The Scramble for the High North: Canada’s Arctic Policy

Summer 2020 was the Arctic’s second-worst season on record. Sea ice extent covered a total of 5.08 million square kilometres, an 11% reduction compared to the previous year. The Arctic has been melting for decades, and there is evidence that even if greenhouse gas emissions were eliminated, it will only continue to do so. Out of the melting northern ice emerges more than an environmental disaster. As the Arctic clears out, countries all over the world begin to realize the economic and geopolitical potential of the region. Oil and gas reserves, maritime trade routes, and the symbolic top of the world count among the region’s treasures, hidden under the ice for millions of years.

The Arctic region is defined by the boundaries of the Arctic Circle and represents the most northern part of the Earth. Eight countries, Denmark, the USA, Canada, Russia, Iceland, Sweden, Norway and Finland possess territories within the Arctic Circle, however, only five of them, Norway, Denmark, Russia, Canada, and the USA are bordering the Arctic Ocean. This factor is significant; if the Arctic region is often seen as plentiful in natural resources, most of them lie beneath the water, and the thick ice layer covering it. As one of the states bordering the Arctic Ocean, Canada has the legitimacy to claim part of this territory and resources. With conflict of interests, between countries competing for territorial control, the boundaries in the Arctic are not straightforward to establish. Every arctic nation is disputing territorial claims, desperately trying to enlarge their share of the top of the world, for different reasons and objectives.

The Arctic is said to hold 13% of the world’s undiscovered oil reserves, and 30% of its undiscovered natural gas. The region also holds large quantities of diamonds, iron, nickel and other minerals as well as important fish stocks and enormous quantities of fresh water. Currently, the Arctic region provides an annual total economic value of $290 billion to those who exploit it; and it is far from being exploited to its full potential. However, there is way more to the Arctic than natural resources.

The Northwest Passage (NWP) connects the Atlantic and Pacific Oceans by passing through the Canadian Arctic Archipelago. It could shorten the travel distance between Europe and Asia by 4,000 kilometres, leading to tremendous time and cost savings for cargo ships. By 2030, it will host 2% of the world maritime trade, and this figure will reach 5% by 2050. The nation controlling the NWP could have in its hands one of the next jugulars of the world’s economy. The NWP, along with its eastern counterpart, the Northeast Passage (NEP), which goes along the Russian coast, could one day supplant the traditional trade routes going through the Suez and Panama canals, thus making the Arctic a truly vital region for global trade.

All Arctic nations look at the region’s potential with deep interest, and Canada is no exception. Its geographic location gives it control over the largest part of the NWP, along with large deposits of oil and gas off the coasts of Nunavut and Alaska. Why then, isn’t Canada fully exploiting the region’s resources? According to Mrs. Jutta Wark, Director of Nordic and Polar Relations at Global Affairs Canada, this potential still lays frozen under the ice. The Canadian part of the Arctic is the slowest to melt due to climate change, meaning that the NWP is still unfit for the transit of large commercial vessels. Moreover, climate change has made the ice sea covering surface less predictable over the years, with part of the passage unexpectedly freezing and others melting. This uncertainty could pose a major danger to any ship travelling these waters most of the year. While the NWP’s future potential is very real, Mrs. Wark argues, it is still years from being achievable.

“We're starting from a place where the ocean and the Arctic ecosystems will be protected by default.” This quote from Justin Trudeau at a Yellowknife town hall in 2017 summarizes Canada’s Arctic policy. Since the return of the Liberal Party in power in 2015, the country has focused its efforts on preserving the region’s environmental integrity. In 2016, Trudeau enforced a moratorium on new offshore oil and gas drilling activities, indefinitely barring the region from further exploitation. The federal government’s presence in the region mostly consists of maritime biodiversity preservation activities, emergency measures for transiting vessels and frequent assistance to local first nation communities.

If Trudeau’s moratorium certainly had an impact on the region’s activities, it probably didn’t touch many companies. On Canada’s side of the Arctic, the business potential is still quite weak. The region possesses few existing infrastructure, and local investments are costlier than anywhere else in the country, due to access difficulties and harsh climate. As of now, trying to extract the large quantities and oil and gas in the Canadian Arctic would prove a costly and risky endeavour, that few investors dare to attempt. This contrasts with other Arctic nations, mainly Russia, Norway and the US, who all benefit from better conditions and accessibility, and don’t hesitate to conduct major oil drilling operations in their parts of the Arctic.

According to the International Laws of the Sea (UNCLOS), each country has the right to an exclusive economic zone (EEZ) of 200 nautical miles off their shores. Whatever lays beyond it up to debate, and every Arctic nation has claimed territories beyond their EEZ. When territorial claims overlap, the border is usually determined by the UNCLOS, and with the scientific examination of the continental shelf, which can extend the legitimacy of a country over a body of water. Canada has had such territorial disputes with Denmark, who has a claim to the Arctic due to its ownership of Greenland, and with the United States, but those have been easily settled in the Arctic Council. A more serious dispute, however, concerns ownership and control of the NWP. While the federal government had argued that Canada’s control of the passage is beyond question, the US has continuously contested this view, claiming that it should instead be an international body of water. The US has applied this principle of “freedom of navigation” in other cases around the world and pushes to apply it in the Arctic as well. An internationalized NWP would be strongly beneficial to the USA, as it could then use it to transit military vessels to bolster its Arctic presence. However, Canada has stood firm, even renaming the NWP the “Canadian Northwest Passage”. In 1988, both countries settled that they “agreed to disagree”, and that despite their differences, they would continue to collaborate in the Arctic region. This fragile accord has been held for now, but as the NWP rapidly gains in importance in the next years, the issue might be reopened and lead to further disputes.

Despite conflicting territorial claims, the Arctic has remained a low-tension zone, characterized by dialogue, mutual respect, and a general commitment to the UNCLOS. All nations are represented in the Arctic Council, an intergovernmental forum dedicated to Arctic affairs, where they settle disputes and discuss future Arctic policies. Despite complicated relations between NATO countries and Russia, which is a dominant player in the Arctic region, multilateral cooperation on issues such as wildlife protection and navigation regulations are common and executed in good faith.

As the years go by, the economic and geopolitical potential of the Arctic becomes increasingly evident, and so is the desire of multiple nations to acquire the largest possible share of the top of the world. For Canada however, the scramble for the Arctic has not quite begun. The Trudeau administration has adopted an Arctic policy of environmental protection, with low levels of economic development and military presence. The Arctic’s resources, protected by the region’s dangerous nature and harsh climate, are still inaccessible to Canadian companies. This natural barrier has also kept the Arctic nations in a climate of cooperation and low tensions, with no prospects of conflicts ahead. The ice is melting, and it is melting fast. As the Northwest Passage slowly clears out, and natural resources become accessible, this peaceful situation may be pushed over the edge. Canada might be facing increased pressure and territorial challenges from other countries and might have to tighten its grip on the Arctic to protect its claim to the world’s northern region.