Finance Minister Jim Flaherty prepares to dog sled just on the outskirts of Iqaluit on Friday. Iqaluit is the site of the G7 meeting of finance ministers and central bank governors. (Fred Chartrand/Canadian Press)

Some finance ministers and central bank governors from seven of the world's richest countries rode on dogsleds near Iqaluit on Friday, before sitting down to discuss problems facing the global economy.

The two-day Group of Seven finance ministers' conference, the first high-level international meeting to be held in the Nunavut capital, is considered a venue for relatively informal discussions between financial leaders from Canada, Japan, Germany, France, Italy, the United Kingdom and the United States.

The meetings, described as informal "fireside" chats, are slated to begin Friday evening.

Unlike past G7 meetings, no concluding written communiqué will be issued when talks wrap up on Saturday.

Serious discussions coming: Flaherty

On Friday afternoon, Canadian Finance Minister Jim Flaherty and other world leaders were taken on dogsled tours on the sea ice on Frobisher Bay.

Flaherty went out first, followed by Bank of Canada governor Mark Carney. Other international delegates who went sledding included Giulio Tremonti, Italy's minister of economy and finance, and Bank of England governor Mervyn King.

"It's uniquely an Arctic experience. It's one of the great reasons to be here, and we can enjoy that kind of thing and then we get onto more serious discussions," Flaherty, wearing a black parka, told reporters afterwards.

"I'm so happy that all of my colleagues were enthusiastic about coming to Nunavut. I mean, we usually meet in rather glamourous cities, and this time we're meeting in a more modest place — but, I dare say, a very interesting place."

Finance leaders from the United States were delayed in arriving in Iqaluit on Friday, mainly due to a snowstorm in the Washington, D.C., area.

Banking reform a priority

G20 meetings, which include emerging economies such as China, Brazil and India, have become the more influential forum for establishing global economic policies.

Attendees are set to discuss a range of issues during the business portion of the G7 session on Saturday, including financial-system reform, the need to address China's undervalued currency, when and how nations should deal with mounting deficits, and Haiti reconstruction.

In terms of banking reform, Flaherty acknowledged there is a divide among nations on how to prevent a repeat of the global market crisis.

At the same time, he said everyone agrees that the public must be protected against the failure of major financial institutions.

"It's not something that happened in our country here in Canada, fortunately. We have strong regulation [and] a strong banking sector," Flaherty said.

"But we need to consider the kind of moral hazard that happens with institutions thinking they'll be bailed out by taxpayers internationally, and I'm sure that we'll work on that to try to have a more uniform approach."

Canada is urging G7 countries to come up with stricter rules and regulations for the banking sector, but Flaherty said the member nations don't agree on what form those rules should take.

Canadian Bankers Association president Nancy Hughes Anthony said her organization supports international reform, but hopes it won't punish Canadian financial institutions that weren't to blame for the banking collapse that led to the global recession.

"We really have to be careful that whatever solutions are put into place don't have us lose our competitive advantage," she said.

Drawing attention to Arctic sovereignty

The choice of Iqaluit as the location for the meeting raised some eyebrows internationally, but Canadian officials said it was made to get the ministers and bank governors away from the big-city atmosphere so they could discuss economic problems without distractions.

Flaherty said his government also wanted to draw attention to the issue of Arctic sovereignty by having the high-level meeting in a remote northern community.

"Absolutely. It's one of the purposes of having the meeting in the Far North, to demonstrate Canada's sovereignty in the Arctic," Flaherty said Thursday.

Many of Nunavut's leaders are also making the Inuit seal hunt an issue to display disapproval of the European Union's trade ban on seal products.

Nunavut Premier Eva Aariak and Iqaluit Mayor Elisapee Sheutiapik have both been seen wearing sealskin clothing around the city.

As well, visiting journalists have received sealskin buttons, along with information about the Inuit seal hunt, from Aariak and other Inuit leaders.

"I hope that they will learn more about the fact that sealskins and seal products are totally part of our everyday life," Aariak said.

"This is not a show; this is who we are."

Nunavut Conservative MP Leona Aglukkaq, who is also the federal health minister, arrived in Iqaluit on Thursday wearing a tunic trimmed with sealskin.

Few protests expected

The European Union trade ban has limited exemptions for seal products harvested by Inuit, but Inuit leaders in Canada and Greenland are suing the EU over the ban, arguing that the exemptions are not clearly defined.

Inuit who hunt seal for a living — seal has long been harvested for food and clothing — argue that they harvest seals humanely and sustainably, and say the ban has already had an effect on their business.

Inuit hunters are planning to hold a cultural seal-skinning demonstration outside the Nunavut legislature on Saturday, while G7 talks are underway.

RCMP have designated areas around Iqaluit for protesters, but say they anticipate few activist groups to come from outside Nunavut because of its remote location and the high costs of flying north.

Officials with at least one group, the World Wildlife Fund, say they plan to make an appearance in Iqaluit to demand a financial commitment to addressing climate change.