The Nunavut capital’s cramped terminal is finally being put out to pasture, but is the price tag worth it?
It’s rush hour inside Iqaluit’s international airport, and empty seats are at a premium.
The iconic yellow terminal has become jammed with humanity as several major flights converge at the same time. Two flights from Ottawa have just landed, disgorging their planeloads into a room already full of people waiting to head south. Two flights bound for Rankin Inlet and Yellowknife are ready to board, and a turboprop flight that had been waiting for the weather to clear up is heading to Clyde River and Pond Inlet.
There are about three times as many people in the airport as there are seats, a problem exacerbated by those people (you know the type) who pile all their stuff across two adjacent seats. The smell is a heady mix of industrial cleaner, ambient cigarette smoke and the sort of body odour produced when too many people wearing heavy clothing stay in a heated space for too long.
Inside this crowded chamber, there are no separate levels for arrivals and departures. The freshly-deplaned trudge toward the tiny baggage belt, about the length of two cars. A digital notice board, which to my knowledge has never worked properly, scrolls a test message that perfectly conveys the essence of the place: “&%$#@?????????????”
Ottawa-bound passengers are finally siphoned off to security screening. The rest of us, bound for points north that don’t require a patdown, are funneled toward the single door that serves as a gate. Passengers from the arriving Ottawa flights are just getting off now. The result is complete gridlock. A friend of mine, who’s working the gate for one of the Northern airlines, looks at me and sighs. “You might as well go have another cigarette,” she says.
Though the plane taking me back home to Yellowknife had arrived 20 minutes early, it still takes off 30 minutes late.
IQALUIT’S AIRPORT is why the city exists in the first place. It began its life in 1942 as the Crystal Two airbase, an American-built facility intended to serve as part of an Allied supply route ferrying equipment and personnel from America to Europe during the Second World War. Like so many Northern projects of that time, it was over-engineered and underused, at least for its original purpose. In a 2003 essay chronicling the history of the airport, Iqaluit writer Robert Eno wrote that “Crystal Two recorded 323 aircraft arrivals for the year 1943, but few of these went on to Europe.”
As the war wound down, the Canadian government purchased the airfield from the Americans for $6.8 million, though the facility continued as a joint U.S.-Canada military operation throughout most of the Cold War. The last American service personnel left in 1963 (although Iqaluit to this day remains part of the North Warning System network of radar stations). “This airfield is the cornerstone of the city of Iqaluit,” Eno wrote. “It opened the region to development during the postwar years.”
While the original terminal building is still used as a cargo hangar, it was replaced by the current canary-yellow, submarine-shaped building opened by then-transportation minister John Crosbie in 1986. It was designed, according to the needs of the time, as a regional airport for a town of 3,000. John Graham, Iqaluit’s mayor, who was the airport’s manager from 1996 until 2012, says when the airport first opened, there was only one flight per day between Iqaluit and the south. “Nobody really considered [the creation of] Nunavut on the horizon and what the impact of that would be,” he says.
The scenes of overcrowding and paralysis – partly the result of domestic growth, partly due to Nunavut hosting multiple advanced-stage mining projects, including the Baffin region’s own Mary River iron ore mine – are at the heart of the Government of Nunavut’s plan to build a replacement terminal. Passenger traffic flowing through Nunavut’s capital has doubled to 140,000 per year since the current terminal opened. YFB, as it’s known by its airport code, sees 20,000 takeoffs and landings a year, up 22 per cent from 2007. It accounts for 30 per cent of Nunavut’s aircraft movements.
And it’s been overcapacity for a while, at least as far back as 2001, according to briefing notes obtained from Nunavut’s Department of Economic Development and Transportation. By 2010, according to the same notes, the airport was failing to meet federal regulations governing airport security, including “requirements for passenger screening and checked baggage explosive detection.” As deputy minister Robert Long wrote in 2010: “These regulatory obligations have placed an enormous burden on the airport, which by necessity continues to operate as a public service, without substantial revenue to offset costs.”
Because the terminal is so small, passengers boarding the smaller turboprop planes used on flights within Baffin Island are bused from the terminal to the plane, so that they’re not walking in the cold past other planes and moving equipment. The 8,600-foot runway itself is more than 20 years old. The lighting system is even older, and no longer meets standards.
The interior fares no better. For flights south, the secure area beyond screening consists of a tiny holding pen with too few seats and no washrooms, making for uncomfortable waits during flight delays. “The fact that you can pack two flights of people into a room that wasn’t meant to hold it, with no food, no water no washroom, is a little bit third-world,” says Chris Ferris, the executive vice-president of marketing and sales for First Air, which operates 112 weekly flights through Iqaluit, including at least two jet flights per day.
“It was definitely not designed for this type of activity,” says John Hawkins, the airport’s acting director. “We have to make compromises in comfort. We do our best to ensure that safety is paramount, but you kind of run out of options, and we’re not in control of growth. If there’s even the same kind of growth that we’ve been having over the past years, we’re stuck and we’ll be out of options.”
ENTER THE FIX: a $300-million package of improvements that will amount to a complete overhaul of the Iqaluit airport. In October, the GN signed the contract on a public-private partnership that will deliver a new terminal building, a “combined services” building housing the airport’s fire department, a new runway and lighting system, all to be in service by 2017. The contract went to a consortium called Arctic Infrastructure Partners (AIP), which consists of London-based InfraRed Capital Partners, Bouygues Building Canada Inc. of Vancouver, Colas Canada Inc. and the Winnipeg Airport Authority. A joint venture between Bouygues and Colas will design and build the project, while the airport authority will operate the new terminal over the 30-year life of the contract.
It stands to be the largest capital project in Nunavut’s history, though as Hawkins explains, it’s really more like four individual projects bundled together. That’s because it’s easier to convince the territory’s financial management board, the powerful cabinet committee which oversees Nunavut’s annual capital budget, to swallow one big pill instead of four smaller ones. The project also qualified for what amounts to a $77-million discount, in the form of funding from P3 Canada, a federal agency dedicated to promoting public-private partnerships.
But that still leaves $223 million, with payments spread over 30 years – a commitment that had some MLAs in Nunavut’s previous legislative assembly concerned. Over the last few years, Nunavut has budgeted about $110 million annually for capital expenditures, and it remains constrained by a $400-million debt cap. During a May 2012 caucus meeting with all MLAs, Peter Taptuna, the territory’s new premier (but then acting as minister of economic development and transportation) sought to assuage fears that the airport payments would overwhelm the capital budget. “We will continue to be able to budget $110 million to capital annually while still respecting the debt ceiling,” he said. The project “will be funded incrementally over the long term.”
It’s not yet clear how Nunavut plans to structure its payments. In October, Arctic Infrastructure Partners issued a $142-million bond, which, according to the Financial Post, will be used alongside Nunavut’s payments to finance construction. The partnership’s own equity will kick in last.
But this isn’t free money, stresses Mark Liedemann, the assistant vice-president of Partnerships BC, the provincial government agency retained by Nunavut’s government to help guide it through the P3 process. “There’s not an accounting gimmick going on here in terms of the government spending money on other projects because it has the private partner borrowing a bunch of money for [the airport],” he says. “The GN may be able to do more capital projects because this project costs less than if it had been done it on its own, but the money that the private partner is investing in the project is actually recorded on the government’s books as a liability.” In other words, it counts against Nunavut’s debt cap.
The project also sidesteps the Nunavummi Nangminiqaqtunik Ikajuuti (NNI) policy, which makes it easier for Nunavut businesses to win government contracts by giving financial advantages to bids by Nunavut- and Inuit-owned businesses. None of the members of Arctic Infrastructure Partnership are Inuit-owned, although one Inuit firm that we know of, Kudlik Construction, will likely serve as a subcontractor. (Tower Arctic, which has built extensively throughout the North but is based in Montreal, will also be involved.) Meanwhile, the territorial government has been out on the meeting and trade show circuit, encouraging Nunavut businesses to forward expressions of interest to the partnership.
The project will include fixed targets for Inuit employment that will increase over time, starting at 15 per cent during early constructon and ramping up to 60 per cent by the end of the contract. In the meantime, the project will also include training and apprenticeship programs and the opportunity for Inuit workers to gain various industrial qualifications. “Whether people decide to stay with the airport project or not,” Liedemann says, “they’ll have the skills associated with that for life.”
WHILE CONSTRUCTION won’t begin until next year, AIP received advance permission before the contract was signed to begin marshalling supplies on this past summer’s sealift. That will allow work to start next spring, months before the ice clears from Frobisher Bay. “Work can start on land much earlier than the first ship can get into the harbour,” Liedemann says.
One major potential headache will involve the repaving of the runway of an airport that must remain in operation during the construction of its replacement. Not only is the Iqaluit airport the only practical way in and out of the city for passengers and freight bound for all over Baffin Island, it’s also a major hub for medevac flights to and from smaller communities and, in serious medical emergencies, to Ottawa. Hawkins says that rules out the possibility of closing the runway at night during construction, though he says there will be periods of “diminished capacity” for large aircraft. “Basically, they’re allowed to have the runway shortened at times, narrowed at times, but not closed through the course of the project,” he says. “There will be some inconvenience, but no actual delays.”
First Air’s Ferris is broadly supportive of the project, though he says the GN needs to be hawkeyed on project costs to ensure costs don’t get passed on to operators. He’s also worried that turning over the operation of the airport to a private contractor is going to mean an increase in the various fees airlines must pay to use the airport. But Barry Reimer, the chief airport project officer for the GN, says control over airline fees will remain with the territorial government. “The airport fees were last adjusted in 2010, and the GN expects to review the fee structure again in 2014,” Reimer says. “At this point, no decisions have been made with respect to the timing or nature of any changes.”
TALKING TO IQALUIT air travellers, you’ll often hear them wonder aloud why the two main airlines, Canadian North and First Air, don’t simply alter the schedules of their busiest daily flights to Ottawa, which arrive and depart within 10 minutes of one another. Such a move, the thinking goes, would spare everyone the sardine-can experience of jammed waiting rooms and the jockeying for limited space at the baggage claim.
But it’s not so simple, says Hawkins, who hears this complaint almost constantly. Changing schedules in Iqaluit means a cascading effect on every flight Iqaluit passengers are trying to connect to, both in the North and south. As Graham, the former airport manager turned-Iqaluit mayor, puts it: “That’s just not the way that the airline business works.”
At any rate, the airport deal is done. The contract with Arctic Infrastructure Partners is signed. And in three years, a shiny new terminal will greet passengers. Graham hopes the new building, with a dedicated customs area, could serve as a draw for tourist flights from Europe, in the way Whitehorse is served by direct seasonal flights from Germany.
After years of passengers cramming into the old terminal, cheek by jowl, the Iqaluit airport “will be quite spacious at first,” Hawkins admits. “But in 10 years it won’t look nearly as spacious, in 20 years it’ll start to be busy looking and in 30 years it’ll start to look crowded again. But it will at least be in the right place for expansion, and it’ll at least be properly planned out.”