Nunavut “reassessing” Greenland route for $203M fibre project

Last updated on March 18, 2021

Nunavut’s fibre line came under fire for the proposed cost, but it was also uncertainty about striking a deal with the island’s largest telecom provider and reservations about the security of the cable that is driving it to reassess the whole route entirely.

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Digestible version (full story below):

• The Nunavut government was in talks this past summer to pivot on a government-subsidized broadband project that would bury an undersea fibre line running through Greenland
• The reasons to seek alternative routes included cost-cutting, uncertainty about hashing-out a deal with the Greenland telecom provider, and security of the fibre line
• The regional government sought four alternatives, and was discussing a possible deal with the Kativik Regional Government in northern Quebec to domesticate the fibre, save money and connect more communities
• But the discussions were under pressure from the federal government to stick to the deadline. A spokesperson for Nunavut said queries about the project will now have to wait until the last week of January, after the government fully reassesses its options
• The alternative route discussions follow news that members of Nunavut’s legislative assembly were outraged that the original Greenland pass project would cost $80 million more than expected
• The development also comes as the federal government’s other broadband initiatives experience delays and as the government pushes forward on accelerated timelines to connect 98 per cent of country to universal broadband speeds by 2026

Key quote:

“The alternative routing could improve the project by reducing capital costs and bringing service to additional communities, but a decision on technical compatibility will need to be made within the next few weeks in order to keep the project on schedule.”

Infrastructure Canada briefing note in July on alternatives to Greenland fibre project

What this story contributes:

This story reveals that Nunvaut was in discussion with northern Quebec to move away from connecting to Greenland for the route of its new fibre project.

Deep version:

The Government of Nunavut is in the midst of “reassessing” its options with a fibre cable that was supposed to run through Greenland, according to a Nunavut spokesperson, after this publication obtained a July briefing note outlining alternative routes for the $203-million project.

The reassessment includes the regional government’s desire for cost-cutting alternatives to the Greenland-connecting fibre pass, its uncertainty about its ability to hash out a deal with the sovereign island’s largest telecom provider, and general security concerns about not having full domestic control over the fibre line, the note outlined.

The regional government was in talks this summer with the Kativik Regional Government (KRG), the Indigenous-led municipal government in northern Quebec, about plugging into their developing fibre projects, which they thought would address those concerns.

All of this was captured in the briefing note to Infrastructure Canada and Innovation, Science and Economic Development (ISED). Federal officials were encouraging Nunavut to move quickly on its talks with Kativik in order to maintain the timeline they agreed to with the regional government. 

But in response to a number of questions about progress on alternative route selection, a Nunavut spokesperson said Wednesday any inquiries would have to wait until the last week of January, when a full reassessment of the regional government’s options are made.

When reached to find out why such a decision is being allowed to lag, ISED deferred any questions to the Nunavut government.

The project, which would run 1700 kilometres of undersea fibre across Davis Strait from Nuuk, Greenland to Baffin Island, was announced in August 2019 and is funded by the Investing in Canada Infrastructure Program. A procurement award for the build was supposed to be announced in February and service was to begin in 2022. It had already been delayed a year by the time alternative route discussions got underway. (There’s further uncertainty about the timeline now hanging on what comes out of the regional government later this month.)

But after federal approval of the project, Nunavut began running into problems. First, the Department of Fisheries and Oceans was concerned that the submerged cable would impact an undersea conservation area. And then there was concern that the regional government wouldn’t be able to reach a deal with TeleGreenland, the dominant telecom company on the island, to forward the project.

The result was a projected year of delay and four alternative routes, two of which were rejected: a fibre run down the Labrador Coast to Milton, Newfoundland, and a connection across the top of Hudson Bay to Churchill, Manitoba.

The remaining two alternatives involved linking to projects already under development by the KRG. The first route would run along the Hudson Bay coast of Quebec, where the existing project is extending cable from Chisasibi north to Puvirnituq. The second route would be to hook up with a planned extension of broadband from Schefferville to Kuujiuaq on Ungava Bay. The former project secured $125.7 million in Connect to Innovate subsidies, while the latter has received an $8-million pledge from the same program.

Those proposed routes, according to the briefing note, would provide advantages over the Greenland route: reduced costs, which would allow the proponents to return money to the government; an opportunity to deliver connectivity to more communities in Nunavut or the KRG; an opportunity to provide future redundancy through more connections between Nunavut and KRG systems; and to provide an “all-Canadian” solution that would reduce security risks, allow for the use of Canadian internet service providers, and facilitate the prospect of further extensions throughout northern Canada.

In June, Nunavut and KRG signed a non-disclosure agreement, which allowed the parties to exchange technical information and determine whether such an alternative route was feasible, according to the briefing note. The goal was then to make a preliminary assessment by the end of July and issue a request for proposals for the project in the fall. If such an assessment failed with the KRG, the Greenland project would have to proceed as the “sole option,” the note said.

TeleGreenland has an existing submarine fibreoptic cable serving Iceland and North America — including Canada — called Greenland Connect, which was completed in 2017.

In October, Reuters reported that Greenland’s submarine cables were a hacking security risk.

It’s unclear which of the reasons to have alternative talks takes precedence, but some members of Nunavut’s government expressed outrage in late 2019 that the line would cost an additional $80 million than initially projected, according to a CBC report. (For perspective, the government-subsidized Connected Coast project, which hopes to bury double the amount of fibre underwater along British Columbia’s coastline, will cost $45.4 million.)

The regional government defended itself by saying it would only be on the hook for 25 per cent of that increase, the story said, though the federal government has often been militant about running a tight financial ship with subsidized broadband projects.

For example, ISED — the federal department controlling the broadband purse strings — stuck to a northern Manitoba project that only cost them $30-million from the Connect to Innovate fund, versus millions more proposed by an opposing group, in part because it was more economical. The funding pledge, however, was eventually revoked anyway due to lack of progress.

News of the alternative route discussions illustrates some of the difficulties in the federal government’s pursuit of universal high-speed access to all Canadians, pegged at download speeds of 50 Mbps and upload speeds of 10 Mbps.

An analysis by this publication of figures tabled in response to an MP question on progress of the Connect to Innovate program found only 54 per cent of allocated government money left the door as of October 2020.

In November, with the announcement of the $1.75-billion Universal Broadband Fund, the government moved up its timeline to connect 98 per cent of the country to the 50/10 speeds by 2026 — up from 95 per cent.

In late December, a Toronto-based company called CanArctic Inuit Networks said it plans to build a 2,000-kilometer fibre line from Newfoundland to Nunavut by 2022 at a cost of $107 million.

Even with an alternative route in place, commercial agreements are complex. The note outlined some of those negotiating terms, including determination on final route location and communities to be served; cost-sharing of the main and branching cables to communities in Nunavut and Quebec; ownership of the fibre line and other assets; contractual arrangements for last-mile connections with ISPs; allocation of revenues and operating costs; allocation of bandwidth; funding sources; and project delivery responsibility.

Read the full briefing note:

“Receipts” is a series of stories based on financials, documents from sources or public records requests