SOMBA K'E/YELLOWKNIFE - The new Northern Economic Development Agency headquarters will be in Iqaluit, Prime Minister Stephen Harper announced Tuesday morning in the Nunavut capital, going against the advice of his senior officials.

Prime Minister Stephen Harper announces Iqaluit as the location for the new Northern Regional Economic Development Agency promised in the 2009 federal budget. Behind Harper is Chuck Strahl, minister of Indian and Northern Affairs. - Gabriel Zarate/NNSL photo

All three territories had lobbied for the agency, but after months of speculation the riding of Conservative Leona Aglukkaq, Minister of Health, won the fight. The Harper government has earmarked $50 million over five years, at $10 million a year, for the agency to deliver federal funding for economic development, advocacy and research. Harper admitted his senior officials gave him a "million reasons" why it shouldn't be in Iqaluit.

"It's much more difficult to house an agency here, create an agency here, staff an agency here, overcome all kinds of technical problems," Harper said. "And my reaction, the more I thought about this, the whole idea of this agency is it's supposed to be an economic development agency. So why don't we as the federal government face that directly by putting the agency where the challenges are the greatest and overcoming them ourselves?"

Harper said he consulted with Indian and Northern Affairs Minister Chuck Strahl and his caucus, but ultimately it was up to him to make the choice.

"Every territory government wants the agency headquartered in their territorial capital," Harper said. "I think that's safe that in the end the decision was mine."

Strahl, who accompanied Harper on his trip to Iqaluit, said the new agency will create approximately 30 jobs in Iqaluit, but did not say how many there will be in the other regional offices expected to open in Yellowknife and Whitehorse.

Mayor Gord Van Tighem said he was a bit disappointed by the announcement but is pleased to have the agency in the North.

"We always believed it should be central where you could reach all sides easily," he said, adding it is a big first step to have this in place. "Now it's a matter of working with it. The other thing will be to see how well funded it is."

Van Tighem said he is hoping the development agency will be as successful as those in Western and Atlantic Canada, adding there isn't a lot of new money allocated for the agency, so he's cautiously optimistic.

"The proof will be in the cake," Van Tighem said. "Once they bake it we get to sample it."

Western Arctic MP Dennis Bevington said it was a poor choice to base the headquarters in Iqaluit and the decision was nothing more than a political one.

"I hope this isn't the direction this agency is going to take," he said.

Harper will be in Yellowknife tomorrow afternoon, but his office is tight-lipped about the specific details of the visit. Andrew MacDougall, deputy press secretary to the Prime Minister's Office, confirmed the prime minister will land in Yellowknife late Thursday afternoon to make an announcement, but no other details will be provided until some time today.

"There will be a press release sometime Wednesday with all the details of the announcement," MacDougall said.

Harper will visit Yellowknife on the fourth day of a five-day trip that began in Iqaluit on Monday. In addition to the Yellowknife and Iqaluit visits, Harper will stop over in Pangnirtung and Whitehorse, where he is expected to reveal spending and policy initiatives.

- with files from Gabriel Zarate