Building for Tomorrow
Issue 10 | July 2026

By: Ryan Workman, Shravya Verma

Recent strategic and geopolitical considerations have driven a surge of Canadian interest in developing the Arctic. This surge is the latest in a long history of attempted development to further grow Canada’s resources, trade and sovereignty.

Although momentum toward realized northern development is building, this newfound passion begs the question: if the Arctic is so important, why hasn’t Canada developed it already?

Canada’s Arctic development history

In 1880, Britain transferred ownership of the islands of the Arctic Archipelago to Canada. Since then, several key events have set the stage for the Canada’s current Arctic aspirations, including:

  • The Klondike Gold Rush of the 1890s, which sparked considerable interest in Arctic resources
  • The establishment of Arctic outposts in the early to mid-1900s to reinforce Canada’s sovereignty, including a post office on the Bache Peninsula (despite no Canadian living within 100 kilometres of the office at the time)
  • The opening of the Port of Churchill in 1931, which failed to live up to economic expectations over the next several decades

A major push for Arctic development came from Prime Minister John Diefenbaker’s 1958 Roads to Resources program. The project significantly extended Canadian northern infrastructure over the next several decades. However, enthusiasm for Arctic development waned due to lower-than-expected resource returns and higher social and environmental costs. For more than half a century, national ambitions for the Arctic subsided, but geopolitical change in the 2020s reignited interest.

The cost of northern development

Building infrastructure in the Arctic has always been expensive.

Arctic construction faces a variety of physical barriers. Harsh winters restrict the building season to the summer months. However, more than 800 kilometres of roads are built on ice and permafrost, so many transportation networks are only accessible in the winter. As a result, there’s limited access to the Arctic in the summer building season, when most development would take place. In addition, new and existing Arctic infrastructure must contend with thawing permafrost, which causes frozen soil to become muddy and unstable.

The lack of basic infrastructure in the Arctic is something of a self-fulfilling prophecy. Beyond the absence of a fully developed transportation network, other challenges in Canada’s Arctic include an underdeveloped electrical grid, limited medical facilities and unreliable access to broadband internet. Without these services, development costs increase.

Economic challenges

The lack of infrastructure intertwines with other issues facing the small population in the North. The poverty rate in the territories was double the Canadian average in 2023 (22.8 per cent versus 10.2 per cent). In Nunavut, in particular, nearly 50 per cent of the population fell below the poverty line.

In 2025, educational achievement was also below average in Nunavut and the Northwest Territories (N.W.T.), where 42 per cent and 15 per cent of the population, respectively, had not graduated from high school.

As a result of underdeveloped infrastructure and a lack of educational and vocational opportunities, many young people leave Northern Canada in search of a better life elsewhere. Due to a shortage of workers in the North, infrastructure projects often require temporary labourers from other parts of Canada. This constitutes an additional cost for infrastructure projects and disconnects communities from many of the economic benefits of regional development.

North-south relations

In the past, the well-being and prosperity of citizens in the Arctic have generally been treated as a matter of secondary importance to other objectives. Recent attention is largely driven by the need to access resources, enhance security and expand trade. Historically, relations between the territories and the federal government have been characterized by southern interests overriding local development needs, especially those of local Indigenous Peoples who constitute more than 50 per cent of the territories’ population. Examples include:

  • Federal efforts in the 1950s to establish permanent settlements deprived Inuit communities of traditional housing and failed to properly develop new accommodations. Homelessness and overcrowding remain a problem to this day.
  • Devolution of governance authority, the transfer of significant decision-making responsibilities from the federal government to territorial governments, occurred in 2003 and 2014 in the Yukon and N.W.T. respectively, and devolution negotiations are still ongoing between Canada and Nunavut.

This history has hindered the growth of healthy, prosperous communities that would most meaningfully give Canada a presence in the Arctic.

The new Arctic push

External forces have driven a renewed interest in Arctic development in Canada. For these new northern initiatives to succeed, however, it is essential that we understand the factors that have undermined previous efforts to build up the North. Does Canada have sustained interest in Arctic development, or will the current attention fade as it has many times before?

In the first issue of our Northern Infrastructure series, we defined the Arctic and explored some of the factors driving this interest. Watch for the third and final part of this series, which will review the projects and programs that have been proposed as part of Canada’s push to develop the Arctic.   

Each month, Building for Tomorrow explores new developments in trade-enabling infrastructure in Canada, such as the rationale behind national projects, negotiations and agreements between different Canadian jurisdictions and developments in approval processes and policy.

This issue of Building for Tomorrow was written by Ryan Workman, a policy analyst, and Shravya Verma, a summer intern, with Canada West Foundation. If you have any developments you’d like to see featured or topics that you think should be covered, please send them to Ryan, at workman@cwf.ca.

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Further reading