N.W.T. MLAs approved $65 million in spending Monday that will allow construction on the Inuvik to Tuktoyaktuk highway to start this fall.
The government of the Northwest Territories has already spent more than $12 million to get the project off the ground. Currently the only way to travel between the two communities is by air or ice road.
Debate over the project stretched on for hours Monday night. Some MLAs are concerned the project will provide few long-term jobs while others are worried about rising construction costs.
Hay River South MLA Jane Groenewegen said the federal government wants the road and the territory made a commitment when Canada raised its borrowing limit.
"I believe we certainly made a moral if not legal commitment to the federal government at that time that pending that increase in the borrowing limit we would join together with them, so I think that to renege on that now would certainly have implications with respect to our relationship with the federal government," she said.
Prime Minister Stephen Harper announced Monday in Yellowknife that Canada will provide an additional $50 million for the road, for a total federal contribution of $200 million.
That represents about two-thirds of the cost of the $299 million project.
The territorial government had been hoping Ottawa would fund 75 per cent of the cost of the highway.
Frame Lake MLA Wendy Bisaro said Ottawa should be paying at least three quarters of the cost.
"I was relatively OK with a 75/25 split but now we're down to 67 per cent, and that just means it's a greater burden on us as a government, and that concerns me a great deal," she said.
Bisaro said she's concerned about how much money the territorial government is putting into the project and that the federal government is backing away from its responsibility to pay for provincial and territorial highways in full.