This story is part of The Energy Mix’s partnership with Small Change Fund.

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Port of Churchill Historical photo by Ansgar Walk, CC BY-SA 2.5.:wikipedia

Ottawa and Manitoba are eyeing an expanded Arctic trade route, including for potential fossil fuel exports to Europe, through the Port of Churchill as sea ice declines. But experts told The Energy Mix that less ice doesn’t necessarily eliminate the challenges of moving more cargo through Hudson Bay.

Anchored by the Indigenous-led Arctic Gateway Group (AGG), the expansion is among the projects likely to be included in a dealbook to attract foreign investors at Prime Minister Mark Carney’s inaugural Canada Investment Summit in September, The Globe and Mail reported last week.

The Port of Churchill occupies a unique place in Canada’s transportation network. Located on the western shore of Hudson Bay in northern Manitoba, it is the country’s only deepwater Arctic port connected directly to the North American freight network through the Hudson Bay Railway in Manitoba and Saskatchewan. AGG, a partnership of 41 First Nations and northern community shareholders, runs the port, which supports northern resupply and seasonal exports.

The port is already in its third year of shipping zinc mined at Snow Lake, Manitoba, to Europe, while a trial shipment of potash is also bound for Europe this year, AGG told The Mix in an email. The Hudson Bay Railway is separately carrying zinc and copper concentrate from Eldorado Gold’s McIlvenna Bay mine in northern Saskatchewan to eastern Canada.

Federal and provincial governments are positioning Churchill as a larger Arctic trade gateway, called Port of Churchill Plus. Ottawa and Manitoba are considering an upgraded rail line, an all-weather road, new energy corridor infrastructure, and expanded marine icebreaking capacity. The federal Major Projects Office says Churchill provides the shortest route from the Prairie provinces to European markets and that greater import and export capacity through Hudson Bay could diversify trade with Europe and other international partners. The feds launched a market sounding study in February to gauge private sector interest in the proposed corridor, but the findings have not been publicly released.

Last week Ottawa released preliminary findings from another study undertaken in collaboration with AGG, focused on infrastructure requirements for expanded marine activity in Hudson Bay and the Hudson Strait. As sea ice shrinks, year-round shipping is possible without the use of the most expensive icebreakers, Manitoba Premier Wab Kinew said in an interview with the Globe and Mail.

“This report is telling us, for a much more affordable class of ship, something in the area of $100 million new, or $50 million used, that we could open up that shipping lane for a huge chunk of the year, if not the entire year.” The next day, Kinew said an LNG terminal and related infrastructure, including an offshore port, could cost C$70 billion to C$80 billion, CBC News reported.

In July, experts told The Mix that declining sea ice does not necessarily translate into easier Arctic shipping. Meghan Mathieson, director of strategy and engagement at Clear Seas, said the port needs to be considered alongside the railway, shipping conditions, navigation systems, and emergency response infrastructure that would support it. She added that, while declining sea ice has lengthened navigation seasons in some areas, changing ice conditions can also increase operational uncertainty. Less overall ice may be accompanied by greater movement of multi-year ice, creating navigational hazards that require careful monitoring and forecasting.

“Big chunks of ice are breaking free and floating around,” Mathieson said at the time, before the icebreaker study was released. “They’re causing navigational hazards. So it’s actually more dangerous than it used to be… the ice that there is is more challenging.”

This can have practical consequences for vessels operating on fixed schedules. Mathieson said ice navigators can plan a route only to find it unexpectedly blocked. Responding to the new study, she said less ice overall means a lighter icebreaker can be used in more situations.

AGG says other constraints can be addressed. “The greatest challenge is not geography or technology but overcoming decades of neglect and the status quo belief that Churchill can only serve as a small or niche port,” Chris Avery, AGG’s president and CEO, told The Mix.

Upgrading the Hudson Bay Railway to modern industrial weight and capacity standards is a “critical first step,” alongside improvements to the port’s wharf, storage, loading and marine facilities, Avery added. He said the railway’s limitations stem primarily from historical underinvestment, and that monitoring tools including LiDAR, ground-penetrating radar, and drones can help support heavier freight operations.

Another study by the University of Manitoba examined past and projected sea ice conditions and found the navigable season has lengthened and is expected to continue lengthening. The preliminary results of yet another study, led by the Arctic Research Foundation, show that year-round marine access to the port is likely technically feasible, but it also identified potential environmental concerns. Final results of the study are expected in March 2027.

Increased marine traffic could come with environmental and community impacts. Mathieson said increased shipping and icebreaking introduce underwater noise into an environment that has historically been relatively quiet.

“Whales such as narwhals and belugas could change their patterns,” she said. “They’ll avoid the noise… they might leave where they’re used to feeding or rearing their young and go somewhere else where it’s quieter.”

She said those shifts can also affect northern communities that rely on marine mammals for harvesting, forcing hunters to travel farther as animals move away from shipping activity.

Emergency response presents another challenge, Mathieson added. Limited infrastructure and population across the Arctic can make responding to a grounding, spill, or other marine incident significantly more difficult than in southern waters.

Ottawa has not yet said whether future energy infrastructure or broader corridor investments will directly benefit communities along the route. Many remote northern communities remain dependent on diesel delivered over long distances, while improved roads, rail connections, and other supporting infrastructure could strengthen access to supplies and services.

Pierre Cuguen, spokesperson for the Privy Council Office, told The Mix that Port of Churchill Plus remains in the “research and analysis phase.” The Major Projects Office is working with federal departments, Manitoba, Indigenous partners. and AGG on the market sounding study— a commercial viability analysis assessing potential costs, benefits, and private sector demand.

Cuguen said a broader analysis also includes work on critical minerals and the feasibility of exporting LNG and crude oil through Churchill. There is currently no LNG export terminal at Churchill, and the federal government has not publicly identified what infrastructure would be required or whether sufficient market demand exists to justify one.