Canada’s North is on the cusp of a delicate economic boom

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When a Danish bulk carrier sailed through the Northwest Passage in September filled with B.C. coal, it was described as historic. The voyage, the first time a fully loaded cargo ship had successfully navigated the Northwest Passage, was perceived as the unofficial beginning of a dramatic increase in commercial transit in our Arctic waters.

Canada is rightly using its Arctic Council chairmanship to raise the international profile of environmental concerns in northern waters for cruise ships and commercial shipping. This desire for international co-operation around stringent regulation makes sense, considering the risks associated with shipping in the north.

Canada's northern marine waters have yet to be the site of a serious incident or significant crisis.

The risks, though, are not confined to foreign ships or to Canada's Arctic sovereignty. Northern communities will also bear the risks – and opportunities – associated with marine traffic in Canada's North. An increasing number of domestic vessels will be plying Arctic waters – to supply growing northern communities, to support new resource projects, to expand fishing activities and to cater to increasing numbers of tourists.

The Conference Board of Canada's Territorial Outlook suggests that after tepid 0.5-per-cent growth in 2013, the country's three northern territories will grow significantly faster than most other regions of Canada over the next few years. Real gross domestic product in the territories is expected to rise by 3.2 per cent in 2014, 4.2 per cent in 2015 and 3.5 per cent in 2016.

Mining will be the most important economic driver, with new mines slated to open before the end of the decade in all three territories. Mining will also bring new shipping traffic to the north. Despite being scaled down, Baffinland Iron Mines Corp.'s Mary River project would, on its own, add significantly to Arctic shipments during both construction and production phases of development. The Conference Board estimates that mining output in Nunavut will grow 7.3 per cent in 2015 and 5.2 per cent in 2016.

Safely making the most of the economic potential of Arctic waters will require much more than just bolstering the regulatory regimes being discussed internationally. A new Conference Board report, Changing Tides: Economic Development in Canada's Northern Marine Waters, calls on governments and businesses to pool their resources wherever possible.

For instance, critical gaps in data can be filled through sharing knowledge and expertise – on marine environments, the local and regional effects of climate change, accuracy of navigation charts, spill and emergency response capacity, and potential impacts on local communities and northern lifestyles. There is a particular weakness in local data, yet economic development is heavily affected by local conditions. Working with northern communities to acquire and document traditional ecological knowledge must be emphasized.

Pooling resources between the public and private sectors could also seek to achieve multiple objectives when investing in new infrastructure. A new port facility for a mining project, for instance, also could support search-and-rescue capability and local activities such as fishing.

Reducing the risks of developing our Arctic waters will require a new culture of safety that goes beyond rules and regulations. This includes innovative approaches and partnerships to improve emergency response and search-and-rescue capacity. The Arctic Council SAR agreement, which went into force last January, is a step in the right direction.

Commercial transit of the Northwest Passage is just the most visible sign of a changing tide now beginning to sweep across our Arctic waters. There are risks, to be sure. But if these risks are handled well, northerners will gain jobs and greater control over their future, and all Canadians will share in the economic benefits.

Anja Jeffrey is director of the Centre for the North at the Conference Board of Canada.