Canadian Northern Corridor Project

When Canada’s first Prime Minister, John A. Macdonald, struck a deal with British Columbia to connect the province with the new confederation via a transcontinental railway, he knew it would be a nation builder. Now, 135 years after Canadian Pacific Railway launched, another coast-to-coast project is quietly gaining momentum.

The Canadian Northern Corridor¹ would see a multi-modal transportation corridor stretching about 7,000 kilometres across middle and northern Canada, from British Columbia through to Labrador, with spurs into the Northwest Territories, northern Manitoba, Ontario and Quebec. The initial concept is to secure right-of-way to open up the opportunity to build infrastructure for road, rail, pipeline, utility and communication lines.

“This is a mode-agnostic proposal, not pre-judging specific forms of transportation but to really think about the need for moving goods in general,” G. Kent Fellows, co-author of the University of Calgary’s School of Public Policy report on the Canadian Northern Corridor. “We’re trying to pre-clear corridors – east, west, north – to make investment in infrastructure.”

The concept isn’t new: almost 50 years ago, a report by Alberta land-use lawyer Robert Rohmer, proposed a “mid-Canada” corridor, but there was little interest until three major issues revitalized the idea in 2017 – the opening of northern waters due to climate change, the need to diversify markets for Canada’s energy resources, and public discord halting oil and natural gas pipeline projects.

“Pipelines are the canary in the coal mine,” says Fellows. “We’re starting to see this issue crop up on new highways, on rail, all across the economy. So, it’s really thinking about how you come up with a strategy to a) plan for future infrastructure and b) to clear that regulatory underbrush so you can facilitate private and public investment in infrastructure.”

Approximately 100,000 people live in northern Canadian communities spread across 3.5 million square kilometres. Diversifying fuel sources is key to their sustainable development as most northern communities and industries rely on fuel oil, propane or diesel for heat and electricity. These carbon-intense fuels are costly, both from an economic and an environmental standpoint. With few all-season roads, fuel has to be delivered either by barge, truck during the winter and plane when there is no ice road. Access to natural gas, through all-weather roads and pipelines, would dramatically alter northern economics and environment.

For Thomas Elwell, CEO of Kate Energy², projects like the Canadian Northern Corridor are critical for the future of Canada’s North. Kate Energy produces and delivers liquefied natural gas and LNG services and equipment to northern communities and industrial operations.

Transportation remains one of the company’s biggest challenges as they can draw natural gas supply from Dawson and Dawson Creek, but are still anywhere from 1,500 to 2,000 kilometres from their end-client base.

“The biggest advantage to all of us will be the cost of transportation. If we are producing LNG to transport product to any one of our clients/facilities in the future, and if they are located close to the corridor project, the cost of electricity will drop correspondingly.”

Just as Canada’s railway system created opportunities for the country, so will an agnostic transportation corridor, adds Joel Holdaway, Director of Engagement for the Canadian Vitality Pathway³. The project is similar to the Canadian Northern Corridor in being industry neutral, and promoting multi-modal, coast-to-coast “threads” of trade infrastructure that will serve emerging needs for diverse energy and transportation – needs not foreseen yet, he says.

“The other option is – maybe now is the time to actually start facing up to these challenges and how we deal with them in a coordinated, thoughtful way, looking at the long-term.”

Options would include high-speed rail, electricity, hydrogen, natural gas, carbon dioxide and lower-carbon refined products. Holdaway sees the market-based Canadian Vitality Pathway as complimentary to the more academic Northern Corridor. Fundamental to either project is involving communities from the start in discussions about where the infrastructure should be built and what they want it to accomplish, he says.

“This helps build the understanding that it’s not just one opportunity over a short period of time, but multiple opportunities over a longer period of time. It starts to build more of a broader economic value proposition for those communities along the corridor, focusing on the multitude of possibilities in an area, a place where a number of different things can happen, rather than a one-off project in a series of locations.”

Regardless of the mode, the problems infrastructure developers face across Canada are similar, notes Robert Mansell, economics professor with the University of Calgary, and regulatory expert on the Canadian Northern Corridor Project. “One of the big issues is the way we do things now as one-off projects, which allows for various groups to shut projects down,” Mansell says.

“If you increase the scope and you increase the number of parties at the table, there is an increased chance for tradeoffs to make maybe not everyone happy but get the majority to be accepting of the idea.”

Kate Energy’s Elwell notes providing more cost-effective and cleaner options for generating power and heat to remote communities is crucial. But any project has to check all the community engagement boxes. “We can’t afford as a country to have the sort of problems we’ve had recently where we are imposing ourselves on all the communities we are working in or working through. There have to be benefits, demonstrated every stretch of the way, from kilometre one to the end. And I think that’s the best way to work; if everyone has something to gain or to lose, everyone is paying attention.”

Funding the corridors would be a combination of private and public; a road would likely be funded publicly, whereas a pipeline or power line would be funded privately. For individual pieces of infrastructure, part of the concept is to make those more feasible and facilitate private interest coming to the table to improve certainty.

“If we are talking about something taking 10 or 15 years to get approved, we’ll never win at that game,” says Fellows. “It’s really the option value. If you don’t have to predicate it on knowing for certain there’s going to be more opportunity for LNG in two or three years, for example, then it opens that option to you, if the stars align.”

“The other option is – maybe now is the time to actually start facing up to these challenges and how we deal with them in a coordinated, thoughtful way, looking at the long-term.”

For more information on the Canadian Northern Corridor, visit www.canadiancorridor.ca.

Dina O’Meara has been covering Canadian energy issues for almost 20 years.