Hundreds of millions of dollars are expected to flow to Canada's North as a result of Tuesday's federal budget, with money promised for projects ranging from much-needed public housing to a High Arctic research station.

As part of the $40-billion economic stimulus plan unveiled in Ottawa on Tuesday by Finance Minister Jim Flaherty, $200 million will flow over two years to social housing units to be built and renovated across the three northern territories.

"The Yukon and Northwest Territories will receive $50 million each, while the remaining $100 million will be allocated to Nunavut, where the need for new social housing is greatest," the budget document reads in part.

The dedicated funding will be administered through the Canada Mortgage and Housing Corp.

In a release issued late Monday, Mary Simon, president of the national Inuit organization Inuit Tapiirit Kanatami, called the housing money "disappointing," saying it is less than what is really needed across the North.

Simon said the funding excludes two other Inuit regions: Nunavik in northern Quebec and Nunatsiavut in Labrador.

Simon applauded other parts of the budget, including $278 million to be spent over two years on First Nations and Inuit health care.

Northern infrastructure projects

The budget also sets aside money for what it calls "priority" infrastructure projects, including:

  • Construction of a bypass road in Yellowknife, which would take truck traffic out of the city.
  • Water treatment projects in the Yukon.
  • Building the Piqqusilirivvik cultural facility in Clyde River, Nunavut.
  • Up to $17 million to speed up work on a small-craft harbour in Pangnirtung, Nunavut.

Also included in the budget is $37.6 million in the 2009-2010 fiscal year to support the regulatory and environmental assessment processes related to the proposed Mackenzie Valley natural gas pipeline in the Northwest Territories.

The North's mining industry, which has been hit hard by the global economic downturn, may benefit from the government's promise to extend its temporary mineral exploration tax credit for another year.

The 15 per cent tax credit, which helps companies raise capital for mining exploration projects, was scheduled to expire on March 31. Extending it for another year is estimated to cost the government $55 million, according to the budget.

Feasibility study for High Arctic station

The budget gives $2 million to the federal Indian and Northern Affairs Department to conduct a feasibility study into the world-class High Arctic scientific research station that the government had promised in its 2007 throne speech.

If built, the High Arctic station would act as a hub for existing northern research stations and scientific activity centred on the Arctic environment, according to the budget, which also set aside up to $85 million over the next two years to maintain or upgrade "key Arctic research facilities."

Northern economic development is also in the budget, with $50 million to be spent over five years to establish a new economic development agency in the region.

A further $90 million will be spent, also over five years, to renew the government's Strategic Investments in Northern Economic Development program, which will form the heart of the new agency.