Prioritizing Canada’s investment in Arctic infrastructure – Atlantic Council

Report on Prioritizing Canada’s Investment in Arctic Infrastructure with Emphasis on Sustainable Development Goals (SDGs)

Executive Summary

1. Canada’s 2025 federal budget commits to a “generational investment” in infrastructure, allocating significant funds for Arctic dual-use infrastructure.
2. This investment supports multiple government objectives: enhancing military presence in the north, unlocking critical mineral resources, and creating economic opportunities for Arctic communities.
3. Successful implementation requires translating funding into projects that align with Canada’s climate goals and the Sustainable Development Goals (SDGs).

Introduction

The Canadian government, under Prime Minister Mark Carney, unveiled a comprehensive federal budget in November 2025 that prioritizes long-term prosperity through infrastructure investment. This budget emphasizes infrastructure development across pipelines, ports, and roadways, with a particular focus on the Arctic region. The approach integrates economic ambition with military necessity, aiming to meet NATO defense spending commitments and expand Canadian exports to non-US markets.

Arctic Infrastructure Investment and Sustainable Development Goals

Challenges and Opportunities in the Canadian Arctic

• Canada’s Arctic faces significant climate change impacts, warming nearly four times faster than the global average, affecting infrastructure viability (SDG 13: Climate Action).
• Infrastructure development in the region is costly due to geographic and environmental challenges, requiring innovative and sustainable solutions (SDG 9: Industry, Innovation and Infrastructure).
• Investment in Arctic infrastructure supports military and civilian dual-use purposes, contributing to regional security and economic development (SDG 16: Peace, Justice and Strong Institutions; SDG 8: Decent Work and Economic Growth).

Key Infrastructure Initiatives

1. Arctic Infrastructure Fund: A C$1 billion allocation over four years to Transport Canada for major northern transportation projects including airports, seaports, and all-season roads.
2. Mackenzie Valley Highway: An all-weather highway extension connecting remote communities, projected to cost C$1.65 billion, primarily federally funded.
3. Port of Churchill Plus: Upgrades to Canada’s only Arctic deepwater port, enhancing trade corridors and marine icebreaking capacity to support year-round operations.

Integration of Sustainable Development Goals in Arctic Infrastructure

• SDG 9 (Industry, Innovation and Infrastructure): Building resilient infrastructure that supports economic growth and innovation in the Arctic.
• SDG 13 (Climate Action): Incorporating climate security and sustainability in infrastructure planning to address permafrost thaw, sea-level rise, and reduced sea ice.
• SDG 7 (Affordable and Clean Energy): Promoting low-emission energy projects such as nuclear reactors and low-carbon liquefied natural gas to support Canada’s clean energy ambitions.
• SDG 15 (Life on Land): Mitigating environmental impacts of military and infrastructure activities through operational zones and environmental countermeasures.
• SDG 10 (Reduced Inequalities) and SDG 11 (Sustainable Cities and Communities): Engaging Indigenous and local communities in infrastructure development to ensure projects meet local needs and promote economic reconciliation.

Recommendations for the Department of National Defence and Canadian Armed Forces

1. Incorporate Sustainability and Climate Security in Arctic Infrastructure Planning

Given the dual-use nature of Arctic infrastructure, it is critical to mitigate environmental impacts such as noise pollution, air emissions, and habitat disruption. Utilizing resources like NATO’s Climate Change and Security Centre of Excellence (CCASCOE) can help establish best practices and standards for sustainable operations in the Arctic region.

2. Include Local Communities’ Expertise and Experiences in Infrastructure Development

Indigenous and local communities possess invaluable knowledge of the Arctic environment and its challenges. The government’s allocation of C$40 million over two years to support Indigenous capacity building and consultation is a positive step. Ensuring community involvement throughout project planning and implementation will enhance social inclusion and resilience.

3. Recognize Critical Minerals as a Driver of Infrastructure Development

Canada’s northern territories hold significant deposits of critical minerals essential for economic development and national security (SDG 8: Decent Work and Economic Growth). The Critical Minerals Production Alliance aims to strengthen supply chains through international partnerships. Infrastructure projects must balance economic ambitions with environmental stewardship to avoid compromising Canada’s green goals.

Challenges to Sustained Infrastructure Investment

• Political challenges due to minority government status and narrow budget approval highlight the need for sustained commitment to infrastructure funding.
• Projected public sector spending cuts may impact the capacity to maintain and expand infrastructure projects.
• Balancing economic growth with environmental sustainability remains a core challenge, particularly in the critical minerals sector.

Conclusion

Canada’s investment in Arctic infrastructure represents a strategic opportunity to advance multiple Sustainable Development Goals, including climate action, economic growth, innovation, and social inclusion. While the initial funding through the Arctic Infrastructure Fund is a significant start, ongoing and increased investment will be essential to realize Canada’s ambitions in the region. Integrating sustainability principles and community engagement will be critical to ensuring that infrastructure development supports both national security and the well-being of Arctic communities.

About the Author

Jason C. Moyer is a nonresident fellow with the Transatlantic Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 9: Industry, Innovation and Infrastructure
   • Investment in Arctic infrastructure including pipelines, ports, roadways, airports, seaports, all-season roads, and highways.
   • Development of dual-use infrastructure for both civilian and military purposes.
2. SDG 13: Climate Action
   • Incorporation of climate goals and sustainability into infrastructure development.
   • Addressing climate change impacts such as permafrost thaw, less sea ice, and rising sea levels.
   • Supporting clean energy projects and carbon capture technologies.
3. SDG 8: Decent Work and Economic Growth
   • Economic opportunities for Arctic communities through infrastructure and mineral resource development.
   • Enhancing trade corridors and export capacity.
4. SDG 16: Peace, Justice and Strong Institutions
   • Improving military presence and defense spending commitments in the Arctic region.
5. SDG 17: Partnerships for the Goals
   • International cooperation through NATO and the Critical Minerals Production Alliance.
   • Engagement with Indigenous and local communities in infrastructure planning.
6. SDG 15: Life on Land
   • Mitigating environmental damage from military and infrastructure activities in fragile Arctic ecosystems.

2. Specific Targets Under Identified SDGs

1. SDG 9: Industry, Innovation and Infrastructure
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure.
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean technologies.
2. SDG 13: Climate Action
   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
   • Target 13.2: Integrate climate change measures into national policies, strategies and planning.
3. SDG 8: Decent Work and Economic Growth
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation.
4. SDG 16: Peace, Justice and Strong Institutions
   • Target 16.6: Develop effective, accountable and transparent institutions at all levels.
   • Target 16.7: Ensure responsive, inclusive, participatory and representative decision-making.
5. SDG 17: Partnerships for the Goals
   • Target 17.16: Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships.
   • Target 17.17: Encourage and promote effective public, public-private and civil society partnerships.
6. SDG 15: Life on Land
   • Target 15.1: Ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems.

3. Indicators Mentioned or Implied to Measure Progress

1. Infrastructure Investment and Development
   • Amount of funding allocated and spent on Arctic infrastructure projects (e.g., C$1 billion over four years for Arctic Infrastructure Fund).
   • Number and progress status of major infrastructure projects such as the Mackenzie Valley Highway and Port of Churchill upgrades.
   • Extent of transportation infrastructure coverage in the Arctic region (airports, seaports, roads, highways).
2. Climate and Environmental Impact
   • Rate of warming in the Canadian Arctic compared to global average (noted as nearly four times faster).
   • Implementation of climate change mitigation measures such as carbon capture, methane regulations, and industrial carbon tax adherence.
   • Environmental assessments and mitigation measures for military and infrastructure activities (e.g., noise pollution, soil compaction, vegetation damage).
3. Economic and Social Indicators
   • Contribution of mineral resources to Canada’s nominal GDP (noted as 5%).
   • Levels of Indigenous and local community involvement and consultation in infrastructure projects.
   • Trade volumes and export diversification through Arctic ports and corridors.
4. Defense and Security
   • Defense spending as a percentage of GDP (NATO commitment of 1.5%).
   • Military presence and capacity in the Arctic region.

4. Table: SDGs, Targets and Indicators

Source: atlanticcouncil.org