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Amid tariff tension U.S. funding for Alaska Highway fixes in Yukon uncertain

Yukon Premier Ranj Pillai is closely watching the status of U.S. funding for the Shakwak corridor — a concern that remains for him despite a pause on tariffs
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Premier Ranj Pillai, left, announces money from U.S. neighbours for Alaska Highway fixes in the Yukon alongside territorial Highways and Public Works Minister Nils Clarke at the Whitehorse Grader Station in April 2024.

Yukon Premier Ranj Pillai is keeping an eye on a U.S. funding commitment to fix a janky portion of the Alaska Highway in the territory that connects the Yukon to Alaska.

“The U.S. government has requested a halt on many of their funding programs, and right now, we're keeping a close eye to see if there would be a change in this, which would be really significant,” Pillai told the News by phone on Feb. 3. 

“We know that this administration is looking to cut more funding in their government services and programs than has ever been seen before.” 

In February 2024, Pillai and Alaska Gov. Mike Dunleavy signed a deal for the stated purpose of improving a portion of the road known as the Shakwak corridor from Destruction Bay to the Yukon-Alaska border crossing near Beaver Creek. 

In April 2024, Pillai announced the territory has secured funding for upgrading that section of the corridor to the tune of over US$31 million (equivalent to about C$42.6 million) under the Statewide Transportation Improvement Program, or STIP. 

A press release dated April 25, 2024, via the State of Alaska Department of Transportation and Public Facilities confirmed the funding was approved by the Federal Highway Administration. The release refers to the road as a “lifeline for communities on both sides of the border, facilitating trade, tourism, and essential transportation.” 

Dunleavy called it a “significant milestone” in the partnership between the state and the territory. 

“This success in the STIP application underscores the importance of maintaining a safe and efficient passage for all visitors to the North, and we look forward to an exciting construction season ahead,” Dunleavy said in the release. 

According to Yukon government cabinet communications, the premier’s concern about the funding commitment stems from a paragraph about ending the Green New Deal in an executive order signed by U.S. President Donald Trump. The line states that agencies must pause disbursing funds appropriated through the Infrastructure Investment and Jobs Act, which is where cabinet comms said the funding falls under. 

Pillai’s concern remains despite a 30-day pause Trump’s proposed tariffs, announced Feb. 3. 

The Yukon government has started an economic analysis to figure out the potential impact on the territory of tariffs.  

Pillai spoke with the News ahead of the pause on Feb. 3. He figures he has an idea about who will be the most impacted if the tariffs eventually go into effect. 

“There will be an impact, of course, to those organizations that export, but I feel that the most significant pressure will come from increased costs for both Yukoners and for organizations that are purchasing or have purchased, you know, cheaper U.S. goods,” he said.  

Pillai is seeing how the tariff conflict could potentially affect some key Yukon exporters like Northerm Windows and Doors, and Hecla Mining Company, which is running the Keno mine and exporting silver. 

Pillai couldn’t put a number on estimated job losses for the Yukon, which is a concern for him despite the territory’s economic position and “very strong” labour market, if the tariffs go ahead. Given the Canadian federal government’s 50-per-cent cut to Yukon Nominee Program allocations, Pillai noted the territory was already heading into a more “competitive labour market.”  

Pillai's government has a better line of sight now as to what actions Trump’s administration could take, if Trump indeed follows through on the tariffs. Pillai said he has been meeting with First Nations leadership around border and Arctic security issues over the past two weeks.  

Pillai has tasked his officials to meet with the private sector, chambers of commerce, organized labour, First Nations chiefs and municipalities. 

“And we'll continue to work with both the Yukon Party and the NDP,” he said. 

Yukon Party Leader Currie Dixon supports Canada’s proposed retaliatory measures, according to a Feb. 4 statement to media. 

“Like all Yukoners, I have been watching with concern and frustration as the Trump administration contemplates unjustified tariffs against Canada,” Dixon said. 

Pillai briefed Dixon on the Yukon government’s plans for potential countermeasures, per Dixon’s statement. Dixon said he has questions about how those plans will be carried out, but in theory supports the “need for the Yukon to act on the proposed first phase of measures, including liquor sales and procurement provisions.” 

Dixon remains concerned about the uncertainty caused by the whole episode. His statement calls for reducing “red tape and regulatory burden” and pushing back against interprovincial barriers to trade.  

The Yukon NDP is encouraging Yukoners to buy local, support Canada and boycott corporate America. 

Yukon NDP Leader Kate White told the News by phone on Feb. 4 she stands with workers and businesses, who she plans to meet with. 

She suggested looking in at how intertwined the Yukon is with the U.S., and where that separation can be made.  

“An economic like trade war with your nearest neighbour is not going to be good for anybody,” she said. 

Yukon Federation of Labour President Teresa Acheson wants consultation with labour and unions as part of the unified approach. 

During a call with Ontario Premier Doug Ford, who is in the midst of a provincial election and chairs the Council of the Federation, a group of all Canada’s premiers, Pillai requested to talk to premiers about ensuring major grocers across the country properly label Canadian products at stores.  

Getting a sense of what potential tariffs could mean for tire traffic and cruise ship traffic from Skagway, Alaska and Haines, Alaska, depending if and what measures are put in place, is also on Pillai’s radar. He said the Yukon has been trying to diversify its tourism market to focus on Europe, Asia and Mexico. 

“We know a lot of people from Skagway come to Whitehorse for services and products. There's a lot of items that are imported to the Yukon from or through Skagway,” he said.  

For example, Pillai noted fuel gets shipped into Skagway, then gets trucked to the Yukon. 

The Liberal premier commented on his “very collegial relationship” with Alaska’s Republican governor. 

Dunleavy wasn’t available for interview with the News.  

Pillai said his message for Dunleavy matches his message to all U.S. decision-makers: “This is not the right path. We should be looking on how to collaborate more. We have an opportunity for both of our economies to be able to grow versus seeing these measures which damage both of our economies.”  

From a procurement standpoint, Pillai is looking at prioritizing Canadian materials and services. 

The Yukon government is reviewing its existing contracts as it builds its 2025-26 budget, which Pillai said will involve a significant infrastructure investment program.

The Government of Canada leads Canada’s economic response to the tariffs, per Pillai. 

Yukon MP Brendan Hanley issued a statement on Feb. 4 about breathing a “sigh of relief” given the one-month pause while noting Trump’s tariff threat remains. 

Hanley acknowledged the “very real anxiety” affecting businesses, families and communities. 

“We need to enhance interprovincial trade to boost economies and foster regional collaboration. Meanwhile, we’re working closely with Canadian businesses to work to address and minimize the impact on workers and communities,” Hanley said.  

“We are Team Canada, and we are Team Yukon.” 

Contact Dana Hatherly at dana.hatherly@yukon-news.com 



Dana Hatherly

About the Author: Dana Hatherly

I’m the legislative reporter for the Yukon News.
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