The Canadian Coast Guard icebreaker Louis S. St-Laurent sails past a iceberg in Lancaster Sound as part of a sovereignty and research patrol through Canada's Arctic in July 2008. (Jonathan Hayward/Canadian Press)

The federal government says it will spend $5 million to study a proposed marine conservation area in Lancaster Sound at the eastern gate of the Northwest Passage.

"As global climate change continues and traffic through the Northwest Passage is expected to increase, our government is committed to safeguarding Canada's Arctic," Environment Minister Jim Prentice said Tuesday.

Lancaster Sound, off the northern shores of Baffin Island, is marked by a dramatic coastline dominated by 300-metre cliffs, bays, inlets and deep fiords.

It's also rich in wildlife: Most of the world's narwhal, as well as large numbers of beluga and bowhead whales, swim among the icebergs that bob in its waters.

Polynyas — large sections of year-round ice-free water — make rich habitat for seals and walrus, which in turn attract numerous polar bears. Seabirds flock there in the hundreds of thousands.

The region has been on Parks Canada's conservation list for decades, and it was once considered for UNESCO World Heritage Site status.

Like other Arctic waterways, Lancaster Sound is experiencing melting sea ice that makes it increasingly accessible. Commercial shipping and private voyages are slowly increasing, as is international pressure to exploit Arctic energy and fishery resources.

Ocean dumping, undersea mining and energy exploration would be banned in a marine conservation area. The designation would also allow the government to manage fisheries.

Conservation groups have expressed support for the proposal. Arctic experts have also said it would strengthen Canada's sovereignty over the disputed waterway — although not as much as a UNESCO designation would have.

The feasibility study is just the first step in creating a park. Any formal designation is still two or three years off and depends on successful negotiating of benefits and co-management agreements with local Inuit.

An assessment of minerals and other resources also has to be done.