Reliable and fast internet is spreading across the planet, enabling new opportunities for previously isolated regions.
If you look at the global submarine cable map, you’ll now see high-speed fibre optic lines stretching to places like Nome, Alaska, or the Svalbard Islands, around 1,000 kilometres off the north coast of Norway. Nuuk, Greenland, even has two cables.
We have a fast fibre connection to the global internet, but it is a single cable down the Alaska Highway that is at the mercy of Fort Nelson’s notorious backhoe operators. We’ve been talking about a backup cable for years. I first wrote about it in 2011.
The lack of a backup cable is a problem. While a single cable allows many of the benefits of high-speed internet, such as watching movies or transferring large files, it falls short in one key area. It’s hard to attract many high paying tech jobs when companies can choose another location and not have to worry about their systems going down for hours at a time.
Sooner or later we’ll get there. Either someone will build a backup cable to connect with other lines in Skagway or Inuvik, or one of the start-up companies planning fleets of low-earth-orbit satellites will launch. OneWeb, for example, has raised $2 billion from investors and plans to launch its first 10 satellites this year. If it succeeds in getting all 900 mini-satellites it plans into space, every square centimetre of the planet will have access to high-speed internet.
So the big question is what we will do when we can offer companies high-speed internet with backup. Had we done it a decade ago, we might have been a rather unique place to locate a ski-loving tech team or a server farm cooled inexpensively by the Yukon River.
Today, we have to do more than build a backup internet connection and wait for the techies to show up.
This means we need to think about how to attract those jobs that will make the investment in the backup connection worthwhile.
One idea comes from our friends in the United Kingdom. They have set up “Enterprise Zones,” which aim to attract investments and jobs to specific regional hubs.
There are around 50 enterprise zones in England, and according to the UK government these have attracted millions in investment and on average created around 500 jobs each.
The zones offer businesses a mix of subsidies and reduced red tape. The blandishments for investors include government promises of high-speed internet, discounts on property taxes or faster and simplified processes for zoning changes in selected areas. There are also corporate tax offers, such as accelerated tax deductions for investments in equipment.
Companies have a limited window of opportunity to move into the zones to encourage early investment, and the tax benefits fade away over time.
Some of the English zones also have special support from the government departments that build infrastructure or regenerate environmentally damaged areas.
The enterprise zone concept is neither new nor without critics. There are plenty of similar schemes around the world that have either failed or turned into expensive and permanent subsidy programs for profitable businesses.
Used wisely, however, these kind of programs can kickstart development.
The territorial government should think about whether it wants to plan something like this to be ready to announce at the same time our backup cable makes the front pages.
Each of the English zones has angles that are unique to its region. What would a Yukon tech enterprise zone look like? The good news is that we already have three things that some of the more depressed regions on England launching enterprise zones don’t: a fantastic outdoor lifestyle, a vibrant community and a small but lively tech community.
In addition to that, a Yukon tech enterprise zone might include a mix of tax breaks, internet connectivity and other perks.
The City of Whitehorse and Yukon government might agree to grant breaks on property taxes and corporate income tax for companies that bring a certain number of new jobs to town. They could also offer a break on personal taxes for the high paid techies choosing between Nelson, Canmore or Whitehorse.
These tax breaks would not be payable immediately, but would vest over a number of years assuming the jobs stayed in the Yukon.
The plan would also need to tackle some blockers that might dissuade tech firms from moving to the Yukon.
The first is air travel. Air North has done a great job making travel cheap and easy to Vancouver, but the government needs to avoid gumming this up by raising airport fees and air fuel taxes.
The second is a pool of easily accessible office space downtown with excellent wireless and internet connections. Partnering with local landlords or repurposing a floor or two of a suitable downtown government building could work.
Finally, affordable rental property is critical. Yukon Bureau of Statistics data on buildings with more than three rental units in Whitehorse show vacancy rates are low by historical standards and that rents are now the highest since 2013. And that’s before this summer’s surge of arrivals to work on the new mines.
Work on our housing problem needs to accelerate. It’s hard to develop the economy if workers can’t find a place to live or you have to pay them extra to compensate for high housing costs.
Places that haven’t had good economic news since the industrial revolution, such as Lancashire and Sunderland, are trying the strategy. Maybe we should too. How the backhoe operators of Fort Nelson will laugh at us if we spend millions on a backup connection, and don’t attract any new techies to use it.
Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist.