At a time of real economic worry in the NWT, military projects are starting that could direct more than $10 billion toward work in Yellowknife and Inuvik.
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‘This is huge for Inuvik and huge for Yellowknife’
On January 28, in a corner of the internet, a notice appeared that sets in motion billions of dollars of spending in two Northwest Territories communities.
The notice advises contractors that later this year, procurement begins for work in Yellowknife and Inuvik associated with upgrading their military installations.
The estimated total contract value “may exceed $5B for each location,” the notice states, listing tasks ahead like:
- airfield improvements, including new or repurposed hangars;
- ammunition compounds and fuel facilities; and
- “multi-purpose facilities,” accommodation and warehouses.
The $5-billion figure in the notice is extremely preliminary. Assigning a contract of that value doesn’t mean Yellowknifers or northerners will see all or even most of it. The Department of National Defence, approached for comment, did not immediately provide a more detailed breakdown of where that figure came from
Inuvik has spent years trying to recapture the mood of its oil and gas boom that unfolded in the 1970s and early 1980s.
By the late 1980s, that boom had ended.
The town’s military base closed in 1986 (though a small presence remained), at the time a marker of Inuvik’s entry into economic decline.
Clarkson has been doing the math. If the federal spend in Inuvik comes in at even a fraction of the $5 billion in the procurement notice, the consequences would be significant at the town hall.
“If DND did $1 billion-worth of infrastructure in Inuvik – within the municipal boundaries, at the airport – that equates to $20 million in grant in lieu of taxes,” he said. (The federal government is legally exempt from paying property taxes but makes grants in lieu of taxes across the country to ensure it shares local costs.)
“Our current annual budget for capital and operating is about $20 million a year,” Clarkson continued, joining the dots.
“This is akin to somebody opening a mine or several large facilities within municipal boundaries.
“There are some longer-term benefits to the municipal government. I mean, there’s going to be additional work – you’ve got water and sewer to deal with, you’ve got roads to deal with – but there are additional benefits that will help with the operations of the community.”
In late 2024, Ottawa said it wanted to reach “initial operational capability” in the two communities by 2034 and full operations by 2039. Calls for speedier investment in Arctic sovereignty have only grown since then, and it’s not clear whether those timelines have since been moved up.
