Canada's icy reception deepens doubts on G7 role

OTTAWA Wed Feb 3, 2010 2:38pm EST

The town Iqaluit, Nunavut on Baffin Island in the Canadian Arctic is shown at dusk August 16, 2009. REUTERS/Andy Clark

The town Iqaluit, Nunavut on Baffin Island in the Canadian Arctic is shown at dusk August 16, 2009.

Credit: Reuters/Andy Clark

OTTAWA (Reuters) - Canada is sliding out the dog sleds to welcome the world's top finance officials to the Arctic this weekend, but its unusual choice of venue has only underscored doubts as to whether the Group of Seven rich nations is relevant today.

At a time when extra clout for emerging powers like China has put the G7's future in question, Ottawa's decision to host the group's finance ministers and central bank governors in Iqaluit, a frostbitten outpost some 300 km (200 miles) south of the Arctic Circle, is not helping matters.

"With all due respect, the Canadians are crazy to organize it in a place like that," said one European official who declined to be named.

Canadian Finance Minister Jim Flaherty has said his peers approved of the "pristine and gorgeous" location.

But Washington, which played a key role last year in designating the Group of 20 developing and industrialized nations as the premier forum for economic issues, is seen as unenthusiastic about the meeting and has said nothing so far about what it wants on the agenda.

Iqaluit, which means "place with many fish" in the native Inuktitut language, is a town of about 6,000 that's accessible only by air or sea. Bad weather can leave travelers stranded for days, with thick fog possible in winter.

Flaherty sees the meeting as a chance to showcase Canada's Arctic to his international peers, and he is planning a dog-sledding adventure for his colleagues on Friday.

The following day the territorial government of Nunavut invites locals and delegates to a traditional Inuit feast that will feature local delicacies like caribou and raw and cooked seal meat, with "southern food" options for the timid. Some ministers are leaving early, before the feast.

Loaner sealskin vests will be a useful nod to winter temperatures that often fall below -40 degrees Celsius (-40 degrees Fahrenheit), but a potential red flag to Europeans seeking to ban sealskin imports because of protests about the hunt.

NO COMMUNIQUE

Participants say the Iqaluit talks will mark a return to the old G7 of informal "fireside chats" and there will be no written communique, robbing financial markets of a possible reference point.

Organizers say statements like this are outdated, especially as key financial players like China will be absent.

Bank regulations and exit strategies from recession will dominate, but without emerging economies like China, India and Brazil at the table, the scope of discussion will be limited.

Some speculate this will be the last G7 meeting of its kind and that the group, which comprises Britain, Canada, France, Germany, Italy, Japan and the United States, will be buried under an Iqaluit snowdrift.

But Canada says the G7 is the only group that has can react quickly and in unison to solve a global financial crisis.

As testament to that, officials say, every single finance minister and central bank governor is making the trek north.

But sources also say senior Canadian officials are frustrated at the logistic nightmare that Iqaluit has become, and some tried unsuccessfully to persuade Flaherty to switch to a location with easier access, better infrastructure and a more reliable phone and Internet service, like Ottawa or Toronto.

While the region's landscape is stunning, the town is hardly a showcase for foreign dignitaries, said Jim Bell, a 30-year resident and editor of the weekly Nunatsiaq News.

"This is not the time of year when the community is looking its best generally, and if it's overcast...all they're going to see is a bunch of ugly buildings and a lot of uncomfortable looking people shuffling around, hoods over their faces," he said.

(Editing by Janet Guttsman)