The federal government is stepping in to pay for most of the cost of replacing Yellowknife’s drinking water pipeline.

Ottawa is contributing $25.8 million to replace the 8.5-km pipeline from the Yellowknife River to the city’s water treatment plant, which allows Yellowknife to avoid drawing water from the region of a nearby, toxic former gold mine.

The project will still cost the City of Yellowknife nearly $9 million, but the federal investment appears to significantly relieve the City’s stretched budget at a time when it is juggling two major projects: the new drinking water pipe and a new aquatic centre.

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Together, the two projects are estimated to cost more than $80 million.

Yellowknife’s mayor, Rebecca Alty, called Wednesday’s $25.8-million grant “one of the biggest funding announcements we’ve ever received from Canada” and “one of the number-one concerns residents were facing.”

Alty told Cabin Radio the City was “still chasing” more funding to cover the remaining $9 million. That could mean other federal funds, the territorial government, or – if all else fails – taxes.

Alty said the grant “greatly relieves” pressure on the City’s finances.

“We were getting close to our borrowing limit,” she said. “We still have the water treatment plant [opened in 2015] on the books, plus this water submarine line, plus the pool.

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“Now we’ve got $28.5 million, we won’t be as close to the debt limit. I wouldn’t say that it frees up [money for the aquatic centre] but it definitely is helpful.”

Risks of the bay

The federal contribution is coming from a disaster mitigation and adaptation fund, on the grounds that if Yellowknife’s water pipe is not replaced, the city’s drinking water supply could be vulnerable to flooding.

A report prepared for the City of Yellowknife in 2017, by consultants AECOM, argued an accident at the site of the former 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 from the Yellowknife River.

The report said there was a low probability of such a contamination occurring, but it remained “plausible.”

Only once did that report mention flooding – in a paragraph suggesting remedial work in 2006 had reduced the risk of that occurring – though the failure of a pipe, a dam, or bulkhead at the Giant Mine site, contaminating the lake, was considered a “credible” scenario.

“If anything were to happen at Giant and arsenic comes into the water, then it would impact our drinking water for about three months, minimum,” if Yellowknife were drawing its water from the bay, said Alty on Wednesday.

Accepting that risk and pumping water from the bay instead of the river would be around $15 million cheaper, AECOM suggested in its 2017 report.

City councillors have still not officially decided which of the two options to choose – Yellowknife Bay or Yellowknife River – but the federal grant announced on Monday now makes the Yellowknife River option not only safer (according to AECOM) but significantly cheaper than it was.

That decision is expected in April. The mayor fully expects council to select the pipeline replacement as its preference, she said.

Some of the federal money will go to other initiatives, like helping Yellowknife to reduce greenhouse gas emissions and some work along the Yellowknife River to limit future damage from flooding.

Replacing the pipeline, however, is by far the most important aspect of the deal.

The current pipeline has been in place since 1968. There is no confirmed schedule for construction and completion of its replacement.

With files from Sarah Pruys

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