How to bring Canada’s Arctic in from the cold
The Arctic has long existed at the periphery of Canadian federal policy, occasionally receiving lip service but infrequently benefitting from Ottawa’s largesse. It is unusual then that Iqaluit has been host to major pre-election policy announcements by the leaders of the Liberal and Conservative parties. Is this a sign that Canada is ready to invest in its full potential as an Arctic nation?
Potentially, but only if investments go beyond military instillations and to the heart of what has so long kept the region at Canada’s periphery: linking the region to broader capital markets and supply chains.
The sudden uptick of political interest in the North is hardly a surprise. The long reigning theory of Arctic Exceptionalism — the idea that the region is free of geopolitical tensions even among unfriendly competing neighbours –— is on life support. Its vitals looked bad after Russia invaded Ukraine and was booted from the Arctic Council, leaving only NATO members in the Council’s good graces and the other half of the geographic Arctic out. Since then, Russia has been collaborating with China in northern military exercises. The United States, meanwhile, has taken a sudden and unexpected interest in northern territorial acquisition – Greenland perhaps by hook, Canada perhaps by crook.
It’s no wonder Prime Minister Mark Carney traveled north to announce new radar investments and Conservative Party leader Pierre Poilievre made a similar journey to unveil a new military-focused Arctic policy as a platform pillar. Canada’s current defence capabilities are perhaps best summed up by the allegory of Nanisivik: a naval refueling facility completed behind schedule to support Canada’s ice-breaking fleet and Arctic submarines with unheated refuelling tanks, which are only useable one month per year. So yes, military investments to secure sovereignty are table stakes as the Arctic heats up in more ways than one — however, radar sites and military bases are not the only strategic considerations if Canada wishes to become an Arctic power.
The Canadian Arctic faces other threats stemming from the region’s isolation, the very thing that once made it seem stable. In the spirit of the modern treaties Canada has entered into with First Nations and Inuit across the North, not to mention the democratic norm of consent of the governed, Canada cannot address these threats through unilateral policy promulgation and investments.
The sobering reality is that after decades of underinvestment, northern communities, most of which are Indigenous, lack basic infrastructure and are disconnected from the rest of Canada and its supply chains. The region’s remoteness, lack of enabling and hard infrastructure as well as supply chain gaps contribute to skyrocketing costs for daily living, high rates of poverty and limited economic potential. This plays out in a very real way when considering the more pronounced housing crisis in the North.
The ability to address these gaps is beyond the ability of northerners to do alone, mostly because closing the gap would require massive public spending by Ottawa (there are territorial debt caps and a limited tax base which is driven mostly by a handful of mines, and the threat of economic collapse is around the corner if closures outpace new projects).
The infrastructure gap means transformative economic projects — like the development of critical minerals that both of Canada’s leading political parties support — need massive investments to become realities, not to mention regulatory and permitting simplifications to make Canada better perceived as a place where development is not only possible but under the right conditions welcomed.
As a result, the region struggles to access domestic capital and foreign actors have moved in, presenting potential long–term foreign interference challenges in the region.
Ottawa is aware of this problem – in 2020, the Government of Canada blocked the sale of a Nunavut gold mine to Shandong Gold Mining Co. Ltd., a China-based mining company. China has invested in other Arctic mining plays, like the Nechalacho rare earth project. It isn’t the only country interested in filling Canada’s northern investment gap. In December, 2024, the United States’ Department of Defense invested in tungsten development in Canada.
Foreign ownership is not automatically bad — it facilitates access to markets and brings capital to the table — but the potential loss of sovereignty over the sale of critical minerals is worse than bad; it’s a national defence and self-determination issue.
And while being aware of the problem is good, fixing it would be better. This will require major policy re-thinks and actions, significant investments, and a political will that now appears to be on the table. It will likely take more than the loan guarantees that Carney and Poilievre currently support.
Canada needs to invest in solutions to these problems for the sake of Canada and needs First Nations and Inuit to be part of and to benefit from the decision-making process.
For Ottawa, this should be a matter of both reconciliation and national sovereignty — and a matter of strategic policy correction and pragmatism. These communities require investments that Ottawa has been reluctant to make, and they have the right to economic development, be it market-based development or the development of traditional economies.
Their priorities won’t be perfectly aligned so there are hard discussions to be had. But, as Arctic-interested competitors show greater willingness to test Canada’s Arctic resolve, now is not the time for any domestic policy maker to let perfect be the enemy of good.
Canada’s Arctic policies have not yet caught up to the new reality — a recently released Arctic Foreign Policy touted Canada’s military strength and assumed diplomatic channels could resolve Arctic border disputes with the United States. But Carney and Poilievre’s interest in the Arctic means that we might finally act as an Arctic nation, no matter who wins the next election.