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Executive Summary

Canada’s long anticipated Defence Policy Update was released on April 8, 2024. It contains a clear emphasis on the issues of Arctic security and sovereignty, backed up by a commitment to modernize the NORAD defence systems suite. Canada’s role in that modernization includes a significant roll-out of defence infrastructure in the Arctic, including radar sites, airstrips, and other facilities.

Much ink has been spilled analyzing the strategy. A common thread has emerged: while there is much to applaud about the contents of the document, there is good reason – given recent history – to doubt whether what’s written will actually be delivered in a successful and timely manner.

One particular risk concerns the development of dual-use infrastructure in Canada’s North. While the Government of Canada has clearly identified this as a goal of NORAD modernization, there are concerns within the Department of National Defence (DND) that it may conflict with operational and security imperatives.

To advance the conversation between Inuit rightsholders and the DND and move towards consensus on the plan, the Inuit Development Corporation Association (IDCA) is co-hosting an event on NORAD modernization and the North on May 27, 2024, with the Macdonald-Laurier Institute, an Ottawa-based think-tank. This commentary serves as a primer for the event.

Defence Policy Update

After considerable delay and back-and-forth between the Department of National Defence and the Prime Minister’s Office, the Defence Policy Update (DPU) was released on April 8, 2024.

As one opens the document, the symbolic overtones become clear: this is a strategy where Arctic security and sovereignty are front and centre. From the title (Our North, Strong and Free), to the cover (northern lights dancing over a naval ship), to the first heading (“Climate Change and its Destabilizing Impacts on our Arctic and North”), the Canadian Arctic is presented as on the front lines of an increasingly hostile world. The DPU asserts that the Canadian military’s most urgent and important task is “asserting Canada’s sovereignty in the Arctic and northern regions.”

Paired with the focus on protecting Canada’s and NATO’s northern flank is a commitment to modernize the North American Aerospace Defense Command (NORAD), which provides joint aerospace and maritime warning and control for continental defence. NORAD modernization is a priority of Canada’s closest ally and security partner, the United States, and so it is for us, and not a moment too soon: our adversaries, foremost among them Russia and China, have developed and are continuing to enhance new capabilities that could exploit the gaps in our domain awareness and response capacity in the Arctic if we do not urgently act.

When then Minister of Defence, Anita Anand, first announced Canada’s plan to modernize Canada’s continental defence capabilities in June 2022, the inclusion of Indigenous and northern governments was a pillar of the plan: “to ensure that new infrastructure fulfills the needs of our military and maximizes broader benefits for Canadians, we will deliver these initiatives working closely with provinces, territories and Indigenous communities.”

These statements reflect the hope and expectation that the tens of billions in military investments announced thus far for NORAD modernization will contribute to northern development: that infrastructure for transportation, communications, and energy will be developed; that contracts will be granted to northern and Indigenous businesses; and that human and capital resources will be located in the North in ways that boost the region’s resilience and vibrance.

The Standing Committee on National Defence, in its 2023 study on “A Secure and Sovereign Arctic,” articulated as much in its recommendation:

• That the Government of Canada, when and where possible, in collaboration with territorial and Indigenous governments, as well as Indigenous development corporations, ensure that military infrastructure in our Arctic include dual-use benefits to close the infrastructure deficit in Arctic communities. (#13)

It further recommended:

• That the Government of Canada undertake a comprehensive survey of our infrastructure, including military, civilian, and corporate holdings, as well as natural resources, mining, and mineral operations in our Arctic for the purpose [of] forward planning for NORAD modernization, developing a strategy for critical infrastructure investments and protecting Canadian interests from malign foreign actors (#5);
• That the Government of Canada, in consultation with Northern and Indigenous communities as well as Indigenous leaders, rapidly increase the pace of development and deployment of clean and renewable energy sources, including possibly Small Modular Nuclear Reactors for the Canadian Arctic in order to provide the clean energy necessary to support NORAD modernization and to stabilize local energy infrastructure needs (#16); and
• That the Government of Canada work with Indigenous-led corporations for the provision of subsea fiber [sic] optic and other information technology infrastructure projects to provide increased and affordable Internet coverage across the Arctic (#17).

At a visit to Yellowknife in the days following the DPU announcement in April 2024, Northern Affairs Minister Dan Vandal further affirmed there would be “significant opportunities to invest in multi-use infrastructure” to support the military’s operations in the North. But as the CBC pithily pointed out, “Vandal did not explain what those opportunities would involve.”

The DPU does not address the recommendations and exhortations of parliamentarians to develop multi-purpose northern infrastructure in any concrete fashion, although it does repeat them, especially in the context of northern operational support hubs. Given Canada’s mixed track record of defence project and procurement delivery, there is skepticism as to whether the DPU will be delivered. One significant contributor to past failures has been a lack of coherence between political and departmental goals. However, in the case of multi-purpose infrastructure, there is reason to believe that a common view that supports both the needs of DND and the goals of Parliament is possible.

DND Priorities

The purpose of NORAD modernization and the associated spending is to defend Canada and the United States from traditional security threats from our adversaries, including, but not limited to, China and Russia. These threats are real and growing and require urgent action to ensure we can appropriately defend our people and our critical infrastructure from attack, wherever they are in North America.

That in turn requires an investment in sensors and military basing in Canada’s Arctic frontier to face those adversaries. DND must have the capability to operate across that vast region in order to respond to any threat and must be able to securely base top-secret weaponry there without fear of those secrets СÀ¶ÊÓƵ compromised. Those legitimate security imperatives preclude the dual use of secure facilities by both DND and local communities.

Inuit perspectives

The base infrastructure grid – the network of transportation, communication, power, and water lines that southerners take for granted – does not extend into Canada’s Arctic. Many Inuit communities, small by southern standards, are entirely off the grid and not connected to the rest of Canada by road, rail, fibre optic cable, power line, or water supply.

In total, there an infrastructure deficit of $75.1 billion across the Inuit homeland as estimated by the Inuit Tapiriit Kanatami. As a result, any applicant proposing to build new community infrastructure must submit plans demonstrating that the community’s local base infrastructure is sufficient to support the new development, or alternatively, that the plan includes funding for whatever additional base infrastructure that’s required. By doing so, the community ensures that it will not be stretched beyond the breaking point to support the new development, and that the development will in fact contribute to growth of the community at large.

Despite these hurdles, the regional business economy across Canada’s Arctic has enjoyed impressive growth over the past decade, and now includes over 100 Inuit-owned businesses that specialize in solving those same problems. These include transportation, logistics, infrastructure development, and in-service support companies, each of which has been identified as critical to NORAD modernization.

Arctic Dual-Use Infrastructure

There is a long history in the North American Arctic of military investments contributing to nation-building, particularly during the Second World War and the Cold War. A major impetus in the Second World War was the Japanese attack of the Aleutian Islands in 1942, as well as the bombing of Pearl Harbor, which spurred the US government to enlarge airports in Fairbanks and Anchorage as well as build the 2450-kilometre Alaska Highway from northern BC, through the Yukon and into Alaska. The construction of the Alaska Highway was considered the most expensive project of the Second World War, costing approximately $185 million at the time.

Another major project was the Distant Early Warning (DEW) Line, a system of radar stations built above the Arctic Circle, roughly along the 69th parallel, in northern Canada, Alaska, Greenland, Faroe Islands, and Iceland, to detect Soviet missiles and bombers during the Cold War. By 1993, the DEW line had transitioned to the North Warning System.

Dual-use infrastructure for northern development is not a 20th century phenomenon. In 2018, the U.S. Department of Defense signed a Statement of Intent on Defense Investments in Greenland that would see it pursue “potential strategic investments vigorously, including investments that may serve dual military and civilian purposes.” This was spurred by Chinese interest in developing airports in Greenland, which was subsequently confounded, and related to the presence of significant rare earths deposits on the island and its strategic location and nature.

In Alaska, the U.S. Army Corps of Engineers expects to award US$125 million for civil works this year alone, part of nearly US$1 billion for critical civil works and disaster relief projects in the coming decade. This includes the Port of Nome Modification Project that will provide larger vessels with improved access to the existing harbour.

Russia is also leveraging its Arctic infrastructure and assets both for economic and military uses. For example, its icebreaker fleet is operated by Atomflot, a civilian company that is a subsidiary of the Russian nuclear energy giant Rosatom and serves a primarily economic purpose. In addition, much of the recently modernised infrastructure along the Northern Sea Route (NSR), including some ports and airports, is dual-use; and a state program that concluded in 2015 created a dual-use unified automated radar system.

A way forward for multi-use infrastructure in Northern Canada

As key NORAD modernization partners, there must be a mutual understanding between DND and the Inuit to ensure base grid infrastructure is sufficient to support new facilities. This includes building the necessary upgrades and enhancements into infrastructure development plans where needed. Essential base infrastructure is not, and should not be, out of scope.

Its remoteness, vastness, severe climate, and Indigenous population makes the Canadian Arctic an incredibly unique region. As such, traditional southern solutions may not always be the best fit. Indeed, there is a place, and a unique opportunity, to tap into new and innovative solutions to address the unique challenges of Northern infrastructure.

In the 1840s, the crew of the doomed Franklin expedition froze or starved to death in the Canadian Arctic while searching for the Northwest Passage. The expedition failed in part because Sir John Franklin and his officers shunned the advice and traditional knowledge of the Inuit of the region. History offers valuable lessons, and DND requirements managers should be encouraged to work with and learn from local Inuit infrastructure developers.

For instance, Inuit benefit agreement clauses could, and should, be included in NORAD Modernization contracts. These clauses benefit both parties by requiring a role for Inuit while ensuring that DND’s needs are met. They also encourage Inuit businesses to live up to their obligations for workforce and community development.

The actual construction of infrastructure is obviously critical in advancing northern security and development. However, the development of new assets and solutions through the military’s ability to invest in research and development of new products, and/or be an anchor customer to help a new technology reach a critical mass in terms of orders, is also essential. Among the many potentially game-changing technologies that could address the logistical challenges of remoteness are:

• Small modular reactors to supply clean, firm, dispatchable power and heat in extreme conditions, with years in between refuelling;
• Airships that can lift and transport heavy weights, stay aloft for lengthy periods if needed for surveillance, require limited landing infrastructure, and can address the growing challenges from shorter ice road seasons, low river levels for barges, and unpredictable sea ice conditions; and
• Fibre connectivity, including through subsea cables, to provide better reliability, redundancy, and capacity for information technologies.

The private sector, including mining companies, often face similar logistical challenges to operating effectively in the north. Broadly, their infrastructure needs falls into the categories of energy, transportation, and communications. It is cost prohibitive to replicate the kinds and levels of infrastructure available in the thin southern strip of Canada that is most populated. As such, finding new, innovative, and coordinated solutions to these infrastructure challenges benefits Canadians’ security, economy, and society.

Procurement and partnerships

In addition to developing infrastructure, technology, and research and development that can be leveraged for civilian benefit in northern Canada, procurement is also an essential part of the equation. Military goods and services in and for the Arctic region should be procured from northern and Indigenous businesses where they can fulfill those needs, including through partnerships or joint ventures with other contractors who may bring complementary skills and resources.

While some may still hold views that Indigenous and northern procurement are burdensome or time consuming, others recognize that Inuit participation is an asset, not a liability. Procuring from Inuit businesses provides the significant benefit of drawing on local expertise for what are often challenging contracts to fulfill; northern and Indigenous contractors have experience in getting the job done under the logistical constraints inherent in the North. Indigenous procurement also generates social licence for projects, ensuring they can get done without local opposition or delay; provides training and employment for local workers, building up the workforce for future operations and projects; and generates revenues and wealth for local businesses and Indigenous organizations, contributing to community development. These are overwhelmingly positive attributes and contribute to Canada’s overall security to boot.

In addition, Indigenous procurement is a legal and policy requirement. Article 24 of the Nunavut Agreement asserts that the “Government of Canada shall develop, implement or maintain procurement policies respecting Inuit firms for all Government of Canada contracts required in support of its activities in the Nunavut Settlement Area” and shall reflect, to the extent possible,” the following objectives:

• increased participation by Inuit firms in business opportunities in the Nunavut Settlement Area economy;
• improved capacity of Inuit firms to compete for government contracts; and
• employment of Inuit at a representative level in the Nunavut Settlement Area work force.

The Government of Canada has also set a mandatory procurement target to ensure that a minimum of 5 percent of the total value of contracts are held by Indigenous businesses. And the 2023 procurement of the North Warning System In-Service Support (NWS ISS) included the requirement for an Inuit benefits plan requiring the prospective contractor to commit to:

long-term, sustainable and meaningful economic benefits for Inuit Beneficiaries and Inuit firms/ Inuit Owned Companies (IOCs)… The North Warning System Inuit Benefits Program aims to meet these objectives through, training, skills development, and mentorship for Inuit Beneficiaries across all levels of employment across the North Warning System (NWS), as well for the inclusion of sub-contracting opportunities of Inuit firms/Inuit owned Companies for increased participation in business opportunities for NWS good and service requirements. (Annex D)

Indigenous businesses have become more sophisticated in military procurement and will continue to build their capacity to provide a range of services. Nasittuq Corporation is prominent among them: It currently holds a $122-million contract to provide support services for CFS Alert, a military station on the northeastern tip of Ellesmere Island;  and a $592-million contract to operate and maintain the North Warning System. Nasittuq is a 51-49 percent partnership between Nunasi (a 100 percent Inuit-owned corporation) and ATCO Frontec.

Begin as you mean to go on

Defending Canada’s Arctic Sovereignty requires a commitment to working with provincial, territorial and Indigenous partners, and today’s announcement demonstrates just that. Investments in northern infrastructure, defence capabilities, and enhanced threat monitoring will benefit all Northerners including Indigenous partners. Inuit communities and their knowledge of the land, waters, and environment play a central role in affirming and defending Canada’s North and Arctic, and we will work collaboratively with Inuit through the Arctic and Northern Policy Framework, the Inuit Crown Partnership Committee, and the Inuit Nunangat Policy.

– Hon. Daniel Vandal, Minister of Northern Affairs, June 20, 2022

The DPU confirms that the Arctic and NORAD modernization is of primary importance to Canadian defence goals, as well as to fulfilling our commitments to our allies. Done right, it could be a true win-win partnership between DND and Inuit businesses, as per the goals set out by Ministers and other Parliamentarians, which will result in dual-use enhancements and upgrades to the Arctic’s base grid infrastructure that will reduce (but not eliminate) the existing infrastructure deficit.

Tapping into unique Inuit business expertise can reduce the NORAD Modernization program’s cost and risk, as well as contribute to the northern economy and thereby the security of northerners and the sovereignty of Canada’s Arctic. The legacy of NORAD modernization could, and should, be that of a nation-building project: one that better secures us from external threats while growing the well-СÀ¶ÊÓƵ and security of our Arctic communities.

It is in the spirit of that partnership that the IDCA, in collaboration with MLI, are hosting this important event, the objectives of which are to begin the process of communicating the real value added of Inuit business and community participation in NORAD modernization, and to establish the mechanisms needed to support it.

This should not slow or hamper NORAD modernization. It should improve it, by allowing the Canadian military to do things better and faster with good partners on the ground.

About the authors

Heather Exner-Pirot

Heather Exner-Pirot is a Senior Fellow and Director of the Natural Resources, Energy and Environment program at the Macdonald-Laurier Institute and a Special Adviser to the Business Council of Canada. She is a Global Fellow at the Wilson Center in Washington, DC, the Research Advisor for the Indigenous Resource Network, and the Managing Editor of the Arctic Yearbook. Exner-Pirot is also a Coordinator at the North American and Arctic Defense and Security Network and sits on the Boards of the Saskatchewan Indigenous Economic Development Network and Canadian Rural Revitalization Foundation. Dr. Exner-Pirot obtained a Ph.D. in Political Science from the University of Calgary in 2011.

Lee Carson

Lee Carson is a senior consultant with a unique specialty: federally sponsored nation building projects in Canada’s North. For the last 14 years he has offered those services as the president of his own consultancy company, NORSTRAT Consulting Inc. Lee’s passion for the Canadian Arctic, and polar regions in general, is lifelong, but prior to consulting he spent more than 30 years working in Canada’s aerospace and defence sector as a systems engineer, a project manager, a VP of business development, and a defence business lead.