From the Frontier Centre for Public Policy

With U.S. trade risks rising, Manitoba has a fleeting shot to turn Churchill into a year-round Arctic shipping hub. Without bold investment, the North’s economic and strategic promise will slip away.

The window to turn Manitoba’s northern coast into a year-round shipping hub is closing fast

Rising trade tensions with the United States have given Manitoba a rare second chance to develop its northern ports. But if the province doesn’t act decisively, it will miss a historic opportunity to gain a permanent place in global trade—and reinforce Canadian sovereignty.

Manitoba exports billions in agricultural, mineral and manufactured goods to the U.S., so any disruption in that relationship has ripple effects across the province’s economy. Diversifying trade routes isn’t just smart policy: it’s an economic necessity.

Churchill, a small town on the western shore of Hudson Bay in northern Manitoba, is Canada’s only deepwater port connected to the Arctic. Churchill requires regular dredging in an ecologically sensitive area at the mouth of the Churchill River. While most attention has focused on Churchill, its potential will remain limited without serious investment to make it a year-round operation. Right now, it’s only usable during the summer months.

Premier Wab Kinew recently highlighted Churchill as a strategic asset for asserting Canada’s northern sovereignty. That may be true, but symbolic importance alone won’t sustain it. Economic value and operational reliability will. The port’s rail accessibility gives it an advantage if it can handle the volume and meet international trade demands year-round. However, the railway to Churchill is challenged because of unstable permafrost, affecting long-term reliability.

Feiyue Wang, a University of Manitoba professor and Canada Research Chair, sees Churchill as a potential game-changer. As climate predictions see a reduction in sea ice in the Canadian Arctic, shipping lanes that were once blocked for most of the year could become viable trade routes. That’s already happening.

The Arctic Gateway Group has shipped zinc concentrate through Churchill. Alberta Premier Danielle Smith and others have promoted sending oil through it. These aren’t just theoretical opportunities: they’re early evidence of what’s possible. But for Churchill to become a true supply chain hub, it needs infrastructure, investment and long-term political commitment.

Governments have already put money into the port and its rail link. But they must finish the job. That means building the capacity for four-season shipping, attracting private investment, and showing that the port will be viable over time. Manitoba should also press Ottawa to maintain a military presence in the region and use the port to reinforce northern sovereignty.

But if Manitoba is serious about developing northern trade infrastructure, it should also consider a second, ambitious alternative.

The Neestanan utility corridor, an Indigenous-led initiative, proposes a new infrastructure route—rail, roads and energy pipelines—across northern Alberta, Saskatchewan and Manitoba. The corridor would terminate at a year-round, multi-modal port on Hudson Bay, north of the Nelson River. Led by First Nations and Métis communities, Neestanan offers a broader vision for economic reconciliation and northern opportunity. Port Nelson is a deeper water port and its railway line is not in a permafrost zone, making it more feasible for year-round operations.

A century ago, Prime Minister Wilfrid Laurier’s government debated whether Churchill or Port Nelson should serve as the main northern terminal. Ottawa initially backed Port Nelson but later abandoned it due to silt accumulation. Churchill became the chosen site.

Today, both locations deserve a fresh look. With modern engineering, sediment shifts and Indigenous-led proposals, what wasn’t feasible in 1910 may now be not only possible, but necessary.

Churchill was originally built to ship Prairie grain to global markets. But its future lies in more than grain. With the right investment, it could handle a much wider range of goods and help secure Canada’s place in the evolving Arctic economy.

In short, the opportunity lies in developing both ports based on their practical and feasible characteristics, aiming to attract private investment.

This is Manitoba’s moment. But the window of opportunity won’t stay open forever. Other jurisdictions are moving faster. Manitoba must act swiftly—before the opportunity is lost.

This is a revised version of an earlier commentary published here

From the Canadian Energy Centre

By Will Gibson

Study finds legislation’s massive cost outweighs any environmental benefit

The negative economic impact of Canada’s proposed oil and gas emissions cap will be much larger than previously projected, warns a study by the Center for North American Prosperity and Security (CNAPS).

The report concluded that the cost of the emissions cap far exceeds any benefit from emissions reduction within Canada, and it could push global emissions higher instead of lower.

Based on findings this March by the Office of the Parliamentary Budget Officer (PBO), CNAPS pegs the cost of the cap to be up to $289,000 per tonne of reduced emissions.

That’s more than 3,600 times the cost of the $80-per-tonne federal carbon tax eliminated this spring.

The proposed cap has already chilled investment as Canada’s policymakers look to “nation-building” projects to strengthen the economy, said lead author Heather Exner-Pirot.

“Why would any proponent invest in Canada with this hanging over it? That’s why no other country is talking about an emissions cap on its energy sector,” said Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute.

Federal policy has also stifled discussion of these issues, she said. Two of the CNAPS study’s co-authors withdrew their names based on legal advice related to the government’s controversial “anti-greenwashing” legislation.

“Legitimate debate should not be stifled in Canada on this or any government policy,” said Exner-Pirot.

“Canadians deserve open public dialogue, especially on policies of this economic magnitude.”

Carbon leakage

To better understand the impact of the cap, CNAPS researchers expanded the PBO’s estimates to reflect impacts beyond Canada’s borders.

“The problem is something called carbon leakage. We know that while some regions have reduced their emissions, other jurisdictions have increased their emissions,” said Exner-Pirot.

“Western Europe, for example, has de-industrialized but emissions in China are [going up like] a hockey stick, so all it’s done is move factories and plants from Europe to China along with the emissions.”

Similarly, the Canadian oil and gas production cut by the cap will be replaced in global markets by other producers, she said. There is no reason to assume capping oil and gas emissions in Canada will affect global demand.

The federal budget office assumed the legislation would reduce emissions by 7.1 million tonnes. CNAPS researchers applied that exclusively to Canada’s oil sands.

Here’s the catch: on average, oil sands crude is only about 1 to 3 percent more carbon-intensive than the average crude oil used globally (with some facilities emitting less than the global average).

So, instead of the cap reducing world emissions by 7.1 million tonnes, the real cut would be only 1 to 3 percent of that total, or about 71,000 to 213,000 tonnes worldwide.

In that case, using the PBO’s estimate of a $20.5 billion cost for the cap in 2032, the price of carbon is equivalent to $96,000 to $289,000 per tonne.

Economic pain with no environmental gain

Exner-Pirot said doing the same math with Canada’s “conventional” or non-oil sands production makes the situation “absurd.”

That’s because Canadian conventional oil and natural gas have lower emissions intensity than global averages. So reducing that production would actually increase global emissions, resulting in an infinite price per tonne of carbon.

“This proposal creates economic pain with no environmental gain,” said Samantha Dagres, spokesperson for the Montreal Economic Institute.

“By capping emissions here, you are signalling to investors that Canada isn’t interested in investment. Production will move to jurisdictions with poorer environmental standards as well as bad records on human rights.”

There’s growing awareness about the importance of the energy sector to Canada’s prosperity, she said.

“The public has shown a real appetite for Canada to become an energy superpower. That’s why a June poll found 73 per cent of Canadians, including 59 per cent in Quebec, support pipelines.”

Industries need Canadian energy

Dennis Darby, CEO of Canadian Manufacturers & Exporters (CME), warns the cap threatens Canada’s broader economic interests due to its outsized impact beyond the energy sector.

“Our industries run on Canadian energy. Canada should not unnecessarily hamstring itself relative to our competitors in the rest of the world,” said Darby.

CME represents firms responsible for over 80 per cent of Canada’s manufacturing output and 90 per cent of its exports.

Rather than the cap legislation, the Ottawa-based organization wants the federal government to offer incentives for sectors to reduce their emissions.

“We strongly believe in the carrot approach and see the market pushing our members to get cleaner,” said Darby.