Heather Exner-Perot is Senior Fellow and Director of Natural Resources, Energy, and Environment at the Macdonald-Laurier Institute and a Global Advisor for the Wilson Center in Washington, D.C. She is also a Research Advisor to the Indigenous Resource Network.
00:03:32.640Have you been, how far north have you been?
00:03:34.980I'm guessing a lot further north than Waskasu.
00:03:37.480I have been to all eight Arctic countries.
00:03:39.980So the five Nordics, Alaska, I've been to Siberia, I've been to Yakutsk, and then I've been to all three territories, and I've been to Greenland.
00:03:49.380So, yes, I've done all of the, but I'm not, you know, I'm a social scientist, so I usually go to the capitals.
00:03:57.160I don't go on the land and study tundra or anything, but I've been to a few of the national parks further north.
00:04:02.420There was recently a report from the Senate, and most Canadians, when they think of our government, don't think of the Senate.
00:04:10.920But they do good work, and they've issued a report called Northern Lights, a wake-up call for the future of Canada, by the Special Senate Committee on the Arctic.
00:04:20.940They do say that we've got to worry about sovereignty in the Arctic, especially with the Northwest Passage opening up,
00:04:29.000other countries being interested in the resources that are there, having very different views of how those resources should be extracted, if at all.
00:04:40.840How do these changes that are happening in the north play into our Arctic sovereignty strategy, if we even have one?
00:04:49.560Yeah, so, you know, in Canada, we often think of the Arctic through this sovereignty lens.
00:04:54.540And it's probably not the most policy-pertinent lens, but it's kind of been infused in our national consciousness.
00:05:02.080So there is the issue of the Northwest Passage, is it internal waters or an international strait?
00:05:07.320And notably, we disagree with the Americans on this, but we've pretty much agreed to disagree.
00:05:12.800And even since 1988, we had an agreement that we implemented with them.
00:05:17.340And so it's a well-managed dispute, you know, essentially that the reason the Americans don't want to recognize the Northwest Passage as Canadian internal waters
00:05:27.260is because they're afraid that would set a precedent for other international straits, like the Strait of Malacca or Strait of Hormuz.
00:05:33.780So it's not so much about the Northwest Passage, it's about freedom of navigation in general.
00:05:38.100And so, you know, so in general, they say, okay, you know, we won't challenge you there.
00:05:44.260You don't push it too far either, just so we don't compromise other areas.
00:07:01.700And around that time, there were interviews given by senior government officials to Chinese English language media, obviously directed at sending a message to Canada.
00:07:13.680And they were making noises that, well, China has 20% of the world's population, therefore, they should have 20% of whatever is in the Arctic.
00:07:23.900And they have a very different view of how the Arctic should be treated.
00:07:28.580Is there more to our view of why sovereignty matters and why we want to ensure that we have some control over areas in the north?
00:07:40.800Is there more to it than just the United States and the Northwest Passage when you've got Russia looking to make the Arctic waters a year-round international shipping zone?
00:07:50.520When you've got countries like China or Russia wanting to go in and do resource extraction in ways that we wouldn't approve of?
00:07:58.580Right. So with regards to the Chinese, that was a provocative statement they made.
00:08:03.380And the context was very different around 2008, 2010.
00:08:07.160That was at the height of the last commodities super cycle, commodities boom.
00:08:11.560And everyone was looking for resources everywhere.
00:08:13.940And a lot of commodities had their record price levels at that time.
00:08:20.580And at that time, Arctic resources looked like they might be economic, that you could actually make money by developing them.
00:08:26.460And then the commodities down phase hit and we had a bust.
00:08:30.940And so Arctic development really hasn't occurred at any kind of pace in the last 10 years because commodity prices have been so low.
00:08:39.400The Chinese at that time made that provocative statement, said they're a near Arctic state and wanted to view the Arctic as the common heritage of mankind.
00:08:46.980So it's kind of this international zone.
00:08:50.180And I mean, obviously, the interest for them is that, you know, then they have equal access to it from everyone.
00:08:55.580That's not a Canadian interest or American interest or Russian interest is the interesting one or Nordic interest.
00:09:01.000But the international law is pretty settled around that, like I say, with the law of the sea, exclusive economic zones and the extended continental shelf.
00:09:09.600The one, you know, the one wild card is fishing in international waters.
00:09:15.660A lot of these things beyond 200 miles, it is, you know, the extended continental shelf is only the seabed.
00:09:21.640So if you want to do undersea mining, not the fishing, but actually about three years ago, there was an Arctic fishery agreement, a moratorium on fishing in the Arctic, in the central Arctic Ocean.
00:09:33.920There's no fisheries now anyways, because it's so cold.
00:09:39.900So it was an easy agreement to come to because no one was fishing there anyways.
00:09:43.240But China, Korea, the European Union, Iceland, Canada, United States all agreed that we would not fish there until we understood the fisheries better.
00:09:52.220So in that respect, China was playing ball on the one area that, you know, they might have be able to independently go in the Arctic is on fishing.
00:10:01.720So if a sovereignty lens isn't the right way of looking at it, what is the right way of looking at the north?
00:10:09.420It's a sparse population and one that is not overly prosperous, one where living there is incredibly expensive.
00:10:19.840I mean, we've all seen the photos of what it costs to buy what we would consider basic foodstuffs in the North Mart.
00:10:29.700But all of that needs to be shipped up.
00:10:31.680But do we need to look at it from a perspective of making sure that there's a decent quality of life for the people that live there, of empowering them, of going to an economic model that works for people in the north?
00:18:45.760And the fact that Jolie is saying we want to increase our influence shows at least that they're acknowledging that we haven't been influential,
00:18:52.640that we are, that we are laggards and we're having, you know, all of our allies saying in back channels and in leaks that we aren't stepping up in NATO
00:19:00.040and how surprising it is, you know, with all of our, you know, that we aren't stepping up on the energy side, on the resource side,
00:19:40.020And it's the agenda of Biden when he came to Ottawa in March.
00:19:43.240What were the things the Americans wanted to talk about?
00:19:45.300Again, NATO, our 2%, NORAD modernization, energy and resources, getting critical minerals and energy out to our allies.
00:19:53.020So it's not a mystery what they're looking for us.
00:19:55.960And now, you know, can we start to do something about it?
00:19:58.380And the Arctic holds a key to a few of those things.
00:20:00.920It holds a key to continental defense through Nordic modernization.
00:20:04.080It holds a bit of a key through NATO because it's the northern flank with Russia.
00:20:08.500Yeah, I mean, Sweden and Finland joined NATO, where a lot of the activity is happening, where some of the new, you know, vulnerabilities are being exposed.
00:20:17.960It's one of the last great geographical regions where there's untapped critical minerals that we could start tapping.
00:20:24.660And we need it not only to get off Chinese and Russian dependence, but to have this energy transition.
00:20:28.840So here is an area that purpose-built for Canada to lead in.
00:20:33.600But again, it's like we're just discovering that this region exists now in 2023.
00:20:39.060Well, I've been listening to politicians talk about the rain of fire for longer than I'd like to admit.
00:20:45.540It's been at least 20 years, if not more.
00:20:48.380And the Ontario government, mostly I've heard about it from various incarnations of the Ontario government going back to when Ernie Eaves was premier, Dalton McGinty, Kathleen Wynne.
00:21:00.100And now we've got the Ford government, and they appear to be making some headway.
00:21:06.720They've got the two closest indigenous groups leading an environmental assessment to look at, can they go in there?
00:21:16.420Can they begin to extract the minerals that are there, the critical minerals?
00:21:20.940And while everyone says this is incredibly important, you've also got the federal government questioning it from an environmental standpoint.
00:21:32.900And so there seem to be mixed signals about what we can and should do.
00:21:38.500I doubt that is something that is very helpful in extracting these critical minerals that you're talking about.
00:21:46.180So I think Canadians should know that we actually extract fewer critical minerals in 2023 than we did in 2019, and in many cases, less than we did in 2005.
00:21:55.800So we are very much going the wrong way if you think critical minerals are important to our economy, to the energy transition, to our security.
00:22:04.700And so again, like you say, since 2015, until the Ukraine war, there was very much a sense, and Bill C-69, the Impact Assessment Agency, kind of institutionalized this, that we want to move away from resource extraction.
00:22:20.060The Prime Minister said, you know, at WEF once in Switzerland, we want to be known for our resourcefulness, not for our resources, and that, you know, our young people should go and do university and white-collar jobs, and that the future is not going to resource extraction.
00:22:35.820And now here we are, you know, climbing back from that, saying, wow, actually, we do need these critical minerals.
00:22:54.140You know, provincial governments like in Ontario are trying to push this forward faster.
00:22:58.680We're building battery plants that rely on these supplies.
00:23:02.360So rhetorically, there has been a change of tone.
00:23:04.820But in practice, all of the difficulties on the regulatory side, on the permitting side, on the financing side, on the international and competitive side, none of that has changed.
00:23:14.900And so now they've committed in Budget 2023 that they're working on it.
00:23:20.260They expect to have some reforms by the end of the year.
00:23:22.820But there isn't really confidence in industry, I would say, from all of my many conversations, that they know how to unwind what they've just spent eight years implementing.
00:23:35.400We're going to take a quick break right now.
00:23:37.340But when we come back, I want to ask you about the differing views.
00:23:41.920You've written about the Americans taking a renewed interest in the Arctic, the reasons that Canada should take a greater interest due to how things are going with Russia.
00:23:52.620But I want to get into a bit about the different viewpoints and how those countries are looking to either play in the Arctic, extract in the Arctic, exploit compared to what we're doing.
00:24:08.560Contrast that with what Justin Trudeau said at the WEF that you mentioned back in a moment.
00:24:14.300Heather, when I was looking at different articles preparing for the interview, I found one in India.
00:24:19.900I was just trying to find out how many clear sailing days do we have going through the Arctic Ocean.
00:24:26.620And, you know, when you see articles in Canada about being able to sail the Northwest Passage, it's often accompanied with, oh, this is bad.
00:26:01.980And they have the warm, a warm current that goes all the way to the Barents Ocean, all the way to where most of their natural gas is.
00:26:08.640So we have seen an incredible LNG boom in Arctic gas in the last probably seven, seven years.
00:26:15.460And one reason is because it is almost ice free all through the year from where they're, you know, from Yamal, from where they're, you know, big reserves of natural gas are in the Arctic Ocean, all the way to Europe.
00:26:28.400So almost all their natural gas, their LNG has been going to Europe.
00:26:50.500So the Russians have invested in these heavy icebreakers.
00:26:53.160They have, you know, far more nuclear icebreakers than, you know, anyone else almost combined to give themselves the opportunity to export their goods from the Arctic to Asian markets.