Canadian Manufacturing

Canada, U.S. lagging behind Russia in harnessing Arctic growth

Russia pulls 37 per cent of GDP from Arctic while Canada earns less than 10 per cent, expert said

July 24, 2014  by Dirk Meissner, The Canadian Press

WHISTLER, B.C.—The Arctic may be a hot commodity, with remarkable resource and tourism opportunities, but a conference has heard that Canada and the United States are barely out of the ice age when it comes to harnessing its growth.

Business and political leaders from both countries heard that while Russia is building more than a dozen icebreakers to transport liquefied natural gas (LNG) to Asia, jurisdictions in Alaska, the Yukon and Northwest Territories are still trying to organize business meetings.

“Despite the very good practical relations between Canada and Alaska and the territories, we still have two kinds of solitudes in respect of each one reporting to their federal governments far away,” said Canadian Arctic expert John Higginbotham.

“What we need is high-level political and high-level business attention to the Arctic development in that region if we are ever going to keep up with the very rapid developments that Russia and Norway and Sweden and other countries are investing in.”


The Russians are developing a northern sea route through which atomic-powered icebreakers will move oil, gas and LNG to Asian customers, said Higginbotham, who heads the Arctic program at the think-tank known as the Centre for International Governance Innovation (CIGI).

“There’s great interest. (The Russians) realize what the melting Arctic is going to mean over the next 20, 30, 40 years for commerce—for economic development,” he said. “(For us) the penny has yet to fully drop, but the consciousness is increasing.”

Delegates attending the annual Pacific Northwest Economic Region Summit in Whistler, B.C., heard that Arctic development in Alaska and Canada’s northern territories is ripe with potential, but cross-border co-operation is required.

Higginbotham said he’s encouraged that an organization like PNWER, which represents 10 states, provinces and territories, has focused on strengthening northern ties.

“There’s going to have to be a breakthrough in terms of co-operation and investment,” he said. “The responsibility falls on both the federal governments, the regional governments and particularly on business communities. It’s up to North America to get its act together in the Arctic.”

University of Victoria public administration Prof. Emmanuel Brunet-Jailly said Russia pulls 37 per cent of its gross domestic product (GDP) from the Arctic while Canada earns less than 10 per cent.

He said the Russian economy has tapped into the Arctic in a massive way, while North America is barely touching its potential.

“That’s why the discussion on the Arctic here at PNWER shows that even the business community in the northern part of North America is still at the level where they are organizing themselves,” said Brunet-Jailly. “The Russians have done this a quarter century ago. They are ahead of the deal.”

But Alaska State Rep. Bob Herron said recent increased U.S. State Department attention and Canada’s consistent focus on Arctic development has him confident the region is on track to realize its potential.

“Arctic awareness is going to have to be treated just like a campaign,” he said. “Just like a company trying to sell a product. Arctic awareness is important not only to the United States, not only to Canada, but to the world. It’s just that that education process has begun but sometimes that education takes a long time.”

Print this page

Related Stories