POLITICS – Churchill’s port expansion isn’t the nation-builder politicians claim

The politically driven “fantasy project” risks becoming another costly government-made boondoggle

BACK IN 1913, it was predicted that a railway to Hudson Bay would unlock “industries not yet dreamed of” and spark new cities across the North. A century later, the same promises surround the Churchill port expansion, but this time politics, not economics, are driving the vision.

But that vision isn’t shared by people who follow northern development closely. “Only politicians and public servants are pushing Churchill,” says Heather Exner-Pirot of the Macdonald-Laurier Institute. “The private sector is not lining up to develop our minerals and energy in the Arctic.”

Her point reflects the challenges facing Churchill, Canada’s only deep-water port with direct access to the Arctic Ocean but also one of the most remote and environmentally sensitive communities in the country.

Understandably, Canadians want major projects, including pipelines, to move forward. A recent Nanos poll showed 60 per cent support for oil and gas shipments in the Arctic, even if there are “environmental concerns.”

But this is not the time for reckless mistakes. The haste to build cannot be a cover for government-led white elephants.

British Columbia Energy Minister Adrian Dix recently said any final list should include only projects backed by strong investors, concrete plans and solid timelines.

“Now is not the time for fantasy projects,” he told reporters.

Prime Minister Mark Carney also continues to say nation-building projects should have private backing. So why not hold the Churchill port expansion to the same standard?

That hasn’t stopped political leaders from promoting Hudson Bay’s potential. Manitoba Premier Wab Kinew, Alberta Premier Danielle Smith, Saskatchewan Premier Scott Moe and Ontario Premier Doug Ford have all talked up Hudson Bay’s prospects. Ford has promoted James Bay, on the southern tip, as a “deep-sea port.” It is no such thing, certainly not deep enough for huge cargo ships or oil tankers.

Formerly under public-private ownership, it’s now operated by 41 First Nations. Over the summer, Manitoba and the federal government announced a preliminary $80 million for port development and The Pas-to-port railway, which is bogged down in muskeg and prone to severe flooding. Last month, more federal-provincial funding for the Port was announced, including for feasibility studies, bringing total funding to $262.5 million.

While some call the expansion a “game changer,” others call it a distraction. They cite exponential capital, transport and storage costs, as well as permafrost, silting and dredging. Hudson Bay is frozen up to eight months of the year.

And then there’s the cost of icebreakers, more than $3 billion each. Anything close to year-round shipping would require an entire fleet of them. Canada currently operates only two heavy icebreakers, both aging and slated for replacement.

Further complicating infrastructure development is that Churchill, close to Wapusk National Park and a polar bear maternity-denning area, is increasingly geared to ecotourism. Environmental groups and several First Nations believe port expansion and increased Arctic shipping pose a threat to the environment and treaty rights.

Some, including certain federal scientists, believe that climate change will magically unfreeze and unlock Hudson Bay. But in reality, the ice remains as thick as ever and consistent with historic coast guard mapping data.

Their desire for made-in-Canada solutions is understandable. However, without privately backed projects, governments will play the dangerous game of picking winners and losers.

The lost opportunity of private pipeline projects, advanced then cancelled during the Trudeau years, is a great cautionary tale. Energy East, Northern Gateway, Keystone XL and the initially private Trans Mountain expansion were backed by roughly $40 billion in private capital. These were real nation-building projects which made economic sense and were based on best bang for the fewest bucks.

It’s time to rekindle them. Quebec might not be officially in favour of an Energy East redux. B.C. might not like oil. Carney might want unanimous provincial and Indigenous support. But that cannot mean unviable, make-work “fantasy” alternatives, including the Port of Churchill expansion, are pursued at taxpayers’ expense. Nation-building comes from sound economics, not political hope. Churchill does not meet that test.

Bronwyn Eyre is a senior fellow at the Montreal Economic Institute, a think tank with offices in Montreal, Ottawa and Calgary.

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