Robert Campbell Highway reconstruction: $31 million mining subsidy?

Last fall, the Yukon government announced a $31-million, three-year project to upgrade the Robert Campbell Highway.

Last fall, the Yukon government announced a $31-million, three-year project to upgrade the Robert Campbell Highway.

This year alone, the government will spend $8 million on five different projects in the Watson Lake and Tuchitua areas.

The work is being done because the existing highway is narrow and has weak foundations, said Highways and Public Works spokesperson Karla Ter Voert.

There is also extensive damage to the road due to seasonal frost melts.

However, the Cantung mining site is also in the area, 300 kilometres northeast of Watson Lake.

And North American Tungsten Corporation, which owns Cantung, has a second deposit farther north, which it is trying to bring into operation.

Both mines would use the highway.

“The current road is not well equipped to sustain significant mine traffic,” said Ter Voert.

“And this work now will help the existing mine be able to utilize the road better, especially with weight issues.”

But the mines were not the main reason for the planned upgrades to the public highway and North American Tungsten would not be helping to foot the bill, she said.

“Because the Robert Campbell Highway is one of our primary public highways we need to get it up to better standards.”

The road upgrade is nothing more than corporate welfare, said Scott Hennig with the Canadian Taxpayers Federation.

“If the company is going to be able to make money and be able to pay for all their costs then it’s not a viable business,” he said.

“And if it is, then investors should be lining up to invest in these companies.”

Common practice in Alberta, where Hennig works, is if the beneficiaries are going to be industry then industry pays for the roads, he said.

“Even if communities are using the road — if the current road is adequate for their needs, if the only reason it’s being upgraded is so that industry can use it for access, well then, that upgrade should be paid for by industry.”

“A more cautious government may have waited before spending large amounts of taxpayers’ money towards upgrading a highway that’s used quite infrequently,” said Liberal Highways and Public Works critic Gary McRobb.

“At the same time, if the tungsten mine goes into production it would be good if the highway was upgraded by that time.”

McRobb has driven the highway dozens of times and notes that it is quite narrow in spots.

There are also several blind hills that may present safety hazards.

“So the government has got to anticipate, if there’s going to be heavy truck traffic, a need for an upgrade on the highway.”

However, is this something the territory can afford to do on its own?

Highways workers are seeing cutbacks in other areas, early layoffs and clawbacks, said McRobb.

There have also been complaints about the state of the highways in other parts of the Yukon.

“Perhaps it would have been wise for the government to approach the federal government about co-funding for a project like this in the name of economic development.”

The government is in a financial squeeze because of the $36.5 million it has tied up in asset-backed commercial paper, he continued.

And the road reconstruction could be causing delays in other projects outside of the department.

“I’m thinking about the correction centre, Dawson City Health Centre, the upgrade to the Whitehorse General Hospital and the replacement of FH Collins High School,” said McRobb.

“All of those projects have been delayed because of this huge upgrade to that back road in the territory.

“It all comes down to available capital funds and priorities.”

The highway is located along the Tintina Trench, which has great mineral potential, and could serve as an important link to other mines in the future.

During Yukon night at the 2008 Mineral Exploration Roundup in Vancouver, Premier Dennis Fentie and Minister Archie Lang announced the road upgrade to potential investors, said McRobb.

“It’s part of their bait when they go fishing for exploration dollars at these conferences.”

But use of the road in the near future depends on North American Tungsten opening its Mactung site.

This is reliant on a very volatile market and the price of shares in the corporation has dropped nearly 30 per cent in the past two months.

“I would think that for Dennis Fentie, being MLA for Watson Lake and a former truck driver, it’s one of his pet projects to be the one who finally upgrades the Robert Campbell Highway,” McRobb added.

“And he considers that a higher priority than the Dawson City Health Centre or replacing FH Collins.”