DEH CHO - The Village of Fort Simpson is viewing a recent funding arrangement to study the construction of the Mackenzie Valley Highway as a boon for the region.

The territorial government is launching a three-year $7 million study to examine the feasibility of constructing an all-weather road from Wrigley to the Dempster Highway in Inuvik.

Chuck Strahl, left, minister responsible for the Canadian Northern Economic Development Agency (CanNor), announces the federal government's contribution of $3 million to a study that will help determine the feasibility of the Mackenzie Valley Highway. NWT Transportation Minister Michael McLeod, centre, and Premier Floyd Roland were also present at the announcement in Yellowknife on Jan. 29. - Guy Quenneville/NNSL photo

Chuck Strahl, the minister responsible for the Canadian Northern Economic Development Agency (CanNor), was in Yellowknife on Jan. 29 to announce a $3 million investment over two years for the study. The territorial government is contributing the remaining $4 million.

The money will be used by the Department of Transportation to conduct a feasibility study on the proposed road. The report will lay out the potential costs, impacts, benefits and requirements of building and maintaining the Mackenzie Valley Highway.

Fort Simpson Mayor Sean Whelly said the village would definitely like to see the highway constructed.

"We've always been in support of a completed Mackenzie Valley Highway," Whelly said.

Because the village is at the base of the highway it would get some of the truck traffic travelling the Dempster to supply Inuvik.

"We're already kind of a highway service community. This would enhance a lot of services," he said.

The construction of the road would provide a lot of local jobs and work for the larger contractors that specialize in road construction. There would also be tangible spin offs from increased tourism, he said.

"Everyone wants to go on a loop. No one wants to go in a straight line twice," said Whelly.

Overall there's no real downside for the village if the highway is built, he said.

The creation of an all-weather road is an important infrastructure project for the territory, said Michael McLeod, the territorial minister of transportation.

"It will reduce the cost of living for the residents of the Mackenzie Valley," McLeod said.

The road would also increase opportunities for the exploration of natural resources, protect Arctic sovereignty by improving access and the ability to supply the region, and increase economic opportunities in the Mackenzie Valley, he said.

The report is an important regulatory step that's required before an environmental assessment of the project can be started and also before the territory can talk to the federal government about money for road construction, said McLeod. The territory had already planned to do the report but the federal government's contribution will allow it to progress faster, he said.

"It's a real positive step for us," said McLeod.

"It's the biggest step our government has been able to take in some time."

Discussions about the feasibility of an all-weather Mackenzie Valley Highway have been on going for many years.

John Diefenbaker examined the possibility while he was prime minister in the late 1950s and early 60s. A lot of work was done on the route in the early 1970s and the report will build on that, McLeod said.

The territorial government has already done some work to examine the road. An economic analysis completed in 2009 estimated the cost at $1.82 billion to construct the road from Wrigley to Tuktoyaktuk.

As part of the study, consultations will be held in affected communities. Sahtu and Deh Cho communities will be targeted.

"Not everyone is convinced that a road is needed," he said.

McLeod said he is confident, however, that everyone will see the value of the highway.

Work on the report will begin after arrangements are made with all of the aboriginal governments in the valley, said Jim Stevens, the director of planning, policy and environment with the Department of Transportation.

This will be the largest Project Description Report the department has completed to date. The route extends approximately 800 km from Wrigley to the Dempster Highway.

While he's pleased to see the federal government finally talking about road development, Western Arctic MP Dennis Bevington said three years is too long to wait for a report.

"We need a much more abbreviated process and we need to get at it," said Bevington.

The territorial government should look at the engineering designs the federal government produced 40 years ago and then move directly into community consultation and the environmental assessment so the project can be shovel ready within a few years. Bevington said. He said people throughout the valley have told him the road construction should start before the Mackenzie Gas Project does.

"This would allow the communities to ramp up their businesses," he said.

Approximately 30 per cent of the people in the valley are concerned about how the highway will affect their communities but the majority want it, Bevington said.