In advance of the Artic360 conference, taking place in Toronto February 10-12, 2026, CCPPP's Lisa Mitchell shares her thoughts on Arctic infrastructure and how the private sector, in particular P3s, can play a role.
If a silver lining can be found in recent geopolitical threats, it is that they have thrust the Arctic opportunity squarely into the centre of international diplomacy, sovereignty and security concerns for NATO countries.
With the world’s second longest Arctic coastline and the expected arrival of ice-free summers as soon as 2030, Canada finds itself in a delicate position.
The federal government must act — and in partnership with Indigenous communities, territorial governments and the private sector — to deliver on its defence and economic aspirations.
Since 2007, when Russia shocked the world by planting its flag on the seabed beneath the North Pole, Canada has taken steps in that direction. Successive governments have invested in enhanced Arctic surveillance and defence capabilities, such as the new Polar Max icebreakers set to arrive in 2030 and the Arctic Over-the-Horizon Radar project slated to go operational in 2029.
Yet infrastructure remains the Achilles heel of nation-building in the Arctic.
Across the territories, Canada lacks the basic foundations required for sustained development: seaports, airports, all-season roads, housing, energy transmission, fibre optic connectivity, firefighting capabilities, fuelling stations, clean water, wastewater treatment and solid waste management. Growing northern communities will also require schools, health centres, community centres, government offices and services. It’s a daunting list. And one that continues to grow.
The recently announced $1-billion Arctic Infrastructure Fund, which aims to support dual-use (military and civilian) transportation projects, is a start but cost estimates for the Grays Bay port and road project in Nunavut alone are in the $1-billion range with construction unlikely to begin before 2030.
Brendan Bell, CEO of West Kitikmeot Resources Corp., which is spearheading the project, has said he expects about 25 per cent of funding will need to come from private investment.
The 230-kilometre Grays Bay road is only one segment of the proposed Arctic Economic and Security Corridor, an all-season road linking Nunavut to the Northwest Territories and onwards to Yellowknife where it will connect with existing roads to Edmonton. The newly created Major Projects Office is supporting efforts to spur development of this corridor.
The opportunity for private sector investment in northern infrastructure is clear. But turning opportunity into delivery will require more than good intentions.
One of the most innovative and proven ways of collaborating in the North on major projects is public-private partnerships (P3s). For more than 20 years, P3s have proven pivotal in getting some of the toughest, most innovative projects off the ground in the region in partnership with Indigenous communities and companies. These include the first government buildings and employee housing for the new territory of Nunavut, the 1,400-km Mackenzie Valley Fibre Link (Canada’s first terrestrial fibre connection to the Arctic Ocean), the Iqaluit International Airport and the Tłı̨chǫ All-Season Road.
The Tłı̨chǫ project is particularly notable. It was one of the first P3s in Canada to include an equity investment by an Indigenous government and it incorporated an innovative climate change risk sharing mechanism.
Private financing brings discipline. When the private sector has “skin in the game,” projects are likely to be delivered on time, on budget and be well maintained. The long-term nature of P3 agreements also means a full costing of delivering long-term operations and/or maintenance is calculated and ringfenced before construction starts.
In addition, P3s also allocate the appropriate risk transfer to the party best suited to manage it and tap private sector expertise to drive innovation and efficiencies, leading to better projects and outcomes for Canadians.
Risk is always an important calculus for projects but building in the North poses unique challenges, such as building long-lasting assets on permafrost in a time of clime change, long supply chains and higher costs for materials, as well as the need to bring in outside workers to complement the region’s smaller workforce. P3 projects in the North, through strong collaborations between governments, communities and the private sector, have proven they can manage these risks and deliver.
Canada can also draw on proven innovations in P3 delivery from elsewhere in Canada to reduce risk and accelerate Arctic infrastructure development. This could include breaking large mega-projects into smaller, more manageable segment, adopting Progressive P3 models that enable early collaboration on design and pricing, and integrating user-pay mechanisms to support long-term operations and maintenance.
Experience delivering complex social, transportation and high security federal infrastructure demonstrates flexible P3 approaches can attract a broader pool of partners, strengthen cost certainty and support greater private-sector involvement in both economic and defence related projects in the North.
Just as important as how projects are financed and delivered, is how Canada’s governments work together to advance them. Arctic infrastructure will not succeed if federal departments and agencies operate in silos. In the absence of one centralized hub of expertise, government organizations will need to ensure they are aligned around shared priorities and sequenced decision-making.
To best attract private sector interest and encourage community support, the government must first articulate a clear Arctic infrastructure strategy. A credible whole-of government, whole-of-region Arctic strategy must ultimately translate into a visible and sequenced project pipeline, setting out how development is expected to roll out over the next five to 10 years. That pipeline, in turn, creates the market certainty investors require to commit long-term capital. Without this progression — from strategy to pipeline to certainty — private sector investment will remain cautious, and delivery timelines will continue to slip.
As NATO nations like Canada significantly step up defence funding to meet its commitment of five per cent of GDP by 2035, other government initiatives will inevitably feel the spending squeeze.
A recent UK report by EY-Parthenon warned the infrastructure funding gap there is steadily increasing, exacerbated by new UK defence spending commitments. Among its recommendations to government, EY-Parthenon advocates for greater use of alternative financing models like P3s.
Canada should follow suit.
In the Arctic, financing challenges are inseparable from the need to deliver tangible community benefit. As Nunavut Premier John Main said last week: “We can’t have state of the art, military technology, flying in the face of communities that are impoverished and in need of basic infrastructure, for drinking water, for housing, energy security.”
Dual-use infrastructure offers a way forward. By using a percentage of its NATO funding commitment to build assets like airports, roads, ports and telecommunication in the Arctic, Canada will provide benefits to its military, resource development and local communities.
But these megaprojects will not succeed if other vital supporting community infrastructure like housing are not built in parallel and in genuine partnership with Indigenous communities. In fact, development in the North should be viewed as an integrated system not as a series of disparate projects. Using P3s are an ideal way to deliver projects that deal with the risks and build sustainable infrastructure for the long term.
With time of the essence in the Arctic and the ever present issue of limited government funds, this is the time for the federal and territorial governments to embrace alternative delivery models like P3s to move forward for projects in the territories.
Done right, this approach can support reconciliation, strengthen sovereignty and unlock long-term economic opportunity.
This may be the most consequential nation-building challenge Canada faces in the 21st century and success will depend on governments, Indigenous partners and the full breadth of Canada’s private sector working together to deliver it.
