Beware the ‘nation-building’ boosters: why governments shouldn’t pick winners and losers

“The railway, which will carry the wheat from the west, will start a trade around Hudson Bay, resulting in industries not yet dreamed of. Great cities will spring up, lands now a barren waste will be cultivated and productive, and new fields of silver, gold, and other valuable minerals will be developed to add wealth to the nation.”

That’s what Canadian Magazine wrote in 1913. It’s more or less what boosters of the Churchill port expansion are saying today. But beware: “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.” Says Canpotex: “Canada’s largest and fastest-growing potash markets are in Asia and South America.”

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.

While no pipeline project made the first cut on the federal major projects list, Premier Danielle Smith says she remains hopeful. B.C. energy minister Adrian Dix says the final list should include only those projects backed by strong investors, concrete plans, and solid timelines: “Now is not the time for fantasy projects.” Prime Minister Carney is apparently insisting that any pipeline project must have private backing.

So why not hold the Churchill port expansion—expected on the next major projects list — to the same standard? Formerly under private-public 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 The-Pas-to-port railway, which is bogged down in muskeg and prone to severe flooding.

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. Churchill itself is inaccessible by road.

The lost opportunity of private pipeline projects is a great cautionary tale. Energy East, Northern Gateway, Keystone XL, and the initially-private Trans Mountain expansion were real nation-building projects which made economic sense and were based on best bang for the fewest bucks.

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

And then there’s the cost of ice breakers — over $3 billion each. Anything close to year-round shipping would require an entire fleet of them. Port proponents say salt water is “slushier” than “structural ice” and point to the fact that the Russians already successfully operate Arctic ports. However, these are also iced in most of the year, and Russian fleets are navigated by accident-prone, nuclear-powered ice breakers. Indeed, Russia’s lack of warm water ports is a major geopolitical issue.

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.

Premiers Kinew, Smith, Moe, and Ford have also engaged in wishful thinking on Hudson Bay. 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.

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. PM 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.

Bronwyn Eyre est chercheuse associée senior à l’IEDM et ancienne ministre de l’Énergie de la Saskatchewan. Elle signe ce texte à titre personnel.