Dempster Highway fibre optic line cost could soar to $80M, twice the original estimate

An engineering report recently done for Northwestel found the cost of a proposed fibre optic line up the Dempster Highway could be more than double the original estimate.

The plan, first proposed in 2015, would connect Yukon to a fibre optic line running up the Mackenzie Valley to Inuvik, providing Yukon with a backup link to Southern Canada. 

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The former Yukon Party government estimated it would cost $32 million, but a recent report by Ledcor describes costs that could soar to $80 million. Northwestel said the report was a summary of a year and a half of work done to date.

Steve Sorochan, director of technology and telecommunications with the Yukon government, said an earlier 2015 report looked at the cost per kilometre. But the new report, he said, covers all aspects of the job.

"This is actually looking at taking soil samples, understanding the terrain, how many culverts — which means how many times you have to drill underneath things — which adds cost to the build," he said.

Sorochan said some financing for the project could come from the federal government's "Connect to Innovate" program. That program could pay for 50 per cent of the construction cost.

The Yukon government has also applied to the federal government's small communities fund, for an additional 25 per cent.

A second option

The territory is also considering a second possible route for the fibre line, along the South Klondike Highway to Skagway, Alaska, then on to Seattle.

If the government chooses that 150 kilometre route from Whitehorse, it would only own the line as far as the U.S. border.

Sorochan said the territory could receive funding for construction of the line along that route, but the federal government won't cover any operating bandwidth leasing costs. Using the route would mean the Yukon government would have to lease bandwidth from U.S. carriers such as AT&T, Sprint and T-Mobile to connect to Seattle.

Still, he said Yukon is seriously considering the route, in light of the cost of the Dempster route.

Right now, the territory has only one fibre optic line connecting it to the rest of Canada.

Cable cuts in the past along the Alaska Highway have been a big inconvenience for business and residential users. The cuts affect diagnostic equipment at the Whitehorse hospital that rely on a connection to southern hospitals and shut down debit and credit card services, forcing many businesses to close during the disruptions.

Minister of Economic Development Ranj Pillai says the territory needs a redundant line.

"What I'm trying to do, and our department is trying to do, our government is trying to do, is reduce the risk, get a clear understanding of what this project looks like and get redundancy in place," he said.

Officials have not said when they will decide which route to go with.