Ottawa consulting on future of Arctic offshore oil and gas drilling ban, Carney says

The federal government says it is building up the "capacity" for northern communities to consult on the future of Canada's moratorium on oil and gas drilling in the Arctic. Prime Minister Mark Carney confirmed the federal government is working with northern governments and the Inuvialuit, the Inuit whose land claim includes much of the waters in the Beaufort Sea, on whether to keep the moratorium. Other news outlets, including the National Observer , have reported on the government's plans, which were buried in its Budget 2026 document.

The federal budget contains $11 million over four years for Arctic offshore oil and gas governance. Northern premiers, including Nunavut's, have said they are interested in lifting the drilling ban. Although talks are happening with territorial governments and the Inuvialuit, Carney was quick to say the ban on drilling remains in place. "It is absolutely not in any way, shape or form a decision about lifting the moratorium. It is a respectful engagement," Carney said.

"It's respecting [Indigenous] self-government. But it's also, rest assured, respecting the environment." Carney said the $11 million would be used for capacity funding across a wide northern area that's co-managed by the Inuvialuit and the territorial and federal governments. In 2016, Trudeau government alongside U.S. President Barack Obama closed the door to future offshore oil and gas activity in both Canadian and American Arctic waters.

Canada declared a five-year ban. Offshore drilling in deep Arctic waters poses unique challenges. Oil and gas company Chevron put their plans on hold "indefinitely" in 2014 citing "the level of economic uncertainty in the industry." The company's plans faced scrutiny and questions about whether it could contain a catastrophic blowout, the kind seen in the Gulf of Mexico in 2010. The explosion on the BP-leased Deepwater Horizon resulted in the largest marine oil spill in history.

The Arctic's narrow ice season constrains the ability to bring in equipment to drill a relief well that could stop an oil spill.