01 -44 RENEW MAY-JUNE25 PT - Flipbook - Page 42
CLOSING SHOT
ARCTIC PRIORITIES
OLICYMAKERS ARE SCRAMBLING to 昀椀nd ways to boost
Canada’s growth and resilience in the face of President Donald Trump’s ultimatums. Here’s one
that touches on two of the key things we need to
do regardless of how the Trump tangle evolves:
Increase defence spending in the North to meet
our NATO commitments, and make infrastructure development a key part of this to military and civilian bene昀椀t
alike.
We know climate change is changing the North and
that, in a fractious world, protection of our northern
sovereignty is a practical necessity. Canada’s critical
mineral wealth is predominant there and will be the
crucial resource in the years ahead. Meanwhile, Canada
is a laggard at meeting the NATO standard for defence
expenditure of at least two per cent of GDP.
The Liberal government recognized this in its defence
update last fall, which focused on the Arctic. Conservative leader Pierre Poilievre pledged during the election campaign that a government led by him would boost defence
spending and “take back control of Canada’s North” goes a long way
toward bipartisan consensus.
There is one policy solution that responds fully: infrastructure
investment that serves our military and economic needs, boosts our
sovereignty and improves the lives of the 200,000 residents of the
north—more than half of whom are Indigenous. Examples abound of
what needs to be done: ports that serve our coast guard and communities; airports built to withstand melting permafrost and that can
accommodate C-130s, F-35s and commercial tra昀케c; rail and roads that
get residents and resources to those ports; power infrastructure that
ends diesel dependence and creates reliable energy for critical mineral
extraction; broadband that enhances communications for everyone.
Infrastructure that serves both military and civilian purposes can
count towards the two per cent NATO target. Military expenditure
has always been an economic lever for innovation and growth in the
United States. Canada can do the same.
Technically, this is known as “dual-use” expenditure. The NATO
de昀椀nition of military spending restricts what counts toward the two
per cent but it also provides plenty of room to be strategic, such as in
terms of joint procurement. Canadian investment in the critical minerals needed for NATO defence and for the industrial development of
NATO members, especially the United States, is unlikely to be deemed
mostly o昀昀side.
In normal circumstances, such expenditures would provide a good
reason for the United States to dial down its tari昀昀 threats. We can
be the reliable partner which supplies more of the critical minerals,
by Tim Murphy and Drew Fagan
Tim Murphy is Executive
Vice President and Chief
Strategic Affairs Officer
at Aecon Group Inc.
42
RENEW CANADA – MAY/JUNE 2025
Drew Fagan is a professor
of public policy at the
University of Toronto
and a senior advisor at
McMillan Vantage.
resources and electricity they need, and with a big new measure of
defence investment to boot.
These aren’t normal times, of course. But even if we aren’t doing it for
the sake of bipartisanship, we should be doing it for the sake of ourselves, and to warm the embers of multilateralism.
Major infrastructure is expensive, but a commitment to two per cent
will require major expenditure anyway—an average annual increase of
almost $15-billion through 2030, by one estimate. (Canada now stands
at 1.37 per cent. By contrast, the four Scandinavian countries all are well
over 2 per cent.)
The projects need to happen much faster too. We can’t a昀昀ord a repeat
of the Nanisivik Naval Facility at the top of Ba昀케n Island, which is now
expected to open in 2025 after being announced by the Conservative
government in 2007.
Acceleration requires political will and policy focus. Expedited
review processes are key but can only happen with the cooperation and
involvement of Indigenous communities, as Ottawa recognizes. Here
too, dual-use expenditures that provide dependable power and communications, as well as economic opportunity—including jobs—make this
more likely.
This kind of engagement is happening now. The North Early Warning System is being kept operational until it can be replaced as part of
NORAD renewal through a $500-million contract with Nasittuq Corp. It
is Inuit-owned and controlled by a Nunavut development corporation
and Atco Frontec, a division of Calgary-based Atco Ltd. with extensive
northern experience. The contract is hoped to be a model for what’s to
come.
Arctic construction is hard. Weather is harsh. Access is limited. The
costs of doing just about everything are more than in the south. But
Canada has world-leading infrastructure and construction companies
capable of taking on these challenges. This should be a Canadian priority for all seasons.
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