Bell Canada and Nortel announced today they will launch a free municipal wireless network in Chapleau, Ontario, as part of a test bed environment to study the impact of technology on rural towns.

The aptly named Project Chapleau will launch this year using Nortel’s mesh networking equipment and service from Bell Canada, both of which are being provided at or below cost. The network initially will be accessible only through laptop cards, but eventually will include support for other wireless devices including Wi-Fi handsets.

Among the major goals of the project is to give Chapleau, a town of 3000 that sits within the Boreal Forest Region and the Arctic Watershed, a way to promote economic diversity. Like many small towns across Canada, Chapleau’s main industry is forestry. However, at a launch event today, Mayor Earle Freeborn said the city wants to draw high-tech firms and increase tourism with the network.

“We’re trying to create a long-term sustainable model,” he said. “Chapleau is known locally for its natural resources, but has a hard time marketing nationally and internationally.”

Bell Canada, which is donating its service to the project, wants to use the city as a potential example for others.

“We want to make this a showcase, and in order to make that happen, we thought we had to donate the capital and operating expenses,” said Lawson Hunter, executive vice president and COO of BCE and Bell Canada. “We also want to be able to study this to see what works and what doesn’t.”

The network also will be a showcase for Nortel. While the company has sold similar systems to similar U.S. cities such as Marshalltown, Iowa, Project Chapleau is the first such installation on its Canadian home turf.

“Fundamentally rural communities are important to the economics of Canada,” said Brian McFadden, chief research officer for Nortel.