With Ottawa’s defence push, Calgary's ATCO eyes more deals after investing in Arctic venture

After buying a major stake in a company looking to build a deepwater port in the Arctic, Calgary-based ATCO Ltd. says it’s looking for more deals, particularly in Canada’s North.

“There is an immense opportunity available to us,” Jim Landon, president of ATCO Frontec, which handles the company’s defence contracts, among other services, told a Calgary audience.

“But bold ambitions for the Arctic can only be achieved if we do it together and with northern communities leading the way,” Landon said. “We need to work out how we’re going to do this faster, but without taking shortcuts.”

The company launched ATCO Frontec in 1987 to help operate and maintain the North Warning radar system, which detects aircraft and cruise missiles across swaths of Arctic airspace. That arm of the business went on to provide support services at Kandahar Airfield in Afghanistan for close to a decade, along with several NATO contracts.

Earlier this week, ATCO announced it will buy a 40 per cent stake in a company that plans to build a deepwater port along the Northwest Passage.

West Kitikmeot Resources Corp.’s project, expected to cost $1.2 billion, also includes a 230-kilometre all-season road north of Yellowknife and a new airstrip.

The proposal, called the Grays Bay Road and Port Project, is on Ottawa’s major projects list for fast-tracking and would create the first overland connection between the Arctic Ocean deepwater and North America’s highway systems.

“What ATCO brings to us is a whole bunch of sets of experiences that we know we’re going to need,” Elliot Holland, chief operating officer of West Kitikmeot, told reporters at the Arctic Energy and Resource Symposium in Calgary.

Holland noted that although Prime Minister Mark Carney is unveiling major federal commitments above the 60th parallel, there is an expectation that the program will not be entirely government-led.

“They expect to see private industry investing along with government in these projects,” Holland said, adding that bringing more private backing to the table through ATCO sends an important signal to the government.

Increased defence spending presents opportunities, says ATCO Frontec president

On Thursday, Canada hit the NATO spending target — two per cent of the country’s GDP — a major step in the country’s march towards five per cent by 2035, according to the Department of National Defence.

However, critics have accused the federal government of using creative accounting practices to boost defence spending — by providing pay raises to Canadian Armed Forces personnel and moving the Canadian Coast Guard beneath the Department of National Defence’s umbrella.

“I did joke to somebody a year or so ago that if you wanted to get there quickly, the best way to do it was to give everyone a pay raise,” Landon quipped. “I also joked you should bring the Coast Guard in there. So obviously somebody was listening to my jokes.

“It’s a very good move. If you want to retain people, then pay them more money,” he said, adding that it made sense to bring the Coast Guard in as well.

Landon added that the rapid climb in defence spending — worth billions of dollars — presents many opportunities for ATCO.

“A large part of that (spending) is going to be in the north, and it’s going to be on infrastructure, and that is what we do,” Landon said.

Landon added that there’s likely to be increased military activity in the North in the coming years, particularly from the navy and coastguard.

“The projects that tend to get the headlines at the moment are things like F-35 and submarines and so on,” Landon said. “They’re important, but it’s no good if you can’t land it somewhere, if you can’t dock it somewhere, if you can’t refuel it, if you can’t rearm it.”

swilhelm@postmedia.com