Insights

Sustainability is no longer a niche concern—it’s an economic imperative. However, in the North, where communities are heavily reliant on diesel for electricity and heating, achieving sustainability requires more than just policy shifts; it demands a complete rethinking of energy infrastructure. Governments that integrate green policies into their economic strategy are not just protecting the environment—they are strengthening energy security, reducing reliance on expensive imports, and creating new opportunities for economic growth.

The challenge is significant: Northern communities depend primarily on diesel generators, which are costly to operate and contribute to high greenhouse gas (GHG) emissions. Transporting fuel to remote locations adds further economic strain, making power generation one of the most pressing concerns in the region. Yet, Canada’s territories are already forging a path toward sustainability, each with a distinct energy strategy that aims to shift away from fossil fuels and embrace renewables.

Yukon has the most comprehensive energy grid among the territories, boasting the highest percentage of renewable electricity generation. A key aspect of its energy strategy is replacing diesel with renewable energy in remote communities while diversifying the electricity supply. In recent years, the territory has made impressive strides in solar energy adoption, leading Western Canada in solar panel units per capita. This success is partly due to the 2013 Micro-Generation Policy, which enables residents and businesses to offset their electricity consumption with renewable sources. Yukon is also actively exploring wind energy potential and geothermal resources near Whitehorse, expanding its clean energy portfolio (Government of Yukon, 2013).

In the Northwest Territories, the government has set ambitious targets under its 2030 Energy Strategy, aiming to reduce GHG emissions from diesel-powered communities by 25% compared to 2018 levels. Additionally, the plan seeks to increase the share of renewable energy for space heating to 40%, while improving building efficiency to further cut emissions (Government of Northwest Territories, 2018). Many communities have already embraced solar power, with over 900 kilowatts of installed capacity offsetting significant diesel consumption. In Colville Lake, an outdated diesel plant was replaced with a hybrid solar-diesel-battery system, slashing diesel usage by over 37,000 liters in its first year alone (Northwest Territories Power Corporation, 2015). The long-term vision includes integrating the Snare and Taltson hydroelectric grids and potentially linking the territory to Alberta or Saskatchewan, a move that could make NWT the first territory connected to the North American power grid.

Nunavut, meanwhile, remains almost entirely reliant on diesel for its power supply, but efforts to explore renewable alternatives are underway. The Ikummatiit Energy Strategy, established in 2007, set out a vision to reduce fossil fuel dependence while supporting alternative energy sources. However, this strategy has not been formally updated, and recent discussions suggest a need for a more current and comprehensive energy framework. While Nunavut has yet to release an updated energy strategy, efforts such as the Nunavut Energy Management Program are taking shape to improve energy efficiency in government-owned buildings (Government of Nunavut, 2023). In parallel, the Iqaluit Nukkiksautiit Project, announced in 2025, is exploring the feasibility of a hydroelectric facility to reduce diesel reliance in Nunavut’s capital (Government of Canada, 2025).

Solar energy is also gaining traction in the southern regions of Nunavut, where daylight hours are long in the summer months. Arctic College in Iqaluit has operated a solar array since 1995, and in 2016, the Government of Nunavut introduced a net metering program allowing residents to receive credits for excess renewable energy fed into the grid (Qulliq Energy Corporation, 2016). However, the vast distances between communities and the lack of electrical interconnections make scaling up renewables a major challenge. According to a 2023 report by the Canadian Energy Regulator, small modular nuclear reactors (SMRs) could present a viable long-term solution, offering emissions-free electricity for decades without refueling (CER, 2023).

For these transitions to be successful, governments must take a proactive role in shaping policies that support the shift toward renewables. Investments in renewable energy microgrids can provide localized solutions that reduce dependency on diesel while lowering long-term energy costs. Incentives and subsidies for clean energy adoption, such as those encouraging biomass heating and energy-efficient housing, can help residents and businesses make the switch without facing prohibitive costs. Developing local expertise in clean energy technologies will also be necessary, ensuring that Northern communities can benefit from new job opportunities while reducing reliance on external contractors.

Collaboration between governments and Indigenous organizations will be essential in this transition, as many Indigenous-led initiatives are already exploring alternative energy solutions tailored to local needs. Policies must not only support these efforts but also ensure they are culturally responsive and aligned with the values and priorities of the communities they serve. Additionally, setting measurable environmental targets and establishing mechanisms to track progress will help drive accountability and ensure that sustainability remains a long-term commitment rather than a short-term goal.

The shift to a greener economy in the North is not just about environmental stewardship—it is about energy security, economic resilience, and creating a future in which Northern communities are not left behind in Canada’s broader energy transition. While the path forward will require overcoming logistical and financial hurdles, it also presents a unique opportunity to innovate and lead. If the right policies are implemented today, the North could become a model for how remote regions around the world achieve energy independence and sustainability in the face of climate change.