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The federal government is striking the right pragmatic note in expressing its resolve to settle international disputes in the Arctic and to make the eight-nation Arctic Council more effective.

The Department of Foreign Affairs' new policy paper presents "exercising our sovereignty" as the first of four pillars of Canada's northern strategy. The actual exercise of that sovereignty will be more likely if Canada shows some degree of flexibility and willingness to co-operate, rather than posture.

The dispute with Denmark about Hans Island and a section of the Lincoln Sea to the north of it, has little practical significance; a compromise should not be hard to achieve. The area is neither rich in resources nor a feasible sea route to anywhere.

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There is much more at stake in how to draw a line from the northern end of the land border between Yukon and Alaska through the Beaufort Sea. This raises questions of both navigation and resource extraction. It is, however, in the mutual interest of Canada and the United States to establish the boundary so that both countries can put their minds to future development, proceeding with caution; the new policy paper rightly adverts to BP's disaster in the Gulf of Mexico, and says that there will be no oil drilling in the Beaufort Sea before 2014, to allow time to plan prudently.

By contrast, the government sounds absolute on Canada's right to its continent shelf, an appropriately strong opening position, considering Russia's extravagant claims and the United States' persistent non-ratification of the Convention on the Law of the Sea.

On the Northwest Passage, the Canadian International Council's recent report Open Canada: A Global Positioning Strategy for a Networked Age is able to be more frank than the federal government, saying that, apart from whether these waters are simply Canadian property, Canada is the right country to regulate their use - which need not entail the power to exclude the vessels of other nations.

Among the benefits of a clarified framework for the Arctic would be an increase in opportunities for the Inuit and other indigenous peoples of the North.

Though the CIC report goes further than the government in advocating a full-time staff and budget for the octopartite Arctic Council, but it follows logically from Foreign Affairs' strategy. Canada was active in the council's creation, but has sometimes neglected it.

The government's new policy statement is a salutary mixture of pragmatism and principle, which offers real hope of a more vigorous Canadian presence in the Arctic.

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