After Ottawa denies funding, Nunavut government pulls out of Grays Bay road and port project

Canada's federal government turned down a request that would've seen it find 75 percent of the CA$500-million project.

By Jim Bell, Nunatsiaq News - April 16, 2018
The Grays Bay dock site on Coronation Gulf. A road and port construction plan suffered a blow when Canada’s federal government turned down a major funding request. (Grays Bay Road and Port via Nunatsiaq News)

If the ambitious Grays Bay Road and Port project is ever built, the Kitikmeot Inuit Association will likely have to get the work done on its own.

That’s because the Government of Nunavut will now pull out of the project, following a decision by the federal government to reject a funding proposal that would have covered 75 percent of the project’s approximately CA$500-million price tag.

“I have full confidence that the Kitikmeot Inuit Association has the ability and vision to see this project through to its completion,” Joe Savikataaq, the Nunavut minister of Economic Development and Transportation, said yesterday in a terse news release announcing the GN’s pull-out.

The GN and the KIA “jointly agreed” that as of this month, the KIA will become “the sole proponent of the Grays Bay project in future NTCF [National Trade Corridors Fund] submissions,” the GN said.

A KIA-owned subsidiary company, the Nunavut Resource Corp., teamed up with the GN in 2016 to promote the Grays Bay scheme, bragging that it’s a “transformative project with significant national benefit that will help to define northern economic development throughout the 21st century.”

They sought money from the federal government’s National Trade Corridor Fund, which provides CA$2 billion over 11 years for transportation projects across the country.

But only $400 million of that is dedicated to the three northern territories.

In the Grays Bay proposal, the GN and the KIA pitched a 227-kilometer (141-mile) all-weather road running from the site of the defunct Jericho mine, which is located at the northern end of the Tibbit-Contwoyto winter road, to a deep sea port at Grays Bay on Coronation Gulf.

That would provide access to valuable mineral properties in the western Kitikmeot, especially the rich zinc, lead, copper and silver properties, worth at least CA$10 billion, controlled by MMG Ltd. at High Lake and nearby Izok Lake.

MMG, however, has said it’s not economically feasible for them to develop those potential mine sites and build a transportation system on its own.

As a result, those properties have been mothballed since 2013, when the company suspended its environmental assessment application with the Nunavut Impact Review Board.

And MMG Canada’s president Sahba Safavi told Nunatsiaq News this past August that unless a transportation system in the region is funded, they won’t move on the project.

“Until the project is considered economic and the infrastructure issue is resolved, we cannot advance to the next step, which would be revising our project proposal—and which is a crucial step before re-initiating the regulatory approval process,” Safavi said last year.

“Should funding for the GBRP be approved, we would work with the Government of Nunavut, the KIA, regulators and local communities, so that we can begin the process of revising our project proposal.”

For its part, the GN said it continues to support the project in principle, “and will monitor developments of the GBRP and provide support where applicable.”

The GN has spent at least $2 million on Grays Bay already, to pay for permitting activities.

This past January, Northern Affairs Minister Carolyn Bennett, following a screening recommendation from the NIRB, ordered a full environmental assessment of the project, with public hearings.

That assessment is still in its early stages. The NIRB is still working on figuring out the scope of the draft environmental impact statement that the KIA will have to provide before regulators can take a close look at the project’s social and environmental impacts.

Any delay in building Grays Bay casts a dark cloud over a long-sought-after dream in the Northwest Territories: a road from Yellowknife to the Arctic coast.

A second phase of the Grays Bay road, not part of the current proposal, would run from Jericho south to the Nunavut-N.W.T. border, where it would connect with a road to Yellowknife that the GNWT hopes to build one day.

An economic assessment of the project done for the Nunavut Resource Corp. by Impact Economics of Yellowknife, estimates the Grays Bay price tag at $527 million.

But the study also said the project could become “a potential watershed” for Nunavut, because it would unlock known mineral resources that have been stranded for decades.