Former N.W.T resident raises concerns about local economic benefit as construction of Sahtu access road begins

The first phase of construction on the Prohibition Creek Access Road will cost $25.5 million, but a former Tulita resident is questioning how much the local economy will actually benefit from the project. 

The access road is expected to be part of the Mackenzie Valley Highway Project and will eventually connect the N.W.T. communities of Tulita and Norman Wells. 

The first phase, spanning 6.7 km between Canyon Creek and Christina Creek, began Tuesday. It will cost $25.5 million, with the federal government covering three-quarters of the costs. 

Norman Wells-based HRN Contracting Ltd. negotiated the contract with the territorial government without competitors. The company is registered under the territory's Business Incentive Policy (BIP), a program designed to benefit businesses that are owned and operated within the N.W.T.

A press release from the federal and territorial government says that the project is part of a joint effort to "invest in strategic infrastructure that creates jobs and economic opportunities for Northern businesses."

But Bobby Clement said he has doubts about how much locals will benefit. 

Clement now lives in High Level, Alta., but grew up in Tulita and runs a Facebook group dedicated to providing updates on the Mackenzie Valley Highway project, among other Sahtu infrastructure projects. 

"The majority of the funding that [the] government's given to HRN is probably going to leave the Sahtu and going to go into the pockets of the Southerners or Easterners," he said.

Clement's comments are related to HRN's partnership with Nuna Logistics, a construction and mining company that is 51 per cent owned by Nunavut organization Kitikmeot Inuit Association and 49 per cent owned by North American Construction Group, based in Alberta.

HRN president David Hodgson, reached by phone, said he didn't "want to say anything about this."

Pressed on why, Hodgson said the Prohibition Creek Access Road project "is too new," and that he's "not prepared to speak on it at this point."

The CBC could not reach Nuna Logistics for comment.  

HRN Contracting committed to spending in local area, gov't says

In an email, a spokesperson for the N.W.T.'s Department of Infrastructure (INF) said that contracts negotiated with BIP-registered companies "are expected to lead to benefits for businesses or residents in the region."

The spokesperson said that HRN has made commitments on how much it will spent in the local area for goods, services and labour. 

INF said that the details of those commitments couldn't be disclosed without HRN's consent, but that commitments on local spending are enforced through the BIP.

Clement said he's glad the project is underway but is "disappointed with the way things have been handled behind closed doors when awarding work." 

Higher budget result of inflation, supply chain issues: minister

The  Prohibition Creek Access Road project was first announced in 2020 as a 13-km road from Canyon Creek to Prohibition Creek. At the time, the entire project was budgeted at $20 million. 

Katrina Nokleby, MLA and former INF minister, claimed the contract-awarding for the access road was the result of "cronyism and corruption" within the territorial government.

Nokleby, who was minister when the project was first announced, criticized the government for allowing the price of the project to balloon so that completing just 6.7 km of the road now costs over $5 million more than the original budget for the entire 13 km.

"Almost $4 million a kilometre is poor economics in my opinion it's unheard of," she told the CBC.

"I am struggling to see how a earthworks project, which is generally all northern, you know, capacity Is costing so much more based on supply chain.

"I don't buy that." 

INF Minister Diane Archie said in the N.W.T. legislative assembly on Oct. 19 that the project's new, higher cost is a result of supply chain issues, inflation, material and labour shortages and rising fuel costs, and that "allegations of nefarious dealings raised in the House are fundamentally untrue."

"We are hopeful that this can be celebrated as the important milestone that it is, and that the years of work to get to this point are not tarnished by these recent allegations," she said.

INF said that the procurement approach for phase two of the access road, the remaining 6.3 km, will be determined prior to construction.  The department couldn't say when phase two will start or how much it will cost, explaining it would depend on "additional regulatory approvals and funding considerations."

Phase one, meanwhile, is expected to take 12 months to complete.