A hydroelectricity plant to be built to provide power to Iqaluit will create “hundreds” of jobs, cut greenhouse gas emissions and boost the city’s economic resilience, says the federal minister for Crown-Indigenous Relations.

The proposed Iqaluit hydroelectric project with a 50-metre-high dam and a powerhouse along the Kuugaluk River made the federal nation-building projects list on Thursday. (Photo courtesy of Nunavut Nukkiksautiit Corp.)

Rebecca Alty spoke about the project in Iqaluit late Thursday afternoon, just hours after Prime Minister Mark Carney named the Iqaluit Nukkiksautiit Hydro Project as one of six new “nation-building” projects the federal government wants to fast-track for approval.

“This is an important milestone for sustainability, for our economy and for Arctic sovereignty, and a major step forward for reconciliation and Inuit economic leadership,” Alty said, talking over the buzz of electrical feeders during a news conference inside Iqaluit’s diesel-driven power plant.

The project must still go through the territorial permitting process and the Nunavut Impact Review Board, which is required under the Nunavut Agreement.

But with speedier federal permitting, construction could start in 2028 — two years sooner than initially estimated — said Heather Shilton, Nukkiksautiit’s executive director.

“We would be looking at a three-year construction window, so 2030 would be the target for commissioning,” she said.

Originally, proponents hoped to have the plant running by 2033.

The $500-million hydroelectric power plant will be built along the Kuugaluk River, about 60 kilometres northeast of Iqaluit. It will include an approximately 50-metre-high dam and a powerhouse which could generate 15 megawatts of electricity for about 100 years.

That would be enough to replace Iqaluit’s diesel-burning electricity generator, which requires 15 million litres of imported diesel each year, said Harry Flaherty, president of Nunavut Nukkiksautiit Corp., which inherited the project from Qulliq Energy Corp. in 2022.

Nunavut dignitaries had many words to laud the development.

“What a day this is,” said Premier P.J. Akeeagok. “This milestone truly reflects the dedication of many.”

Nunavut Tunngavik Inc. president Jeremy Tunraluk said the project defines what “true sovereignty means.” And Olayuk Akesuk, president of Qikiqtani Inuit Association which owns Nukkiksautiit, called it a “great day for our organization.”

The federal government is expected to be the project’s main funder and has already allocated $26 million for studies. The federal Major Projects Office staff will “sit down with the proponent and start discussing the financing,” Alty said.

Options might include funding from the $1-billion Arctic Infrastructure Fund that was introduced in the 2025 federal budget last week, or a loan from the Canada Infrastructure Bank.

Becoming one of the “major projects” named by Carney will also boost investor confidence in the hydroelectric plant, Akeeagok said.

“The backing and the support of the federal government will unlock new resources,” he said.