Ottawa is reviewing the Arctic offshore drilling ban, but no lifting decision, licence or project approval has been made
Budget funds oil and gas governance as northern leaders press for a say in development
OTTAWA – NETNEWSLEDGER National News – The federal government is reviewing Canada’s decade-old moratorium on offshore oil and gas activity in Arctic waters, but Prime Minister Mark Carney says no decision has been made to lift it.
The review drew national attention after Budget 2026 set aside $11 million over four years for Arctic offshore oil and gas governance and oversight. Carney said Tuesday that the money is meant to build the capacity of Inuit and territorial partners who share responsibility for northern resources.
The distinction is important. Funding a regulatory and co-management system does not authorize drilling, issue a licence or end the prohibition now in force.
Moratorium dates to 2016
Canada designated its Arctic waters indefinitely off limits to future offshore oil and gas licensing in 2016. A federal order also prevents work under existing licences while the moratorium is in place.
The policy calls for review using climate and marine science, Indigenous knowledge and an assessment of the social and economic effects of development or continued prohibition.
Northwest Territories Premier R.J. Simpson has argued the ban blocks economic opportunities and has pressed Ottawa to lift it. Northern governments have also criticized the way the original moratorium was imposed, saying people who live in the region need a direct role in decisions.
Environmental concerns are substantial. Offshore operations in remote, ice-affected waters would pose difficult spill-response, wildlife and infrastructure challenges. Any move toward exploration would still face federal regulation and environmental review.
Inuvialuit are an equal management partner
The 2023 Western Arctic-Tariuq Offshore Accord created a four-party framework involving Canada, the Inuvialuit Regional Corporation, the Northwest Territories and Yukon. It gives the Inuvialuit a full role in offshore petroleum decisions and sets out revenue sharing if development occurs.
The accord says separate Crown consultation duties still apply. It also requires implementing federal legislation before the full management system takes effect.
Inuvialuit Regional Corporation chair Duane Ningaqsiq Smith said when the accord was signed that Inuvialuit had long been excluded from offshore management and should share in any benefits. The accord does not presume development will happen.
Carney’s statement leaves the central policy question open: whether Canada will maintain the ban, change it or replace it with a different system after review. Ottawa has not announced a decision date, a licensing round or an approved project.
Before publication of any later update, editors should confirm the legal status of the prohibition order, the review timetable, the position of each accord party and whether affected Indigenous governments have been consulted.
