Thank you, Madam Chair.
Qulliq Energy Corporation is the territorial power corporation for Nunavut.
I would like to begin by thanking you and the members of the standing committee for inviting me as the representative from Qulliq Energy Corporation to appear before you today. Opportunities such as this provide us with a chance to identify some areas of improvement and provide recommendations to the federal government. I will keep my comments short. I'm going to focus primarily on Qulliq Energy Corporation, QEC.
QEC is relatively small in size, with about 200 employees, 15,000 customers, and an annual operating revenue of about $134 million. However, our reach is quite vast. The territory, Nunavut, is two million square kilometres, making up approximately 20% of Canada's land mass. This sizable area is serviced by our 25 power plants, one in each of Nunavut's communities. Every power plant is a stand-alone, so there is no grid connection between the communities or to the south.
The territory's lack of basic infrastructure—roads, ports, housing—and telecom infrastructure has a profound impact on the energy sector. Most importantly, each of the power plants generates electricity through the burning of diesel, something that has both financial and environmental impacts.
Funding infrastructure projects remains the corporation's biggest challenge as the territory's sole provider of electricity. QEC has 11 of the 25 remaining power plants that have exceeded their expected service life. This existing burden on capital resources means there is a significant restriction on the projects we're able to pursue or fund. I'm thinking about alternative energy projects as one aspect.
These restrictions hamper the corporation's ability to reduce the territory's reliance on diesel and to reduce carbon emissions. Expanding our use of renewable and alternative energy resources is, right now, largely dependent on federal funding. QEC has benefited from federal funding programs, but these programs are not always realizable in the north, specifically by Nunavut and QEC. However, QEC continues to apply to these various programs.
Financial support for the north and its residents must be accessible and relevant to really improve the lives of Nunavummiut. There should be discussions on the development of funding opportunities and how those apply specifically to the region.
I'm going a bit off-script here, but in Nunavut a significant cost of living is the energy cost—the cost of electricity, the cost of heating and the cost of transportation. Nunavut is the only jurisdiction in Canada that is 100% diesel or fossil fuel-based. All of our electricity is generated by diesel. All of our heat comes from fossil fuels. Of course, our transportation is, likewise, fossil fuel-based.
To really impact the energy picture in Nunavut, meaning the affordability, you would need to hit both electricity and heat. Collectively, for those two, if we could impact the price that our customers pay and that Nunavummiut have to bear, it would have a meaningful impact on their financial and economic prospects.
It's critical that the standing committee and the federal government as a whole understand the infrastructure challenges faced by QEC, the Government of Nunavut and all Nunavummiut. Without your support, our corporation will be challenged to rebuild critical infrastructure and to expand our use of renewable and alternative energy. I said “expand”, but right now, we have none, although we're hoping to change that in the near future.
A number of things that conspire against us—again off-script—are geography, logistics and capacity. In terms of geography, our 25 communities are spread out over two million square kilometres with no interconnecting infrastructure. We can't do anything about that.
On logistics, there are the costs and the sealift season. As many of you are probably aware, if you want to take anything of significance in terms of construction material up to Nunavut, you do it during the sealift season. That's basically the only time you can do it unless you're willing to fly it up at some other time, assuming the material is small enough.
Of course, even in terms of our neighbouring territories such as Yukon, with a lot of their population based in Whitehorse and to a lesser extent in Yellowknife, and with connecting infrastructure to a certain extent, we have none of that.
Also, of course, it's about capacity. We have small communities, so it's about the financing. It's about the human capacity and the partnering with organizations that have the skill sets, etc.
Those are all challenges that are tied to the infrastructure picture.
Madam Chair, this concludes my opening remarks. I'd be pleased to answer any questions. Thank you.