For decades, the closest thing Canada and Denmark had to a shooting war was a bottle of liquor. Hans Island sits in a strait barely 35 kilometres wide between Ellesmere Island and Greenland, a lump of uninhabited rock nobody could plausibly live on, and starting in the 1980s, Canadian and Danish soldiers took turns visiting it, planting their own flag, and leaving a bottle behind for whoever showed up next: Canadian Club for the Danes, schnapps for the Canadians. Journalists dubbed it the Whisky War. It ran for almost forty years before the two governments finally sat down in 2022 and drew a line straight across the island, splitting it in half. Nobody was ever in real danger. But the fact that two NATO allies spent four decades trading flags and booze over a rock rather than resolving it by force is itself the story: it shows how much of Arctic sovereignty is about who shows up and how, more than who technically owns what.

Most of Canada’s Arctic claims aren’t actually in dispute. The islands themselves, the mainland territory, nobody seriously contests Canadian sovereignty over the land. What’s genuinely unsettled is the water, and above all the Northwest Passage, the tangle of channels threading through the Arctic archipelago that connects the Atlantic to the Pacific. For most of the twentieth century that dispute was mostly academic, because the passage was choked with ice nine or ten months of the year regardless of what anyone claimed about it. Warming has started to change that, and the legal fight nobody had to resolve is starting to matter in practice.

Background

Canada’s hold on the Arctic islands themselves dates to an 1880 transfer from Britain, and by the mid-twentieth century that piece was settled. The water between the islands was a different matter, and Canada didn’t force the question until 1986, when Ottawa drew straight baselines around the outer edge of the archipelago and declared everything inside (the Northwest Passage included) to be internal Canadian waters. Under that position, the passage is legally no different from a river or a bay: foreign ships need Canada’s permission to enter, full stop, and Canadian law, including environmental law, applies without exception.

Washington disagrees, and so, more quietly, does Brussels. Their position is that the passage is an international strait, and that ships of any nation have a right of transit passage through it that no single country gets to gate-keep. Both positions are legally serious, both sides have held their ground for decades, and neither has any real incentive to litigate it and risk losing.

What actually forced the issue

The dispute stopped being theoretical in 1969, when Humble Oil (the company that eventually became part of Exxon) sent a reinforced supertanker called the SS Manhattan through the Northwest Passage to see whether it was feasible to ship Alaskan crude that way instead of building a pipeline. The company informed Canada as a courtesy. It did not ask permission. The ship made it through, barely, with Canadian icebreaker help it hadn’t exactly requested either, and the whole episode landed like a provocation in Ottawa: an American company had just demonstrated, in practice, that it didn’t think it needed Canada’s sign-off to sail through what Canada considered its own water. Parliament passed the Arctic Waters Pollution Prevention Act within a year, asserting environmental jurisdiction over the passage regardless of who agreed with the underlying sovereignty claim.

It happened again in 1985, this time with a U.S. Coast Guard icebreaker, the Polar Sea, which transited the passage without formally seeking Canadian consent. That one actually strained the relationship enough to produce a fix: the 1988 Arctic Cooperation Agreement, under which Washington agreed to ask Canada’s permission before sending icebreakers through, while both governments explicitly and permanently agreed to disagree about the underlying legal question. It is, by design, a deal that resolves nothing and has worked precisely because it doesn’t try to.

Key actors

The United States is the main counterpart, which is what makes the whole dispute so delicate: Canada’s closest ally and its most important trading partner is also the country most publicly unconvinced by Canada’s central Arctic legal claim. Russia looms in the background as the Arctic’s largest state by territory and the one investing most aggressively in northern military capability. China has started calling itself a “near-Arctic state,” a label geography does not obviously support, and has pushed for a bigger seat at Arctic Council tables. And running through all of it, treated too often as background rather than as the actual foundation, are Inuit communities, whose use and occupancy of Arctic land and water for millennia is part of the legal and moral basis of Canada’s claim in the first place, not a footnote to it.

Numbers

The Arctic archipelago runs to tens of thousands of islands, and the “Northwest Passage” isn’t one route but several possible ones threading through them, some barely charted even now. What’s changing is the ice, not the geography: the navigable season is stretching from a few weeks a year toward something closer to a real shipping window, though the passage remains genuinely hazardous: poorly surveyed in places, unpredictable, nothing like a reliable alternative to Panama or Suez. Commercial traffic is still a trickle by global standards. That’s a large part of why the legal dispute has stayed dormant this long: there’s been no economic pressure forcing a resolution.

Policy stakes

Three things are actually open. The passage’s legal status is the big one, if and when traffic really does rise, the gap between “internal waters” and “international strait” stops being an academic disagreement and starts determining who controls shipping, environmental rules, and security in the channels. The second is the continental shelf: under the UN Convention on the Law of the Sea (UNCLOS), Canada, Russia, and Denmark have all filed overlapping claims to the seabed stretching toward the North Pole, a process that will be settled (eventually) through geology and law rather than through whoever gets there first.

The third is less a legal question than a capacity one. Sovereignty in the North isn’t just a legal position, it’s a function of whether you can actually see what’s happening there and respond: surveillance, icebreakers, ports, a real presence built with and for northern and Indigenous communities rather than around them. Canada’s persistent shortfall on that front is, in the end, as much a sovereignty problem as anything written in a UNCLOS filing.

Reading list

  • Canada’s Arctic and Northern Policy Framework
  • The 1988 Canada–U.S. Arctic Cooperation Agreement
  • Government of Canada materials on the 2022 Hans Island settlement with Denmark
  • UN Convention on the Law of the Sea and Canada’s continental-shelf submission
  • Inuit Tapiriit Kanatami and Inuit Nunangat materials on Arctic sovereignty and self-determination