By Pauline Springer, October 7, 2025
Canada is showing an increasing interest in investing in dual-use projects. Dual-use Arctic ports are much more complicated than they seem to our political leaders, with the joint defence and commercial purposes potentially undermining each other in significant ways.
However, a failure to invest in Arctic infrastructure will leave Canada open to either direct military threats (if we commercialize without defending) or duplicitous foreign investment (if we attempt to defend without monitoring foreign investment or seizing investment opportunities in commercial infrastructure domestically).
What we need is not a blanket assumption that dual-use is always the best option. Instead, we need strategic investment in projects that satisfy our defence needs while shutting out the development of foreign-funded commercial ports that would offer adversaries such as China a cover for military applications in our Arctic. In other words, dual-use is complex – but if we do not build strategic dual-use ports for our industry and military, potentially malicious foreign actors will have the opportunity to build covert dual-use ports to conduct hybrid warfare in our Arctic.
This article builds on previous analysis for foreign investment in the Arctic by providing greater granularity and focusing on ports as a concrete example of how the risks of opaque investment materialise in practice and can be mitigated through targeted dual-use projects. This article argues for clearer priorities in select, thoroughly evaluated, dual-use projects rather than the en vogue surge of the latter.
The Problem of Underregulated Foreign Investment
The federal as well as provincial governments are failing to effectively regulate foreign investment in the Canadian Arctic, creating vulnerabilities in strategically sensitive infrastructure. This is especially concerning when looking at projects such as ports, since gaps in oversight may invite foreign threats to infiltrate the country under commercial cover.
Canada’s low corporate transparency makes it easy for foreign investors to conceal ownership, while high thresholds of investment limits under the Investment Canada Act mean many deals escape review due to the lack of need for reporting (as explored previously in the Macdonald-Laurier Institute article, “Is dirty Chinese money undermining Canada’s Arctic?”). This under-regulation creates a grey zone where infrastructure risks serving foreign leverage rather than Canadian sovereignty. Potentially – if done right – the expansion of dual-use infrastructures such as ports can mitigate this risk that foreign opaque investments bear. However, the current execution of these kinds of projects is not yet achieving this goal.
China’s Arctic Ambitions and the Risks for Canada
China’s interest in Arctic infrastructure is not simply economic. Through its Polar Silk Road strategy, Beijing has sought to integrate northern shipping lanes into its Belt and Road Initiative, often presenting investments as commercial or scientific. Yet, the dual-use potential of ports means that Chinese involvement could easily extend beyond trade into military applications, creating threats to Canada’s national security.
China has heavily invested in ports around the world, from Piraeus in Greece to Gwadar in Pakistan, frequently under the banner of commercial development but with latent strategic utility. In the Arctic, Beijing highlights scientific co-operation, deploying icebreakers and research vessels. However, such assets can also conduct military-relevant research or covertly map seabeds for submarine operations. Were China to gain influence in Canadian ports, its vessels, whether research ships or submarines, could make use of Canadian facilities, blurring the line between civilian and (foreign) military activity. In a country where ownership transparency is already weak, such investments could go unnoticed until strategic vulnerabilities are well entrenched. Therefore, it is of essence to protect relevant Canadian infrastructure by ensuring state ownership or ownership by trusted national investors.
The Dual-Use Potential of Ports
The Canadian government has long insisted that Arctic infrastructure projects, particularly ports, must be designed with a “dual-use” purpose, serving both civilian and military needs. This approach has become almost doctrinal, shaping how Ottawa frames development in the North. Does this dual-use model make sense to the extent that policymakers claim – or does it risk undermining both economic and security objectives simultaneously?
“Dual-use” is not a legally defined or regulated concept in Canada. In practice, governments often invoke it as a political slogan rather than a technical designation. This allows them to justify infrastructure investment as both developmental and defence measures. This ambiguity can be expedient. For example, in an environment where Canada is under constant pressure from its allies – particularly the United States and NATO, which recently set a 5 per cent of GDP defence spending target by 2035 – branding ports as dual-use allows Ottawa to present investments in northern development as contributions to national defence. However, Arctic expert Heather Exner-Pirot, MLI’s director of Energy, Natural Resources, and Environment, has argued that the economic case for Arctic ports is often overstated – casting doubt on the narrative that such projects will automatically deliver prosperity to Northern communities.
This dual-use concept is therefore not only poorly defined but also politically malleable. The real question is: can a port realistically serve both commercial and defence needs at the same time?
Commercial ports prioritize openness and efficiency: rapid cargo throughput, shallow-draft accessibility for resupply vessels, and minimal restrictions on entry, all in the pursuit of cost efficiency and competitiveness. Conversely, a highly securitized port may deter shippers, insurers, or investors seeking reliable, low-cost throughput. NATO’s own port security guidelines underline this divergence. Defence ports, by contrast, require reinforced docks for large naval ships, perimeter security and access controls, specialized facilities for ammunition and fuel storage, and the ability to host or repair military assets. The expectation of meeting both sets of standards simultaneously often makes the development of a truly functional dual-use port prohibitively costly. In this sense, Canada’s dual-use rhetoric risks producing infrastructure that fails both logics: too open for military deterrence, too militarized for commercial success, or – when designed to satisfy both – too costly to materialize.
Rather than treating dual-use as an unquestioned good, Canadian policymakers need to critically evaluate whether it is a sound basis for Arctic development, or whether it masks contradictions that could undermine both sovereignty and prosperity. Is dual-use, and particularly the subsidized development of commercial ports, the best solution? Or should policymakers make military utility the clear priority? This debate becomes even more pressing when considering the role of investors and the risks posed by underregulated foreign involvement.
Civilian and Defence Purposes of Arctic Ports
While the Canadian government presents dual-use as a coherent strategy, the reality of Arctic ports shows how sharply the civilian and defence functions can diverge. When ports are developed exclusively for military purposes, and commercial investments are neglected, Canada risks perpetuating gaps that foreign investors can exploit by stepping in to develop commercial ports in the High North.
From a civilian perspective, Arctic ports are tied directly to the growth of shipping routes. In the Canadian Arctic, vessel traffic nearly tripled between 1990 and 2015, reflecting the gradual opening of sea lanes as ice recedes. Globally, some 350 Arctic ports are listed in the World Port Index, with almost 200 ice-free year-round. Murmansk remains the only large Arctic port, while ten medium-sized ports operate across the region. Canada, however, lags far behind. Only one new year-round Arctic port is currently being developed at Churchill, Manitoba, under a 2025 agreement. The economic importance of ports was already recognized in Canadian parliamentary research as far back as 1993, yet tangible progress has been slow. Meanwhile, competition to establish competitive Arctic shipping routes has intensified, with China making significant investments to secure future access and global competitiveness.
The multiplied risk of opaque foreign investment and underdeveloped dual-use ports
As the Arctic becomes increasingly accessible year-round, new port locations will open, creating significant investment opportunities for China. If decisionmakers in Ottawa fund only military ports and neglect commercial development, foreign actors such as China would be effectively invited to finance civilian ports and integrate them into initiatives like the Polar Silk Road. The decision by the Canadian government to only support the development of commercial ports and neglect military ports would be just as fatal since the High North already suffers from weak defence capabilities to deter actors such as Russia and China. This leaves the third option of opting for dual-use ports: to satisfy the increasing market demand for commercial ports, prevent foreign actors from gaining ownership over this critical infrastructure, and build much-needed defence capabilities.
Ports framed as dual-use may not be economically viable in the Canadian Arctic, where traffic remains limited for the time being. Nonetheless, they are attractive for defence and deterrence, enabling Canada and its allies to maintain presence and readiness in the North. NATO emphasized in 2023 that the Arctic has become a key theatre of strategic competition, making infrastructure in the region essential for deterrence and logistical support.
Russia, in parallel, has invested heavily in Arctic military infrastructure, modernizing its bases and reinforcing its naval footprint. For Canada, the limited number of functioning ports not only hampers economic potential but also constrains its ability to project military presence in the region. For this reason, it may make sense to acknowledge the economic potential of dual-use ports in select locations, such as Churchill, which is ice-free year-round and rail-connected. These dual-use ports are not only a checkmate move to prevent opaque, unwanted foreign investments, such as that outlined to potentially come from China, but they also deter foreign military use due to the increased monitoring as opposed to those of purely commercial facilities.
Port of Churchill
The Port of Churchill is a first step to exemplify at least in part how dual-use infrastructure can work effectively, as well as sustainably. It offers year-round access, is directly connected to the national rail network, and is uniquely owned and operated by Indigenous communities.
Situated on Hudson Bay, the Port of Churchill is Canada’s only deepwater Arctic seaport with a North American rail link via the Hudson Bay Railway. Its ownership by Arctic Gateway Group – a consortium of First Nations and remote Manitoba communities – ensures that the port serves both economic and strategic goals while being rooted in local governance.
However, Churchill also illustrates the high costs and delays associated with Arctic infrastructure. Maintaining the Hudson Bay Railway has proven particularly difficult, with frequent repairs, washouts, and high operating expenses making the project both time-consuming and financially demanding. These challenges highlight the broader dilemma of dual-use development in the Canadian Arctic: even when successful, such projects require sustained political will, significant public funding, and long-term commitment to remain viable.
From a national security perspective, making the much-needed dual-use concept realistic on a larger scale requires policymakers to make a conscious effort to maximize the economic benefits of such infrastructure. This requirement is unusual for public infrastructure and more akin to practices used for privatized facilities. Therefore, a shift in focus towards economic sustainability – while still maintaining the security standards of a dual-use facility – would enable a more practical and widespread implementation in the future. Moreover, the exponentially growing risk created by melting ice and the resulting new trade routes (opportunity), combined with China’s demonstrated interest (intent), means that the threat – defined as opportunity plus intent – can no longer be dismissed as merely hypothetical.
Conclusion
Policymakers must evaluate not only the short-term costs of developing such projects but also the long-term benefits of enhancing safety in the High North and strengthening Canada’s capacity to defend its sovereignty – both against covert foreign investment and direct military threats – while also ensuring a maximization of the economic profitability; it is a fine line for policymakers to walk on when deciding which infrastructure projects should be invested in for dual-use development.
This requires decisive policy action: Firstly, stricter investment screening and mandatory ownership transparency (as already previously called for in “Is dirty Chinese money undermining Canada’s Arctic?”) in order to assess which locations are of imminent interest to foreign investors and to eliminate investment from unknown actors.
Secondly, closer coordination with Indigenous governments to ensure that commercial ports are not undermined by covert foreign leverage, as well as ensuring that civilian infrastructure with foreign investors does not covertly transform into dual-use facilities serving another country’s military interests on Canadian soil. Policies are also needed to ensure the economic cost-effectiveness of this type of infrastructure to allow sustainable large-scale realization of the concept of dual-use.
Thirdly, a re-evaluation of the understanding of “dual-use.” The term must be legally defined and clear criteria and purpose for this type of project must be set. The infrastructure should not merely accommodate civilian and military use in one way or another but serve both purposes to equal satisfaction.
Lastly, seizing infrastructure investment opportunities, particularly in the locations of interest for foreign adversaries identified in the first two points, domestically to pre-empt opaque foreign investment openings altogether. This can be very well done through dual-use infrastructure due to the above elaborated economic and security benefits. However, to re-iterate once again, this solution must not be applied for every and all infrastructure projects.
Without stronger regulation and clear priorities, Canada’s Arctic ports risk becoming strategic liabilities. With them, when selected carefully, they can instead become the backbone of both economic prosperity in the North and the defence of Canadian sovereignty. Dual-use ports offer more than just defence capabilities or economic investments: by securing domestic investments in dual-use infrastructure, we can reduce reliance on opaque foreign funding. This strategy not only boosts local economies but also strengthens safety measures, making it harder for malicious actors to exploit these vital assets. However, as tempting as this solution sounds, this is not a fashionable one-size-fits-all solution, but subject to in-depth analysis and strategic planning.
Pauline Springer is a graduate researcher in International Relations specializing in Arctic security and Chinese influence. This article builds on an earlier article for Inside Policy, titled “Is Dirty Chinese Money Undermining Canada’s Arctic?” It examined the risks of foreign, particularly Chinese, investment in the North.
