Federal budget pledges to fully fund Mackenzie Valley Highway

The federal government’s fall budget commits to fully fund construction of the proposed Mackenzie Valley Highway as well as some costs of maintaining the 800-km all-season road.

The budget earmarks $3.1 billion for the highway between now and 2031, which is the expected construction period.

That funding comes in addition to $405 million announced for the project in September through the Arctic Infrastructure Fund. Ottawa has also contributed smaller sums of planning cash in the past.

The Northwest Territories has been pursuing this kind of all-in funding commitment for decades.

A day before the budget, former premier Bob McLeod complained that the only cash his government ever saw for the Mackenzie Valley Highway was “piecemeal” in nature.

Fort Smith-born Prime Minister Mark Carney’s second budget, released on Thursday, states Ottawa will also fund some maintenance costs associated with the highway – though how much remains under negotiation between the federal Major Projects Office and NWT government.

Harsh winters in the North exacerbate wear and tear on all infrastructure, while permafrost heave is a uniquely northern challenge that needs frequent attention on many highways.

A Cabin Radio analysis of recent NWT budgets suggests the territory expects to spend about $20,000 on routine maintenance per kilometre of all-weather road each year, not counting major repairs. (The NWT’s Department of Infrastructure did not confirm that figure or provide an alternative when approached.)

For the Mackenzie Valley Highway, that could amount to around $16 million per year once fully built.

Budget proposes NWT major projects ‘entity’

Thursday’s budget also proposes $187.4 million over the next five years – and $24.2 million annually in future years – to launch and operate a major projects management entity that would support the Mackenzie Valley Highway and Taltson hydro expansion.

“This purpose-built organisation would have specialised technical and project development expertise to support certain projects, manage risks, and keep them on track,” budget documents explained.

The federal government is working with the GNWT to set up this entity, which will manage construction and delivery of the highway. More details are expected in the coming months.

NWT deputy premier Caroline Wawzonek first floated the concept of creating an agency to deliver the Mackenzie Valley Highway in late September.

More: Beyond major projects, what’s in the federal budget for the NWT?

Building the highway is part of Ottawa’s plan to unlock an economic corridor and “support an expanding Canadian military presence in the North,” the budget states. The highway will improve connections between Yellowknife and Inuvik, while reducing reliance on ferries. 

The highway would provide year-round connectivity to nearly 2,000 residents in the Sahtu communities of Norman Wells, Tulita, and Fort Good Hope, and give people in the Beaufort Delta a much shorter route to Yellowknife than the current trip via the Dempster Highway and Yukon.

Presently, some Sahtu communities are served by a winter road that opens for a couple of months each year. Otherwise, the only access is by air or river.

Claire McFarlane contributed reporting.