IQALUIT, Nunavut — Canada has made a 6 billion-Canadian-dollar ($4.2 billion) deal with Australia to develop a cutting-edge radar for the Arctic that can detect hypersonic missiles and other threats over the curvature of the Earth, Prime Minister Mark Carney announced Tuesday.

Carney also announced hundreds of millions of dollars in new spending to carry out year-round military exercises in the Arctic and to build up vital infrastructure for the Indigenous communities that make up most of the population there.

The new Canadian funding and operational plans come amid a crisis in the U.S.-Canada relationship as a result of President Donald Trump’s continued threats to crush the Canadian economy through tariffs and to annex it to the United States.

Trump Expresses Interest in Annexing Greenland

Trump has also expressed an interest in annexing Greenland, part of a broader play for dominance in the Arctic, where Russia and China are also flexing their muscle as the region emerges as a new frontier for global competition.

Carney’s announcement Tuesday signaled Canada’s renewed interest in asserting its sovereignty over its immense Arctic territory, amid intensifying and shifting geopolitical pressures that raise doubts about his country’s core defense alliance with the United States.

“Canada is, and forever will be, an Arctic nation,” Carney said during a four-hour stop in Iqaluit, near the Arctic Circle, the capital of the northern Canadian territory of Nunavut, on his way back to Ottawa, Ontario, from a quick visit to Europe.

“We are strong, united and sovereign,” he added.

New Radar Will Be Deployed Under NORAD

The new radar, which Australia has developed, is known as over-the-horizon radar technology and is expected to be delivered by 2029, said a senior Canadian official who was not authorized to speak to reporters on the record.

It will be deployed under NORAD, the North American Aerospace Defense Command, the agreement between Canada and the United States to jointly manage and defend the skies over the two countries. The command was established in the early 1980s, when the prospect of Soviet missiles and bombers crossing the Arctic was considered the gravest threat to North America.

The decision to opt for Australia as a provider for the advanced radar technology was supported by the U.S. military, the senior Canadian official said, highlighting that despite the now-rocky relationship between Canada and the United States, military cooperation has continued.

Developing military technology and maintaining personnel in the Arctic is a major challenge because of the extreme weather conditions. Conventional equipment does not work properly in arctic conditions, and maintaining bases that can be staffed the entire year is a challenge because access to the area is limited.

Advancing Defense Has Been a Long-Standing Demand

Advancing Arctic defense has been a long-standing demand of Canada by the United States. Canada, which is also a member of NATO, has committed to spending more toward its overall defense budget to reach the threshold of 2% of its economic output — the NATO target for all member nations.

But as Canada tries to boost its military spending, it faces new challenges over the procurement of equipment.

Trump said last week that he would not allow Canada to use icebreakers that the United States has ordered unless it became the 51st U.S. state.

“If you’re a state, you can be part of the deal, but if you’re separate country, you’ve got to get your own icebreakers,” Trump said. That led to calls in Canada to cancel an order for F-35 aircraft from the United States.

Carney also announced Tuesday that Canada had set aside CA$420 million to carry out three to four new military exercises in different places in the Arctic, in order to enable it to maintain personnel there throughout the year.

He also said that the federal government would spend CA$253 million to improve infrastructure for the local people, who are mostly Inuit. Nunavut, with a land area nearly the size of Mexico, has a population of about 37,000.

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This article originally appeared in The New York Times.

By Matina Stevis-Gridneff/Alex Welsh
c. 2025 The New York Times Company