion date back from 2028 to 2032, providing four extra years to find the cash, ideally from another level of government.

The City of Yellowknife has, for example, long maintained that a large chunk the pipeline’s cost should be borne by the federally led Giant Mine remediation project. The threat of arsenic contamination from the toxic former gold mine is a major reason for requiring an 8.5-km pipe running all the way to the Yellowknife River, well away from the mine site, rather than simply taking water from the bay next to the treatment plant.

Funding was released from a federal disaster mitigation program after the city presented the ageing pipeline – it was built in 1969, making it more than half a century old – as “one of the number-one concerns residents were facing.”

A report prepared for the City of Yellowknife in 2017 argued an accident at the site of Giant Mine – which contains 237,000 tonnes of toxic arsenic trioxide, a gold mining byproduct – could contaminate Yellowknife’s water supply if the city chose to draw water from Yellowknife Bay, which borders the mine, instead of replacing the Yellowknife River pipe.

Initially, construction had been expected to start next year.

The city says it isn’t alone in facing huge increases in the costs of infrastructure projects.

According to a briefing note prepared for councillors, federal officials told the city “project schedule extensions were being granted across Canada to 2032” and many similar applicants “are seeing significant cost overruns and schedule challenges.”

“Administration has determined that the appropriate path forward at this time is to seek a project schedule extension to 2032,” the briefing note adds.