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Aaju Peter moved to Iqaluit in 1981. Her five children illustrate the Catch-22 in the Arctic economy: they have ambitions but lack training opportunities.

Aaju Peter laughs when she recalls the sight confronting her when she moved to Iqaluit in 1981: Houses. A landing strip. A few stores. A school.

Then she pauses. Almost 30 years later, not much has changed.

"We have more houses and more stores. But I don't think we have very much of a longer-term plan."

There are inukshuks in Paris and Inuktitut script on federal government websites - once again, Canada's northern residents are at the forefront of Ottawa's Arctic sovereignty campaign.

But Canada's final frontier is also its most development-starved: Between the contested underwater continental shelf and the Radarsat-2 satellite lie dozens of largely isolated communities that lack the transportation, housing and communication infrastructure needed to back up Ottawa's claims of an inhabited Canadian Arctic.

Excerpt: Northern Exposure: Peoples, Powers and Prospects in Canada's North

Social and economic development in Canada's Arctic communities lag other countries in almost every indicator. The region's greatest potential lies in its most vulnerable assets: its rich natural resources, which are vulnerable to climate change, and its youth, who are killing themselves at rates far exceeding the rest of Canada.

"When Canada talks about sovereignty, it's not just about militarization of the Arctic and it's not just about investing in the big infrastructure," said Mary Simon, president of Inuit advocacy group Inuit Tapiriit Kanatami. "We're not against that. We just say that's not the only thing that should be happening in the Arctic. There's a human dimension to all of this."

More is at stake than humanitarian concerns, experts say. If Canada drops the ball on its northern residents, the entire sovereignty endeavour loses legitimacy: Canada's efforts to dictate resource development and environmental policy, become moot if the country can't foster sustainable communities in the territory.

Much of Canada's historic claim to the Arctic has been underpinned by the presence of communities there. In the 1950s, Ottawa forcibly relocated almost 100 Inuit from northern Quebec and Baffin Island to Resolute Bay and Grise Fiord to cement Canada's claim to the area. The tactics changed but the intent remained with the 1993 Nunavut Land Claim, which stated "Canada's sovereignty over the waters of the Arctic Archipelago is supported by Inuit use and occupancy."

But the impression of failing Northern communities doesn't bode well for Canada's long-term claims, said University of British Columbia politics professor Michael Byers.

"If the federal government is not upholding its side of the bargain … that undermines the credibility of Canada's reliance on the Inuit use and occupation."

Prime Minister Stephen Harper's government has been more ambitious than any in decades when it comes to asserting Canada's sovereignty and promoting development in the North. An economic-development office promised during last year's election campaign and this year's Throne Speech has been set up with a $50-million budget over the next five years.

The new agency has its work cut out for it.

Some of the solutions seem deceptively simple: Communities need houses, schools, harbours, airports, roads and expensive satellite broadband. Without these things, any significant commercial or educational enterprises in the far North will be next to impossible.

"These are not unmanageable issues," said Jim Bell, editor of the Iqaluit-based Nunatsiaq News. "We are suffering from severe infrastructure shortfalls that are hampering economic development here."

Ms. Peter's five children could be poster children for the employment Catch-22 in Canada's Arctic economy. The region desperately needs skilled labour to do everything from build houses to fly planes but residents can't get the necessary training. Those positions don't get filled, infrastructure doesn't get built, the economy worsens and locals' chances at higher employment diminish even further.

Ms. Peter's oldest daughter, now 24, wanted to be a pilot but couldn't get training. She works as a Hansard editor for the government and enjoys it. But Ms. Peter can't help questioning the absurdity of the situation in a region desperately in need of pilots.

"What opportunity is there for anyone in the community aside from being a carver, or aside from making handicrafts?"

Some residents, like Sandra Inutiq, suggest the only solution is to start a university in the Arctic. Ms. Inutiq graduated this year with a law degree through the Akitsiraq program, which allowed her to take courses by correspondence, study the Inuit language and study with elders.

For Bob Reid, the answer to the region's economic inertia is simple: Make it easier to do business north of the 60th parallel.

Mr. Reid is president of the Aboriginal Pipeline Group, which represents four native communities' one-third ownership in the $16.2-billion Mackenzie Gas Project.

If the pipeline is approved, it's projected to inject $20-million annually to the aboriginal group. But the project has stalled at the environmental-assessment stage, which began in 2004.

"You're not going to see investment in the North when it takes six years to get approval for something."

That's one thing Tim Gardiner, director of Northern development for Indian and Northern Affairs Canada, hopes the federal government's new office will be able to accomplish. Although its initial purpose will likely consist simply of disbursing grant money that already exists, he would like to see it take on a more active role facilitating resource development.

The Harper administration isn't the first government to campaign on lofty promises of staking out Canada's claim to the polar regions.

"There's a very long history of federal governments making grand promises concerning the Arctic and winning elections, in part because of those promises, and then failing to actually implement them," Prof. Byers said.

But now, the North's needs are much more pressing during Mr. Harper's administration than they were in Mr. Diefenbaker's time.

"Mr. Harper has done quite a bit on the Arctic in terms of promises. … He clearly is aware of northern Canada and the situation that's unfolding there," Prof. Byers said.

"But he needs to deliver and he needs to deliver fairly quickly."

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