Canadians have a new national park to hike, paddle and play in, Prime Minister Stephen Harper announced today, but some are saying his government favoured mining interests over the environment when drawing its boundaries.

Harper announced the official establishment of the Naats'ihch'oh National Park Reserve while in Norman Wells in the Northwest Territories as part of his tour of the North.

The new protected area covers 4,850 square kilometres and is situated in the Sahtu Settlement Area, inhabited by the Sahtu Dene and Métis of the Tulita District. The boundaries protect 70 per cent of the upper portion of the South Nahanni River, famously known by paddling, hiking and other outdoor enthusiasts. The new park reserve touches Yukon's border and is adjacent to the Nahanni National Park Reserve which was expanded in 2009.

"Today's announcement will ensure that almost the entire length of the South Nahanni River, its tributaries, and most of its watershed will now be protected within the national parks system," Harper said at an event Wednesday. Harper visited Moose Pond, within the new park's boundaries, on Tuesday.

Harper said opportunities for resource development were carefully considered when setting the park's boundaries, which have been a source of contention since talk of the new park started in 2007.

The prime minister was asked about the differing views on the park's size and said he didn't want to get into a debate about it. "One of our objectives is ... to make sure we protect our environment, also allow for economic opportunity here," he said.

"I know this continues to be an item of discussion and park boundaries are reviewed from time to time," he added.

The park reserve is named after a mountain at the South Nahanni headwaters that has spiritual significance for local residents. There were various proposals for its boundaries and consultations with aboriginal leaders and elders, mining companies, paddling outfitting companies, nature and wildlife conservation groups and other stakeholders.

According to the land claim agreement with the Sahtu Dene and Métis, an impact and benefit plan was required before the park could be created. The agreement lays out the management relationship between Parks Canada and the communities of Norman Wells and Tulita and issues covered in it include hunting and fishing rights, economic opportunities and wildlife management.

Harper and the Sahtu Dene and Métis leaders signed off on the plan today, according to the prime minister's office.

The government said creating the park will help protect grizzly bears, mountain woodland caribou, mountain goats and other wildlife and offer opportunities for visitors to enjoy the wilderness.

But aside from wildlife protection, one factor that was taken into consideration when deciding the boundaries for the park reserve was access to minerals in the area. Mineral and energy resource assessments are done whenever the federal government proposes new national parks.

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A working group used the studies to come up with three options for boundaries for the Naats'ihch'oh park, according to the final consultation report on the Parks Canada website. The first scenario would have made the park 6,450 square kilometres, protected 94 per cent of the upper watershed of the South Nahanni River and left 20 per cent of the overall mineral potential outside of the park's boundaries.

Canada's newest national park reserve is located in the Northwest Territories. (Google Maps)

The third option, the one that appears to have been chosen, leaves 70 per cent of the overall mineral potential outside the park and available for mining companies to explore.

Concerns about mining activity in the area were expressed during the consultation process and there were calls for the third option to be left off the table because it didn't do enough to protect the land. Questions were raised about the degree to which mining interests were being accommodated and the impact of mining on the watershed and wildlife.

Representatives of the mining industry, on the other hand, said even the third option would limit access to areas with big potential for development. But of the three plans it was their preferred choice. They said mining could be carried out in environmentally sustainable ways and it would bring economic benefits to local residents.

While news of the park was generally welcomed, it still attracted some criticism.

The Canadian Parks and Wilderness Society issued a press release saying the boundary chosen by the government "falls far short" of what is needed to protect the Nahanni watershed and wildlife.

"With the interest in resource development in Canada's North at an all-time high, protecting important ecological and cultural lands like Nááts'ihch'oh is more important than ever to safeguard our lands and waters, and the wildlife and northern way of life they sustain," said Kris Brekke, executive director of the group's Northwest Territories chapter.

Stephen Kakfwi, former premier of the Northwest Territories is also disappointed with the way the boundary lines are drawn. He said in an interview that Harper is protecting the mining interests more than environmental interests.

"Unfortunately I think Prime Minister Harper has let down Canadians in his choice," he said. "That is not a national park, that is a joke." Kakfwi was premier from 2000 to 2003.

He said the local people were put in a corner because it was either the smaller protected area than they desired, or no protection at all.

The Liberals accused the Conservative government of acting hypocritically because the last budget made cuts at Parks Canada. The cuts to its annual $650 million budget will amount to $30 million by 2014-2015. Some Parks Canada sites may cut back on operating hours or take other measures to deal with the reduced budget.

Health Minister Leona Aglukkaq, the MP for Nunavut, Aboriginal Affairs and Northern Development Minister John Duncan, Environment Minister Peter Kent and Northwest Territories Premier Bob McLeod were on hand for the announcement, made in Norman Wells. Sahtu Dene and Métis elder Richard Hardy was also there.

The Naats'ihch'oh National Park Reserve is now Canada's 44th national park.