Mr. Mackey loses it, while Scott the Dick leads Ike to the Native Canadians.
On the one hand, the "Native Canadians" are rendered with slanted eyes, which is patently offensive. They're all wearing fur-lined parkas, which are apparently some kind of tribal uniform. (The non-Natives aren't wearing fur-lined parkas, so the clothing must not be necessary for the climate.) And they're not using anything more modern than a harpoon. No high-powered rifles, radios, or snowmobiles--nothing like that.
On the other hand, they're speaking some sort of Native language(s), not gibberish. The non-Natives' stupid comments are designed to make the non-Natives look bad. And the show is sensitive enough to label the Natives "Native Canadians" rather than "Eskimos" or something less pleasant.
The Native language(s)
I asked a friend if she knew what language the Natives were speaking. This led to the following discussion:
On the one hand, it's kind of lame that they didn't find two Inuktitut speakers. On the other, at least the "Native Canadians" weren't speaking gibberish. Stone and Parker probably did more than many producers would have.
The rest of the episode
Royal Pudding's plot involves the kidnapping of a "Canadian princess." The Inuit play a bigger role than the scene above indicates:
For more on South Park, see "Tardicaca Indians" in South Park and "Indians" in Cannibal! The Musical.