Quarterly Financial Report For the quarter ended June 30, 2026

Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. It should be read in conjunction with the Main Estimates and the Supplementary Estimates (A). This report has not been subject to an external audit or review.

The Canadian Northern Economic Development Agency (CanNor) works with partners to advance economic development in Canada's territories. The Agency supports, invests in and advocates for national, territorial and community level economic development; fosters growth and innovation; contributes to building capacity; and invests in foundational economic development projects in the territories. Through the Northern Projects Management Office (NPMO), CanNor works across governments, Indigenous partners, and proponents to support regulatory and Crown consultation processes for major projects in the North. NPMO coordinates federal participation in impact assessment and regulatory review processes and maintains the Crown consultation record for these projects. Through Pilimmaksaivik, the Federal Centre of Excellence for Inuit Employment in Nunavut, CanNor supports Government of Canada obligations under Article 23 of the Nunavut Agreement to achieve a representative federal public service. Pilimmaksaivik organizes a government-wide approach to help Nunavut Inuit build careers in the federal government.

Further details on CanNor's authorities, mandate and program activities may be found in the Departmental Plan and the Main Estimates.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency's spending authorities granted by Parliament, and those used by the Agency consistent with the Main Estimates and Supplementary Estimates (A) for the 2026-2027 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

The Agency uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of fiscal quarter and fiscal year-to-date (YTD) results

Risks and uncertainties

While the North presents opportunities for economic development, growth and innovation, factors including its vast and remote geography, lack of infrastructure and housing, connectivity challenges, the cost and access to energy, and shortage of skilled labour all contribute to a challenging operating environment. These factors create additional challenges for businesses and can also prevent Northerners from fully benefiting from economic development opportunities.

CanNor's key risks (and response strategies) are published in the Departmental Plan:

1. Infrastructure deficit and housing pressures: The North's infrastructure deficit including transportation, energy systems, and critical housing shortages remains a structural barrier to Arctic security, economic competitiveness, and affordability. Delays in infrastructure development can undermine project viability, increase costs, and weaken Canada's ability to assert sovereignty.
2. Economic uncertainty and sector concentration: Territorial economies remain highly exposed to global commodity cycles, pending mine closures, and international trade disruptions. As the North continues to pursue sector diversification while relying on the mineral extraction sector for most private investment and growth, international trade disputes could significantly undermine its economic stability, straining household consumption and business investment.
3. Labour and workforce capacity constraints: Labour shortages, demographic shifts, and skills gaps may delay project delivery, reduce productivity, and impede progress toward implementing commitments under Article 23 of the Nunavut Agreement.
4. Climate impacts and infrastructure vulnerability: Climate change continues to disrupt northern transportation corridors, supply chains, and construction timelines increasing project costs, shipping, and operational risk. The territories may be uniquely impacted by this with shorter construction seasons, fragile supply chains, and disproportionate climate disruptions potentially impacting the viability of projects and other economic development and diversification activities.
5. Evolving international Arctic security dynamics: Heightened geopolitical tensions and expanded defence investments are reshaping Arctic infrastructure and procurement landscapes. Without coordinated planning, economic opportunities linked to defence and sovereignty investments may bypass northern businesses and communities. In response to these pressures, the Government of Canada released the 2024 Our North Strong and Free: A Renewed Vision for Canada's Defence initiative and Canada's Arctic Foreign Policy, and is now directing substantial new spending towards northern defence.

Significant changes in relation to operations, personnel and programs

There have been no significant changes in relation to operations, personnel and programs for the quarter ended June 30, 2026.

Approved by