In 1958 the Canadian government made the historic decision to build a 671-kilometre (417-mile) road through the Arctic wilderness from Dawson City, Yukon, to Inuvik in the Northwest Territories. Oil and gas exploration was booming in the Mackenzie Delta and the town of Inuvik was under construction. The road was billed as the first-ever overland supply link to southern Canada, where business and political circles buzzed with talk of an oil pipeline that would run parallel to the road. The two would ultimately connect with another proposed pipeline along the Alaska Highway.
All eyes turned to the Yukon on Aug. 17th, 1959, when Ottawa announced that oil had been discovered in the territory’s Eagle Plain. Sometimes a government can move with amazing speed. Almost in the next breath, Ottawa gave major concessions to the oil industry in an attempt to stimulate more exploration in Eagle Plain. All that drilling equipment and infrastructure couldn’t get in—and all that oil and potential tax revenue couldn’t get out—without a highway across the Arctic Circle. The sounds of bulldozers filled the air as construction began at Dawson City in January of 1959. But high costs and bickering between the federal and Yukon governments kept progress to a snail’s pace until 1961 when it stopped altogether. Only 115 kilometres (72 miles) of roadbed was built before the project was abandoned.
Nothing happened until 1968, when the Americans discovered huge reserves of oil and gas at Prudhoe Bay, Alaska. A high-stakes poker game developed between Washington and Ottawa. Billions of dollars were at stake, and political fortunes hung in the balance on both sides of the border. The Canadian government was afraid that the United States would develop the massive oil field with no consultation, no consideration and no benefits to its next-door neighbour. It wanted to assert Canadian sovereignty over the arctic seabed off the Yukon’s north coast in the Beaufort Sea, and over the Arctic Islands which hadn’t been formally claimed by any nation.