The Emerging Economy of the North American Arctic: Infrastructure Investment Analysis

Investment Analysis.jpg
[We] need roads, rail and pipelines to continue to harness our natural resources, which pay for much of what we take for granted and connect our country together.
— Dave McKay President and CEO of RBC commenting in reference to the April 2017 US tax legislation on Canada’s ability to remain competitive in the global economy

Project Summary

The global geopolitics and economics of the Arctic are undergoing significant transformation. Despite increasing global attention to the opening of a new blue ocean at the top of the world coupled by the already well-established high mineral potential, up to now, infrastructure from roads, to housing, ports, SAR, fibre optic cable, and other necessary components of a vibrant economy have been unevenly developed throughout the Arctic at best and in instances lacking altogether. Further to that, when it comes to the Canadian national discourse about the North American Arctic economy and the significant infrastructure deficit that persists, the conversations are rarely, if ever, discussed in the context of what the North has to offer and what it means for Canada’s economic role in the world. Instead, the Canadian Arctic is most often viewed solely as an aspect of the Federal government’s social obligations and not additionally as a significant economic opportunity for Canada and Canadians from the investment community to the tech sector.

The Infrastructure Investment Analysis addresses the Northern infrastructure gap and move these conversations forward by focusing on the how to finance the needed investment.

The Analysis will accomplish the following tasks:


To provide the means for Northern Indigenous Development Corporations, Northern political leaders, Northern resources development companies, and other Northern stakeholders to educate Bay Street and other financial entities about the investment opportunities and challenges of the Canadian North.



To bring Bay Street and international finance, Indigenous Development Corporations, and other Northern leaders together to the table to do the tough work to create new economic models of Public-Private Partnerships that are specific to and suitable for the North (models that include to means for Indigenous Development Corporations to be equity partners).


To help situate the discussion of the Infrastructure gap in the Canadian North in the context of the emerging economy of the North American Arctic as part of the larger global geo-political changes taking place in the Arctic. Placing Northern infrastructure needs in its global context will contribute to the aims of the Federal government - working in partnership with its Northern partners - to establish a long term (15-20 year) infrastructure development strategy for the region.


To work off of existing efforts (reports and other research) to create an inventory of infrastructure projects (recently completed and in various stages of development) in the North American Arctic. That inventory will be used to help create a strategic road map for development including the possibilities to bundle projects together and create a pipeline of potential projects – both of which are necessary to help attract and facilitate financing.

[T]he manner in which components of a northern corridor would be financed would depend on the type of infrastructure…pipelines and railways would generate revenue streams that would make them profitable, but that roads – which may generate revenue only if tolls are in place – are more like public goods; public goods typically require government financing…in certain cases, public-private partnerships are a potential approach, [but more] research is needed regarding this and other financing-related issues.

— ‘National Corridor Enhancing And Facilitating Commerce and Internal Trade’ The Standing Senate Committee on Banking, Trade and Commerce, June 2017


Why does the North American Arctic Need an Analysis? 

Up to this point, there does not exists a comprehensive infrastructure (including resource) inventory for the whole of the North American Arctic (Alaska, Canada and Greenland) nor has there been a concerted strategic infrastructure investment analysis completed to help guide the future economic development of the region.

Is North America the last region to look at it's Arctic? 

2016 Russia’s Ministry for Development of Russian Far East along with McKinsey & Company completed an economic feasibility study for the Northern Sea Route

2018 Nordic Council of Ministers released a Business Analysis for the Nordic Arctic

Polar route to beijing

Outside the Arctic region, other nations are also producing their own strategies for Arctic development. The Chinese government, steps ahead of Canada, has already laid out its long term vision for the Arctic and the role it intends to play there (see: China’s new Polar Silk Road Policy) as the once frozen Arctic Ocean transforms into a new global sea route. Understanding the resource potentials and new shipping access, China’s new ‘One Belt, One Road’ Policy for the 21st century includes the Arctic – a Polar Silk Route. ‘The Vision for Maritime Cooperation under the Belt and Road Initiative’ states that a ‘blue economic passage’ is ‘envisioned leading up to Europe via the Arctic Ocean.’ China is also actively pursuing new business relations and partnerships with all 8 Arctic states including Canada to finance, build, and ultimately control a transportation system for the region as well as its natural and human resources.

Why canada needs to look north 

China understands the Arctic holds vast quantities of the resources it needs to sustain and grow its economy and that a new global trade infrastructure system will be central to that success. The Canadian Federal government and Canadian financial institutions need to understand the critical value of its North and to work with Northern partners to help finance critical infrastructure needed for Northern communities to have prosperous and sustainable development and ensure Canada’s competitiveness in the global economy.

what is canada doing? 

The Canadian Federal Government has taken several steps in helping to identify the need for closing the infrastructure gap. In March 2017, Indigenous and Northern Affairs Canada published the Report ‘A new Shared Arctic Leadership Model’.[1] One of the main conclusions drawn from Minister Bennett’s Special Representative, Mary Simon, who authored the Report was the need to close the infrastructure gap. According to Simon, the Government of Canada in partnerships with Arctic governments and Indigenous leaders must ‘develop criteria for Arctic infrastructure projects that reflect the singularly unique context for infrastructure spending, the 'catching up’ nature of the infrastructure gap in the Arctic, and that corrects for the punitive nature of per capita allocations without base funding.’ Simon further made the point that ‘basic infrastructure gaps must be addressed to position the Canadian Arctic as an integral part of the global community.’

Already recognising many of Simon’s stated concerns, in December 2016, Prime Minister Trudeau committed the Liberal Government to co-developing a new Arctic Policy Framework dedicated to create new, earnest partnerships with the region’s Indigenous communities in Canada. Of the six core theme areas, two of those themes (comprehensive Arctic infrastructure and Arctic in global context) will benefit directly from the planned Arctic infrastructure Investment Analysis. The Framework, when completed, will provide an overarching direction to the whole of Government of Canada’s priorities, activities, and investments in the Arctic until 2030 including the creation of a sustainable Arctic economy.

in sum

There is a critical imperative for Canadian, Alaskan and Greenlandic stakeholders to work together to get out in front and lead the development in in the North American Arctic for the benefit of northerners and their countries. Finding the means for financing that development is imperative and the Infrastructure Investment Analysis will be a major contribution towards that goal. To fail to do so very well could result in non-Arctic countries owning public infrastructure and major developments in the region. Moreover, its critical importance reaches well beyond DC, Ottawa, or Nuuk. Most significantly, it a necessity for the future safety, prosperity, and well-being of the communities that call the North American Arctic home at a time when the world is looking with interest at what the Arctic has to offer.

In light of Canadian domestic realities and a changing global landscape the completion of a North American Infrastructure Investment Analysis will be a critical contribution to ensuring Canada’s competitiveness in the emerging market of the North American Arctic not to mention Canada’s competitiveness in the global economy as Dave McKay has argued. Perhaps most important, however, the Analysis will help ensure that the region is developed to the benefit of the North and in partnership with those that live there.


Advisory Committee:

Ø  Darrell Beaulieu, CEO, Denendeh Investments Incorporated
Ø  Brendan Bell, former CEO Dominion Diamonds
Ø  Nauja Bianco, Senior Adviser on Arctic and North Atlantic Affairs, Voluntas Advisory
Ø  Clint Davis, Partner & Managing Director, North35 Capital Partners
Ø  Tom Hoefer, Executive Director, NWT & Nunavut Chamber of Mines
Ø  Robin Goad, CEO, Fortune Minerals
Ø  Inuuteq Holm Olsen, Minister Plenipotentiary at the Greenland, Representation at the Danish Embassy in Washington, DC
Ø  Scott Northey, COO, Nunavut Resource Corporation
Ø  David Ramsay, Former Minister, Dept of Industry, Tourism and Investment, GNWT; Board of Directors, Fortune Minerals
Ø  Madeleine Redfern, Mayor, Iqaluit
Ø  David Sharpe, CEO, Bridging Finance
Ø  Hugh Short, CEO, Pt. Capital, Alaska




[1] Simon, Mary: