The basin drained by the Churchill River has an area of approximately 283,350 square kilometres (km2). It lies to the north of the Nelson and Saskatchewan River basins, with its headwaters in east-central Alberta adjoining the Athabasca River drainage basin on the north and west. The river flows across Saskatchewan in an easterly direction, at an average distance of about 240 km north of the Saskatchewan River. In its lower reaches through Manitoba, it runs in a north-easterly direction, roughly parallel to and at a distance of about 160 km from the Nelson River.
The Manitoba portion of the river has a hydroelectric potential of more than 3,000,000 kilowatts. Instead of harnessing this hydroelectric potential by building plants right on the river itself, a considerable economic advantage was gained by diverting most of the Churchill River water into the Burntwood and Nelson River systems to use at the generating stations being built on the Nelson River. Diverting Churchill River water as opposed to building plants on the Churchill River reflected a cost advantage in excess of $600 million.
Following joint federal-provincial studies, Manitoba Hydro in February 1966 announced its intention to divert the Churchill River as part of an overall plan of northern hydro development. In December 1972, a licence to proceed with the diversion was issued to Manitoba Hydro by the Water Resources Branch of the Manitoba Department of Mines, Resources and Environmental Management. Construction contracts were awarded in 1973, and the diversion was in operation in 1977.
As originally conceived, the diversion plan was to raise the level of Southern Indian Lake by 10.6 m. This "high level diversion", however, would have required that many residents of the region (including the entire community of Southern Indian Lake) would have to move to higher ground. Because of this, and because of environmental concerns, the plan was modified to limit the lake level rise to three metres.
Under the terms of the licence, Manitoba Hydro is permitted to divert up to 850 cubic metres per second (m3/s) from the Churchill into the Nelson. The licence also stipulates that the outflow from the control dam at Missi Falls must be at least 14 m3/s during the open water season, and 43 m3/s during the ice cover period.
In the past, outflows from Southern Indian Lake have varied from about 566 m3/s to 1,982 m3/s with a long term average of 991 m3/s. Below the Missi Falls, tributaries bolstered the Churchill River's natural flow to an average of 1,274 m3/s emptying into Hudson Bay. With the diversion system in operation, the Churchill flow into Hudson Bay is reduced to an average of 510 m3/s.
The diverted Churchill water can be used at 4 potential generating sites along the Burntwood River (with a total potential of more than 700,000 kilowatts) and at seven Nelson River sites below Split Lake (adding nearly 2,000,000 kilowatts of dependable capacity to the Lower Nelson).
The total cost of Churchill River Diversion works was $220.5 million of which 20% was for environmental considerations including tree clearing and mitigation work.
The diversion plan has caused environmental changes on the lower Churchill River and in the region along the diversion route. Manitoba Hydro, often in conjunction with the Province of Manitoba and the Federal Government, has implemented programming and entered into compensation agreements with affected communities and resource user groups to address the negative effects of the CRD project.
Environmental monitoring throughout the waterways affected by CRD continues to today. CRD has altered the shorelines of Southern Indian Lake and of certain areas above and below the Notigi control structure. The principal effects of flooding are the loss of forested area and marshes (wild animal habitat and trapping grounds), melting of permafrost, and changes in the pattern of commercial fishing.
To ensure that sociological, economic and environmental interests would be fully explored, the governments of Canada and Manitoba in 1971 initiated a $2 million Lake Winnipeg, Churchill and Nelson Rivers Study to look at every aspect of northern resources development and to recommend modifications, remedial measures, and mitigating works. The monumental 13-volume Study Board Report was released on June 30, 1975 and Manitoba Hydro has implemented a number of its recommendations. Several of the recommendations were, because of their urgency, implemented earlier before the Study Board had concluded its three-year investigation.
Among the areas of concern investigated by the Study Board were the effects at Thompson, Churchill and Nelson House. At Thompson, because of increased flows in the Burntwood River, it was necessary to modify the city's water intake system and to rebuild the floatplane base. At Churchill, the lessened flows required modifications to the water supply works (and may, on the other hand, have the beneficial effect of extending the port's ice-free period by 15 days). In Nelson House, flooding of some 809 hectares of Indian Reserve land required remedial works and other mitigation.