Prime Minister Stephen Harper announced the establishment Wednesday of a new national park in Canada's Far North.

Naats'ihch'oh National Park Reserve in the Northwest Territories will serve to protect the South Nahanni River, one of "the planet's great wilderness rivers," according to a statement from the Prime Minister's Office.

The park is located in Norman Wells, an isolated community about 680 kilometres northwest of Yellowknife.

The original proposal for the park included the protection of 7,600 square kilometers of parkland from commercial activity. However the final decision on the proposal cuts down the protected area to just over 4,300 square kilometres of lakes and mountains.

Officials said the total area of protected land was cut down because part of the territory has potential for mineral development.

“One of our objectives is to make sure we protect our environment and also allow for economic opportunity here," said Harper, who unveiled plans for the park as part of his annual tour through Canada's North.

This is the Prime Minister’s seventh tour of the North.

"The creation of this new national park reserve will further protect the rich natural wonders and cultural heritage of Canada's sovereign North," Harper said in a statement.

"It will also generate employment for those living in the Northwest Territories, who will contribute to the stewardship and conservation of the park reserve's lands and waters and educate visitors on the natural history and culture of the region."

The Naats'ihch'oh park takes its name from the Sahtu people, who were involved in the negotiations for the new reserve.

Frank Andrew, grand chief of the Sahtu, his band would’ve liked a bigger protected park.

Though Andrew is concerned about development, he said there are economic tradeoffs to consider.

"There are going to be different jobs and that for the people, we figure we'll might be able to balance that," he said. "Land protection is so important for our people."

Northwest Territories Premier Bob McLeod said the park negotiations are a good example of all levels of government working together with aboriginal groups to harness the country’s potential.

These working relationships need to be further developed, said McLeod.

“Our northern resources will benefit the entire country once unlocked," McLeod said. "We need to work as a confederation on energy matters. We cannot strand the Northwest Territories for another 40 years."

The issue of energy is sensitive to the town of Norman Wells. The town is home to some of the infrastructure used in the Mackenzie Valley pipeline project –- a 1,196-kilometre gas line from the Beaufort Sea to North American markets.

Residents of Norman Wells hoped the government would help cover the cost of an all-season road out of the community that would help build more of the required infrastructure.

The federal government has given some money to the oil-and-gas industry to help compensate, but Harper suggested that no more funding would be provided.

"Fundamentally, the proponents themselves have to make a decision on whether these projects are commercially viable," Harper said.

Robert Huebert, University of Calgary professor of political science and associate director of the Centre for Military and Strategic Studies, told CTV News Channel Wednesday that the government’s priorities during this tour are likely a response to past condemnation.

“Obviously they’re responding to some of the criticisms that have emerged that they haven’t focused enough on the people themselves,” he said.

“Traditionally he’s given more of an emphasis on the international side looking at sovereignty and security issues. This time it’s clear it’s on resource development, conservation with new parks and reserves and I suspect we’ll see some infrastructure announcements by the time he gets to Churchill,” said Huebert.

Huebert said the government will likely focus more attention on the North, as Canada takes on the chairpersonship of the Arctic Council next year.

Harper spent Tuesday visiting the Yukon's Minto gold and copper mine, where he extolled the virtues of the resource-rich region and talked about the need for streamlined approvals for natural resource projects.

The federal government and local First Nations groups have been in negotiations since 2007 to try and work out an agreement on the proposed Naats’ihch’oh National Park Reserve, focusing on issues such as boundaries, fishing and hunting rights and co-operative park management.

According to a Parks Canada document about the Norman Wells reserve, a national park reserve differs from a national park only in that the land is subject to a claim by a group of Aboriginal people that has been accepted for negotiations but not yet settled.

"Local Aboriginal people may continue their traditional hunting, fishing, trapping, gathering and spiritual activities, and can be involved in co-operative management of the national park reserve," the document said.

While Harper has made national parks a priority for his government, the March federal budget slashed funding for Parks Canada.

As a result, services have been reduced or eliminated at many parks including those in the North, and many locals have been concerned about a resulting drop in tourism.

On Tuesday, Harper wouldn't commit to reversing the cuts but said funding for Parks Canada will be examined on an ongoing basis.

With files from The Canadian Press and writer Andy Johnson