A Northern Transportation Strategy for Canada: Discussion Paper

Transcription

1 A Northern Transportation Strategy for : Discussion Paper Don Brownie Inc. October 2013

2 2 Introduction Northern is a vast region consisting of the three territories of Yukon, the Northwest Territories (NWT) and Nunavut. It is a dramatic and varied landscape with a rich native culture, unique plant and wildlife species and tremendous reserves of mineral wealth. In the future improved transportation access will enable the North to capitalize on its many assets to the benefit of its people, the northern economy and as a whole. However, with these benefits will come an important obligation to protect northern ecosystems, to accommodate the effects of climate change, to preserve native cultures and to safeguard s northern borders and its legitimate sovereign interests in the Arctic. It is noteworthy that the aboriginal people have taken an equity interest in many of the major business entities that provide transportation services in the North, thus giving them an even greater stake in the future of their development. This paper discusses the main considerations surrounding northern access as a suggested basis for a new northern transportation strategy. It is very timely with the recent conclusion of a devolution agreement between the federal government and the NWT, which transfers control over land and resource management and allows for greater sharing of resource revenues. A similar agreement came into effect for Yukon in 2003 and one has still to be negotiated with Nunavut. The Northern Setting The total population of s North all three territories - is in the order of 115,000 and population patterns vary significantly throughout the region. Yukon has a population of 36,000 but three-quarters of that number is concentrated in Whitehorse, its capital. The Northwest Territories has a population of 44,000 and Yellowknife, the capital, accounts for nearly half of this total. Nunavut has a population of 34,000 but its numbers are more widely dispersed in smaller communities throughout the territory, with its capital of Iqaluit accounting for 7,500. It is noteworthy that the location of many northern communities came about historically as a means of establishing sovereignty and facilitating federal administration. The present state of transportation development varies significantly across the North. In Yukon, there is a well-developed system of highways and roads, including the Alaska Highway, the Dempster Highway, the Klondike Highway and the Robert Campbell Highway. Old Crow is the only community without road access. A Northern Transportation Strategy for : Discussion Paper

3 3 In the NWT, there is a northern rail terminus at Hay River and a network of all-weather roads around the western end of Great Slave Lake that connects communities like Yellowknife, Hay River and Fort Smith and includes the Liard Highway that runs between Fort Nelson, B.C., and Fort Simpson and the all-weather Mackenzie Highway that extends north from the province of Alberta to Wrigley. In Nunavut, there are virtually no roads except in and around the communities and in specialized circumstances, like the all-weather haul road between Baker Lake (on the western end of Chesterfield Inlet) and the Meadowbank mine. Otherwise, the North is dependent on winter roads, the annual summer sealifts, Mackenzie River tug and barge service and year-round air transport supported by an extensive system of regional and community airports. A number of road improvements have either been completed or are in various stages of planning or execution. In Yukon, the historic Canol Road, a gravel facility that operates in the summer months only, extends northeast from Johnsons Crossing (near Teslin) to MacMillan Pass on the NWT border. An upgrade project is in the initial stages to improve the northernmost section between Ross River and MacMillan Pass, some 214 kms. Similarly, the Top of the World Highway (Yukon Hwy. 9) is a mainly gravel 127 km summer only road that traverses the Yukon-Alaska border between Jack Wade, Alaska, and West Dawson, Yukon. Most of its length is in Yukon and may be under pressure for paving if Alaska undertakes a similar improvement on its side. In the NWT, the Deh Cho Bridge across the Mackenzie River at Fort Providence was completed in 2012, which replaced the historic ferry service and winter ice road and enables year-round uninterrupted access to Yellowknife. Work has started on an allweather link between Inuvik and Tuktoyaktuk and study continues on extension of the all-weather Mackenzie Valley Highway north between Wrigley and Inuvik, presently only served seasonally by a winter road. In Nunavut, discussion continues on a proposed all-weather road that would extend north from around Churchill, Manitoba, and serve Arviat and Rankin Inlet on the west side of Hudson Bay A New Transportation Strategy A new transportation strategy for s north will provide a policy framework for improved access that will, among other things: Facilitate the development of the northern economy and create job opportunities for northern communities and aboriginal peoples while remaining respectful of native traditions. A Northern Transportation Strategy for : Discussion Paper

4 4 Take account of climate change and its effect on sea ice and permafrost and, in turn, Arctic shipping routes and road and airport construction. Address the importance of Arctic sovereignty and s need to access and protect its territorial interests in the North. Remain cognizant of the volatility of world commodity prices and their effect on the economics of northern resource development. Existing Transportation Systems The following discussion draws mainly on information contained in the report entitled The Northern Transportation Systems Assessment (2010), which was principally authored by Inc. for Transport. 1 In Northern transportation serves a number of important roles. It facilitates the re-supply of northern communities with fuel and dry-goods, including the federal government s Nutrition North (former Food Mail) program. It supports northern tourism and resource development. It is becoming increasingly important in facilitating access in support of s sovereign interests in the Arctic. And finally and very importantly, it enables social interaction, employment access and access to quality medical care for northern residents. Except for air transport and all-weather roads, northern transportation options are seasonal in nature. The advantages of marine transport are only available during the ice-free summer shipping season and winter roads and particularly winter ice roads are only sustainable during freeze-up although in both cases long-term climate change will affect the length of these operating seasons. For example, it will be recalled that the Tibbitt to Contwoyto Winter Ice Road experienced an early melt in 2006 that resulted in a costly airlift to complete the rest of the annual re-supply to the diamond mines in the Slave Geological Province. The existing northern transportation system is made up of the following sub-systems: Eastern Sealift Break bulk cargo and bulk fuel products from Eastern to Kivalliq (West Hudson Bay), Kitikmeot (Nunavut Arctic Coast) and Qikiqtaaluk (Baffin Region). Western Sealift Combination deck cargo and bulk fuel on Mackenzie River barges or ocean vessels from s west coast to the NWT and Nunavut Arctic Coast. Intermodal Systems Intermodal and bulk commodity hauls combinations of marine, rail and road - within Hudson Bay, the Mackenzie Valley and the B.C./Alaska Inside Passage. 1 Due to a lack of published statistical data for the North, most of our figures were drawn from surveys, interviews and in-house data bases, for which the current base year is A Northern Transportation Strategy for : Discussion Paper

5 5 Truck Transport An array of road transport capabilities ranging from a relatively extensive highway system in Yukon to all-weather highways extended seasonally by winter and winter ice roads in the NWT to virtually no roads at all in Nunavut. Air Passenger & Cargo Systems From gateway airports at Vancouver, Edmonton/Calgary, Winnipeg, Ottawa and Montreal to regional airports at Whitehorse, Yellowknife, Rankin Inlet and Iqaluit and then furtherance to community and resource airports beyond. Total 2009 freight volumes by transport mode and freight category are shown in Table 1. Table 1 Total Inbound Freight Volumes, 2009 (tonnes) Community Resource Bulk Re-supply Projects Fuel Total Sealift 61,000 38, , ,000 Intermodal 81,100 57, , ,100 Truck 534, , ,900 1,147,800 Air 20,000 2 In 2009, the three territories accounted for a total of almost 1.6 million tonnes of inbound freight traffic. The largest categories of freight were bulk fuel at 43 percent of total inbound volumes and community re-supply at 40 percent. By transport mode, the biggest share of traffic was carried by truck at 74 percent of the total most of this in Yukon and the NWT where roads are more readily available. Sealift: The Eastern and Western Sealifts re-supply coastal communities in Nunavut and the NWT where there are no road connections to Southern. Table 2 illustrates total sealift volumes by region in Based on general cargo plus Nutrition North (former Food Mail) volumes. Nutrition North is a federal program for airlifting perishable food and other essential items to remote northern communities at subsidized rates. A Northern Transportation Strategy for : Discussion Paper

6 6 Table 2 Sealift Volumes by Region, 2009 (tonnes) NWT Arctic Coast 14,974 Kitikmeot (Nunavut Arctic Coast) 83,641 Kivalliq (West Coast Hudson Bay) 100,012 Qikiqtaaluk (Baffin Region) 89,949 Table 2 shows that 95 percent of sealift traffic in 2009 was bound for coastal communities in Nunavut, including the west coast of Hudson Bay, the Nunavut Arctic Coast and the Baffin Region. The rest, about five percent, was destined for communities on the NWT Arctic Coast. This further reflects the absence of overland alternatives in Nunavut. Most of these coastal communities are not served by deep water ports only gravel push-outs to facilitate beach landings. Intermodal: Northern is also served by three intermodal transportation systems: Mackenzie Intermodal System Connecting Mackenzie River barge service, NWT roads at Fort Simpson and Inuvik and road and rail at Hay River. Hudson Bay Intermodal System Marine service connecting communities on the west coast of Hudson Bay to the railhead at the Port of Churchill. Inside Passage Intermodal System Connecting Yukon and Mackenzie Delta communities to marine service on the B.C./Alaska Inside Passage via Skagway and Haines, Alaska. In 2009, intermodal transportation accounted for total inbound volumes of 468,000 tonnes. Of this total over 80 percent was via the Inside Passage and Hay River. Bulk fuel accounted for 70 percent of total volumes. Truck: Truck transport in the North is supported by highway systems that only exist in Yukon and the NWT and are basically extensions of the Alaska Highway from British Columbia and the Mackenzie Highway from Alberta. A Northern Transportation Strategy for : Discussion Paper

7 7 Yukon has an extensive system of all-weather roads that branch from the Alaska Highway to include the Dempster Highway, the Robert Campbell Highway and the Klondike Highway. In the NWT, the all-weather Mackenzie Highway and adjoining systems are extended each year with winter roads between Wrigley and Inuvik and to Rae Lakes, the Slave Geological Province and other locations. In Nunavut, there are no all-weather roads capable of supporting long-haul truck transport, other than private haul roads like between Baker Lake and the Meadowbank mine. Table 3 shows total truck volumes for Yukon and the NWT in Table 3 Total Truck Volumes by Region, 2009 (tonnes) Community Resource Bulk Re-supply Projects Fuel Total NWT 163,000 48, , ,000 Yukon 371, , , ,800 Total 534, , ,900 1,147,800 It is noteworthy that community re-supply volumes in Yukon by truck were more than twice those in the NWT, whereas just the reverse is true with respect to bulk fuel movements. Air Transport: In the North the need for air service varies dramatically across the territories. In Yukon, where there is a fairly well developed road system, the need for air transport is not nearly as great as in Nunavut, where there are virtually no roads. Northern communities are served by a variety of aircraft, many of which are combi aircraft where both passengers and cargo are carried on the main deck, separated by a moveable bulkhead. The financial viability of many northern air services, particularly at smaller remote communities, often relies on revenue from both types of payload. Importantly, passenger revenue from mainline services between southern gateways and northern hubs, like Yellowknife and Iqaluit, can help to sustain service to remote northern communities through cross-subsidization. Passenger volumes in the North are dominated by government travel, estimated to account for up to two-thirds of total traffic. The Government of Nunavut, for example, has decentralized operations, with departmental functions spread across 11 different A Northern Transportation Strategy for : Discussion Paper

8 8 communities. While this separation is offset somewhat by advanced communications, it has nevertheless contributed to the overall need for air travel. Air transport also performs an important Medevac role for patients requiring treatment at regional or southern medical facilities. Yukon has 29 airports and aerodromes operated by the territorial government and three of these have scheduled service Whitehorse, Dawson and Old Crow. The Government of Northwest Territories also operates 27 airports and about two-thirds of these have scheduled service. There are 26 government operated airports in Nunavut and nearly all of these receive scheduled service. It is noteworthy that, of all these airstrips, only 10 have paved runways. There are a number of other airports, not operated by the territorial governments that receive charter or semi-scheduled flights. Other than some tourist destinations (e.g. fishing lodges), most of these are related to the resource industry and are used mainly for crew rotations and camp re-supply. Table 4 shows comparative passenger volumes for the regional hubs of Whitehorse, Yellowknife, Iqaluit, Rankin Inlet and Cambridge Bay. Table 4 Passenger Movements, 2010 E/D Passengers Whitehorse, YT 229,731 Yellowknife, NT 463,936 Rankin Inlet, NU 56,000 Iqaluit, NU 128,645 Cambridge Bay, NU 17,000 Sources: NWT Airport Statistics Report, Rankin Inlet Airport Master Plan (2010) and NWT Runway Issues Study Air cargo in Northern can be divided into three separate categories: Subsidized perishable food and other essential items moving to isolated communities under the Nutrition North (former Food Mail) program; General cargo that moves on a regular basis to communities as a coproduct of scheduled passenger service; Air support for major capital projects, mainly related to resource development. A Northern Transportation Strategy for : Discussion Paper

9 9 Table 5 shows air cargo volumes for the first two categories. Table 5 Northern Air Cargo Flows, 2009 (tonnes) Food Mail Cargo Total Nunavut 10,385 6,923 17,308 NWT 1, ,700 Yukon ,056 Total 20,064 It is noteworthy that Nunavut receives the bulk of the subsidized cargo, reflecting its disproportionate reliance on high-cost air transport for delivery of perishable goods to numerous communities that are not served by road. In addition, air cargo supports resource development and operations where there is an absence of all-weather roads and surface transport is otherwise very seasonal. In Yukon, a number of the operating mines are accessible by all-weather road. However, in the NWT and Nunavut access is much more limited, for example for the re-supply of the diamond mines where the Tibbitt to Contwoyto Winter Ice Road has an average life of 6-8 weeks. Future Transportation Demand In the future, there will be an ever increasing need for improved access in the North, driven by a growing re-supply requirement related to population growth and new base metal mine development that will generate increased exports of ore concentrates and imports of mining supplies. Population Growth Between 2006 and 2011 the population of the NWT experienced virtually no change. However, in the same period Yukon registered a growth rate of 11.7 percent, well above the national average and the highest in the country. This growth was largely explained by an above average birth rate and a high rate of in-migration. During the period Nunavut also registered one of the highest population growth rates at 8.3 percent. This was largely driven by a youthful population and the highest birth rate in the country, more than twice the national average. A Northern Transportation Strategy for : Discussion Paper

10 10 It is noteworthy that much of Northern s above average population growth is occurring in Nunavut - in widely dispersed communities where roads are non-existent. Consequently, these communities are increasingly reliant on the annual sealift and air transport for their growing household needs. In contrast, accelerated population growth in Yukon has caused pressure on an otherwise well-developed road system, for example on the Alaska Highway through Whitehorse, where most of the population resides. New Resource Development On the resource side, a number of mine developments are currently planned for Northern that will create their own need for improved transportation access. Moreover, much of this activity will be related to base metals that unlike diamonds and gold require a major infrastructure investment to facilitate the outbound movement of mine production (i.e. ore concentrates) to tidewater. In Yukon this may mean substantially upgrading existing roads that were never meant for this activity, whereas in the NWT and Nunavut entirely new all-weather roads will need to be constructed. In Nunavut, Xstrata is proposing a world-scale zinc/copper mine at Hackett River that will connect by all-weather road to a proposed port facility on Bathurst Inlet, 83 kms north. Similarly, MMG Minmetals is proposing world-scale zinc/copper mines at Izok Lake and High Lake that will be connected by a 350 km all-weather road to a proposed port facility on Grays Bay (Coronation Gulf). The planned port facilities will serve in a resupply capacity as well as a summer export function for stockpiled ore concentrates. Baffinland Iron Mines is proposing a major iron ore mine at the north end of Baffin Island. The scale of this operation has been significantly reduced and it is currently proposed that the Mary River mine will produce 3.5 million tonnes of iron ore a year, which will be trucked north over an all-weather road to a port facility on Milne Inlet for export. On the west side of Hudson Bay, the Meadowbank gold mine, operated by Agnico Eagle, is accessed from Baker Lake by an 80 km all-weather road. Farther south, Agnico is proposing another gold mine that will be accessed from Rankin Inlet by an all-weather road some 24 kms in length. In the NWT, the Ekati (Dominion Diamond Corp), Diavik (Rio Tinto) and Snap Lake (DeBeers) diamond mines have a remaining life of 8-15 years and the proposed DeBeers mine at Gahcho Kue is slated for start-up in All these properties are or will be reliant on the Tibbitt to Contwoyto Winter Ice Road for their annual re-supply. Other pending mine developments in the NWT include the NICO mine north of Rae Edzo and the Prairie Creek mine west of Fort Simpson, both of which will ultimately be A Northern Transportation Strategy for : Discussion Paper

11 11 accessed by all-weather road and their ore concentrate production delivered by truck to railheads at Hay River and Fort Nelson, B.C. Transportation demand also will be created by oil and gas exploration and development in the Mackenzie Delta and the Beaufort Sea as well as construction of the proposed Mackenzie Valley and Alaska Highway gas pipelines. In Yukon, proposed mine developments - like Casino, Selwyn and Andrew - are currently in the pre-construction phase. Many of these mines will be served by all-weather roads and their ore concentrate production will be trucked to tidewater at the Port of Skagway. Table 6 provides a demand forecast by major commodity group to the year Table 5 Northern Transport Demand Forecast (tonnes) Community General 443, , ,737 Resource General 94,100 1,193, ,000 Bulk Fuel Supply 718,986 1,233, ,614 Total Inbound 1,256,643 2,900,938 1,734,351 Outbound 112,000 19,556,600 18,820,600 The initial exponential growth in Outbound volumes reflects the expected development of new base metal mines and the consequent rapid growth in ore concentrate exports. Toward a Comprehensive Strategy There has already been a lot of discussion on the matter of northern access and the need to develop a comprehensive northern transportation strategy. Indeed, in 2012 the Van Horne Institute sponsored A White Paper on Reforming s Transportation Policies for the 21st Century, which addressed many of the same topics on a national scale, including infrastructure deficits, alternative governance structures, new funding mechanisms and environmentally friendly solutions. It is noteworthy that the Arctic Council was founded in Ottawa in 1996 and was created to promote circumpolar cooperation on critical matters (e.g. Arctic shipping) among its member states, Iceland, Norway, Russia, the U.S., Denmark, Finland and A Northern Transportation Strategy for : Discussion Paper

12 12 Sweden. 3 was the first Chair in 1998 and it is serving in that role again this year, In 2005, the Council of the Federation met to discuss a national transportation strategy for, which resulted in the report entitled Looking to the Future: A Plan for Investing in s Transportation System. Although this initiative had a wide focus, a lot of what was discussed has direct relevance to the three territories. The report espouses a number of key principles that include the following: Encouraging economic growth, competitiveness and productivity; Encompassing all transportation modes in a balanced and integrated way; Including all provinces and territories and recognizing differing infrastructure needs; Improving safety, security and efficiency on corridors serving strategic gateways and key economic nodes; Facilitating interprovincial/territorial and international trade and tourist traffic; Improving access to strategic transportation components that currently have aging, congested or absent highway connections; Being environmentally responsible; Protecting Canadian sovereignty. The report talks about a required transportation infrastructure investment in the North of $2.5 billion, which is probably closer to $3.5 billion in today s dollars. It also speaks to mechanisms for funding these improvements. The report attempts to identify the major northern components of a strategic national transportation system, including the North s regional airports, the Hudson Bay Railway (to Churchill), the Mackenzie Northern Railway (to Hay River) and a number of present or potential port locations including Hay River, Iqaluit, Bathurst Inlet, Rankin Inlet and Skagway, Alaska. Finally, the report speaks to: The North s huge resource wealth and its potential as an international gateway to Europe and Asia; The North s major transportation infrastructure deficit; The need to provide access and establish a physical presence in the North in order to reinforce s sovereignty; 3 In addition, a Polar Code is being developed by the International Marine Organization that will address all matters related to ensuring safe and environmentally responsible shipping operations in the two Polar regions. A Northern Transportation Strategy for : Discussion Paper

13 13 Climate change and its positive effect on ice free shipping through the Canadian Arctic; Increasing scheduled flight activity over the Pole and the consequent need for airport capability in the North to land commercial airliners in the event of in-flight emergencies. In 2008, the three territorial governments completed Northern Connections: A Multi- Modal Transportation Blueprint for the North, which was intended to complement the Council of the Federation s earlier Looking to the Future document and, indeed, picks up on a number of the same themes. This report talks about the unique transportation needs of the North, its infrastructure deficit and its limited ability to finance improvements. Climate change is addressed in terms of its effect on sea ice and permafrost. It points out that Yukon has no marine infrastructure of its own and relies on Alaskan ports. The report comments on the lack of community and resource access roads, particularly in the NWT and Nunavut, and how this discourages investment. It identifies as potential solutions transportation corridors through the Slave Geological Province to Bathurst Inlet and from Manitoba to Rankin Inlet. The report discusses the fact that Nanisivik is the only location in Nunavut with a developed port and, otherwise, the communities have to rely on unimproved beach landing sites. It talks about the lack of paved airstrips, the high cost of northern air travel and the burden that changes in federal aviation regulations can impose on the North. Finally, it identifies specific infrastructure needs for all three territories and proposes the creation of a Strategic Northern Infrastructure Fund. In 2008, as well, the Government of Nunavut completed its own strategy entitled Let s Get Moving: Nunavut Transportation Strategy, which is a sequel to a similar document prepared in This report focuses on a system of airports and sealift beaches that form the basis of Nunavut s transportation system. Transportation in Nunavut is much like a two-legged stool, the missing third leg being a viable inter-community road system. The importance of the existing system of airports and beach landing sites is understood but there is also a recognized need to maintain, expand and modernize these facilities. For example, most of Nunavut s airports have gravel runways. While the Boeing is able to handle gravel, the newer generation of 737s and other newer aircraft are not. Similarly, barge and tug operations, which can maneuver close to shore, have given A Northern Transportation Strategy for : Discussion Paper

14 14 way to larger deep draft vessels, which must stand off shore and have their cargo lightered to the communities. The report talks about upgrading runway surfaces and moving to a standard runway length of 5,000 feet in order to better accommodate the newer generation of aircraft. It also talks about an informal system of trails and inter-community access roads and the need for improvements to provide better surface access and reduce erosion of the tundra. The report comments on government air travel expenditures between certain communities and the potential to put this business out to bid to the carriers. It talks about a different governance structure and a more lucrative revenue model to help fund improvements at Government of Nunavut airports. It comments on the proposed Manitoba-Nunavut transportation corridor and the proposed Bathurst Inlet Port and Road project and possible partnerships between government and industry to leverage capital funding for projects that would benefit both resource development and the communities. Finally, the report speaks to the potential development of one or two communities that already have regional airports - to become year-round multi-modal distribution centers, similar to Whitehorse and Yellowknife, through the development of intercommunity roads and deep water ports. s Northern Strategy was introduced by the federal government in 2007 and published in It is based on the following four pillars: 1. Protecting s environmental heritage; 2. Promoting social and economic development; 3. Exercising s Arctic sovereignty; 4. Improving and devolving northern governance. The strategy talks about the federal government s involvement in various programs and activities in the North and its annual transfers to the three territories - under Territorial Formula Financing - for hospitals, schools, social services and infrastructure, which in totaled $2.9 billion. In 2009, the federal government created the Canadian Northern Economic Development Agency (CanNor), which works with northern communities to develop and diversify their economies. A New Northern Transportation Strategy Improved transportation access will benefit the North and the rest of in a number of important ways. It will contribute to the growth of the northern economy A Northern Transportation Strategy for : Discussion Paper

15 15 and encourage investment in resource development. It will facilitate employment access and promote social and cultural interaction between communities. It will enhance the northern standard of living and, hopefully, help to mitigate the high cost of consumer goods. Finally, it will help to enhance s physical presence in the North and re-affirm its sovereign interests in the Arctic. Improved access also has the potential to escalate environmental disturbance and open the North even more to counter-cultural influences. While climate change will enhance marine access along the Northwest Passage, the effect of permafrost on roads and road construction will become even more problematic with accelerated permafrost degradation and limited availability of gravel for road beds. Funding new transportation infrastructure will be an important challenge, largely because of a small population and industry base from which to draw tax revenues. Yukon and the NWT have devolution agreements in place that allow for a greater sharing of resource revenues. However, no such agreement is yet in place for Nunavut, where the need for new transportation infrastructure is arguably the greatest - and growing quickly. Indeed, Nunavut urgently needs to offset its infrastructure deficit in order to cost-effectively serve a rapidly growing population and a high-revenuepotential resource sector. Other than continuing to rely on Ottawa for infrastructure funding, new infrastructure will also be financed from resource royalty revenues and creative funding partnerships between government and industry where there are identifiable benefits that will accrue to both the communities and the resource projects. Transportation infrastructure that serves more than one purpose will also lend itself to more positive cost-benefit outcomes. Other funding mechanisms include Public Private Partnerships (P3s), which have met with considerable success elsewhere. Under a P3, the private partner brings innovation and efficiency to the project and takes on much of the risk for project delays and cost overruns that would otherwise be assumed by the taxpayer. Projects could also be financed through the issuance of tax exempt bonds, something that is widely done in the U.S., including Alaska. The bonds are guaranteed and issued at a rate somewhat below prevailing commercial rates. On the expenditure side, more could be done to mitigate the cost of energy used in power generation and transportation in the North. While diesel is currently quite pricey and periodically in short supply, significant savings can be achieved by converting to Liquified Natural Gas (LNG), for which the delivered price is a fraction and feedstock is abundant. A Northern Transportation Strategy for : Discussion Paper

16 16 It is suggested that a new Northern Transportation Strategy will strive to incorporate the following elements: A balanced and integrated transportation system that avoids duplication; Transportation solutions that: o Respect and embrace the native culture; o Respond positively to the effects of climate change; and o Strive to minimize environmental impacts. A transportation system that is predicated on safety and protects the security and sovereignty of s northern regions; Funding partnerships between government and industry where new transportation infrastructure will serve both public and private needs; Infrastructure improvements that respond effectively to: o Increased freight and passenger demand; o New resource development; o New and better transportation technologies; o Better goods distribution solutions; and o Where practical, new regulatory requirements. Transportation improvements that facilitate a higher standard of living and cost-reducing solutions; Infrastructure improvements that enhance corridor access from the South and promote social and cultural connectivity between northern communities; New and innovative infrastructure funding solutions; Better statistical reporting. Don Brownie October 3, 2013 A Northern Transportation Strategy for : Discussion Paper

17 17 About the Van Horne Institute The Van Horne Institute is recognized within and internationally as a leading institute of public policy, education, and research in transportation, supply chain and logistics, and regulated industries. The Van Horne Institute was established to assist industry, governments, and the public in addressing issues affecting transportation, supply chain management/logistics and regulated industries that are relevant to the well-being and growth of industry and commerce. Efficient and low-cost transportation and logistics services are essential to both industry and the public in our geographically large country, so the evolution of sound industrial strategy, public policy, and progressive legislation and regulations are increasing in importance as business moves further towards globalization. Industry needs to be innovative to compete. The Institute will contribute to this competitive challenge through its education and public policy research activities. The Institute was incorporated federally in 1991 as a not-for-profit organization, and is affiliated with the University of Calgary, the University of Alberta, SAIT Polytechnic, and with Athabasca University. Its Board of Directors brings together the experience and knowledge of a broad group of individuals representing all facets of the transportation industry, government, and the academic community that have an interest in transportation logistics and related regulatory issues University Drive NW Calgary, Alberta, T2N 1N4 CANADA Ph: Fax: vanhorne@ucalgary.ca Website: A Northern Transportation Strategy for : Discussion Paper