How a 2024 payment dispute may help the NWT’s snowy highways 

The company contracted to maintain the Inuvik-Tuktoyaktuk Highway and the NWT government disagreed over the terms of their contract during record snowfall and extended highway closures in the winter of 2023 to 2024.

That winter, the Inuvik region saw upward of two times more snow from October to December than previous winters. Stormy conditions along the highway caused multiple closures, including one that lasted 15 days in February 2024 and left Tuktoyaktuk running low on food and medical supplies. 

For months leading up to and throughout that closure, the NWT government and EGT Northwind Ltd, the contractor responsible for highway maintenance, fought about whether the company should be paid more for work to remove snowbanks. 

While the territorial government argued this work was part of the existing contract, EGT Northwind’s position was that it should be considered extra work, according to emails obtained through an access to information request.

“The contractual terms were somewhat ambiguous,” Russell Newmark, EGT Northwind’s chief executive, told Cabin Radio in an interview. The company had to clear the centre of the road, he said, but it was unclear who was responsible for the snowbanks. 

One low-lying section of the road is particularly prone to snowbanks, Newmark said. If the snowbanks aren’t cleared, wind quickly causes the road to fill back in. But clearing the banks is also a huge amount of work.

“There were snowbanks there that were 20, 30, 40 feet high,” Newmark said. “You’re not going to knock them down in a day.” 

The disagreement led EGT Northwind to file a contract dispute with the Department of Infrastructure in 2024.

A third-party arbitrator ruled in the company’s favour, according to Newmark. The company was paid $166,000, which covered the majority of the extra work.

“We were more than satisfied with the result,” he said, adding there is no lingering bitterness between the parties. 

EGT Northwind has since entered into a new three-year contract to maintain the Inuvik-Tuktoyaktuk Highway – this time with more clarity on the issue of snowbanks. 

In the new contract, EGT Northwind is paid a lump sum to open the road two lanes wide. If there is a need to knock down snowbanks, Newmark said it’s paid hourly at the direction of the GNWT.

This clarity has meant the team is better able to respond to severe weather when it arises, Newmark said.

This winter, the region is again seeing a lot of snow. Conditions on the Dempster Highway have been particularly challenging. Extensive closures on the Dempster have caused Fort McPherson grocery stores to struggle stocking their shelves, Inuvik to run low on fuel, and a trucking company serving the region to question the viability of future operations.

On the Inuvik-Tuktoyaktuk Highway, weather conditions this winter are not quite as bad as they were in 2023-24, according to Newmark. So far, road closures have not been as lengthy either. Aside from a 12-day closure in December, the road has only been closed for a few days at a time.

“We went at it quicker and got the road open quicker because there was that certainty in the contract,” Newmark said.

Snowbanks worsened by road subsidence, heavy snow

Though Newmark described the disagreement with the GNWT as “business as usual,” emails obtained by Cabin Radio show a tense exchange that lasted for months. 

In October 2023, a staff member from the Department of Infrastructure asked EGT Northwind to remove snowbanks that were “not in keeping with contract requirements.” The staff member wrote that high snowbanks left unattended cause longer highway closures and more difficulty maintaining the full width of the highway throughout the winter.  

Newmark responded that the snowbanks off the highway were not in breach of the contract. He added: “It is ‘unheard of’ for large snowbanks to be present on any roadway north of Inuvik in October.” 

As the snow kept falling and highway conditions worsened, the disagreement continued. 

In December 2023, the Department of Infrastructure told EGT Northwind to have the snowbanks removed at cost to the company. 

Meanwhile, EGT Northwind argued the snowbanks were the result of the GNWT’s unwillingness to undertake required highway upgrading.

In a January 1, 2024 email, Newmark asserted that the snowbanks were present along a section of the highway where the GNWT decided to reduce the height of the embankment as a cost-saving measure when the road was built. He referred to a technical memo from design engineers, which warned that reducing the road’s embankment would make it more susceptible to damage from permafrost thaw. 

As predicted, this section of the road had settled and slumped, Newmark wrote, but no upgrading or rehabilitation had occurred since the highway opened in 2017. He added that the thin section of the Inuvik-Tuktoyaktuk Highway (ITH) is lower than the surrounding terrain, which creates tunnels that accumulate snow. 

“The conditions created by the settlement and slumping of the ITH have been magnified exponentially by a dramatic increase in snowfall,” Newmark wrote. 

In a January 12, 2024 email to the GNWT, he continued: “All Governments understand that extreme weather events and natural disasters result in additional costs to Government. The GNWT accepted additional costs related to recent flooding in Hay River and fires along the highways leading into Yellowknife and didn’t require contractors to absorb these costs themselves.”

In early February, a GNWT staff member told Newmark the department was willing to compensate EGT Northwind for the additional equipment mobilized to address the urgent situation.

Within a few days, however, the GNWT reversed course. 

On February 7, 2024 – five days into the 15-day closure – Newmark requested confirmation that the company would be paid for the additional work. 

“We need your confirmation of this agreement as we are not prepared to continue working with this massive fleet of equipment and then have the GNWT not honor your agreement. Please confirm within the next 24 hours or we will be forced to stop work until this is confirmed,” he wrote.

Newmark later emailed then-infrastructure minister Caroline Wawzonek, requesting that the department honour their commitment. He also clarified that EGT Northwind had not threatened to halt the highway’s reopening. 

“We never stopped working clearing snowbanks,” he wrote on February 20, 2024. 

Looking back, Newmark told Cabin Radio he thinks the situation simply came down to government staff being focused on staying within their budget. 

“They’re very, very financially constrained,” he said of the territorial government.

He added that the larger thinking about climate change and extreme weather is “not really there” at the bureaucratic level. “If you get a big fire somewhere or a flood or a snowstorm, everybody’s in a tizzy because they don’t have the money for it,” he said. 

During the 15-day highway closure in 2024, then-mayor of Tuktoyaktuk Erwin Elias – like Newmark – compared the extreme snowfall to fires and floods. 

“Does snow count as a natural disaster, or is it different?” Elias said at the time.

According to the territory’s Department of Municipal and Community Affairs, snow or wind can count as a disaster under the GNWT Disaster Assistance Policy in certain circumstances.

The 15-day highway closure did not meet the criteria for a disaster, however, because “the event did not threaten loss of life, injury, widespread property damage, or economic disruption,” the department recently told Cabin Radio via email.

In an emailed statement, the Department of Infrastructure said all outstanding payments were made to EGT Northwind following the dispute resolution process.  

“Snow clearing along the ITH during extreme weather events can be challenging,” a spokesperson from the department wrote.

“Under the current contract, additional equipment can be deployed as required, which strengthens our ability to respond to changing and severe weather conditions.”

Newmark echoed this sentiment, saying that the current contract minimizes costs for the territorial government while covering the need to deal with snowbanks when needed. 

While he’s satisfied with the contract, he said the bigger issue is that the NWT government often doesn’t have enough funding to maintain infrastructure.

“You get the capital money to build something,” he said. “But the money for the operation and maintenance to keep it in that condition oftentimes doesn’t follow.”