Accommodation agreements get around resource issue
Thursday, September 28, 2006
Some treaty talks between Ottawa, the province and B.C.'s first nations inch
toward fruition at a speed that couldn't catch a snail. Others just go
Meanwhile, the courts spell out aboriginal rights in an almost-as-slow
succession of narrow judgments that invite conflicting interpretations. They
settle the specific case, but nobody knows what the precedent means for
hosts of slightly different cases.
The resulting delays, uncertainties and frustrations have the potential to
hold up all kinds of development -- especially resource-based energy
developments -- for as far into the future as analysts are able to peer.
But they probably won't.
That's because there's a third way that works, says Andre Ledressay, an
economist with Kamloops-based Fiscal Realities, a consulting firm that
specializes in first nations issues. The trick is to focus on individual
accommodation agreements, he says.
The broader, slower rights-based approach flows from the 1997 Delgamuukw
court case and related judgments. They have made it clear that there's an
economic component to traditional land rights, though 10 years later the
details of what it might look like are just beginning to emerge.
Nevertheless, "A lot of lawyers are leaping at that," Ledressay says.
"They're saying, 'Let's go to court. Let's stop [any proposed development],
at least until we define the economic component.'
"That's the Haida approach, and it explains what's happening -- or what's
not happening -- with offshore oil."
On the other hand, "more and more bands are seeing energy as their way into
Generally, he says, existing accommodation agreements have both economic and
fiscal components -- they provide for jobs or investment opportunities while
also creating a revenue stream for the band through taxation or royalties.
In some cases, as with the Hupacasath of central Vancouver Island,
participation is direct. This band owns 72.5 per cent of a new run-of-river
hydro project -- a 6.5-megawatt generator built last year. Its members got
most of the construction jobs, and the band will get about $1.5 million a
year in continuing revenue.
In the northeastern oil and gas patch, bands have capitalized on energy very
differently. They've set up companies not to compete with the oil and gas
giants, but to provide them with services.
In other parts of B.C., first nations are involved in discussions that will
lead -- or not -- to new power projects, transmission lines, pipelines and
more. While such deals take time, they don't have to hold up projects.
Lyle Viereck, BC Hydro's director of aboriginal relations, notes such
projects face lots of hoops concerning environmental or economic impact. So
aboriginal negotiations are just one part of a process that moves
simultaneously on several fronts.
Viereck says his department spends a lot of time building relationships with
bands before they have a specific project to discuss. If trust can be
established in advance, it means a deal can be reached quickly.
Although this approach is becoming common, it's not certain. And it gets
more complex as more players get involved.
Thus something like installing a fifth generator at the 21-year-old
Revelstoke dam involves only two bands. But a new Vancouver Island
transmission lines means negotiations with 22.
Developers' bargaining power also varies from project to project. For
example, if a band refuses a specific run-of-river hydro project, there are
many other suitable sites and the proponent can pack up and go elsewhere.
Other projects -- for example, the proposed Site C hydro dam, the last place
suitable for a really big hydro project in B.C. -- can't be built anywhere
What would happen in such a multi-party project if most are on board, but
one or two hold out?
Viereck says the law is unclear. Recent case law obliges government to
consult with first nations before allowing or undertaking projects that
impact on the land, but it doesn't spell out how those consultations have to
Although the negotiation route is winning favour with B.C. bands, Greg
Richard, also with Fiscal Realities, says the process is hampered by
inconsistent government policies.
In particular, he worries about a federal proposal for an "own-source
revenue policy," which claws back transfers as bands get new tax bases or
royalties. Ottawa insists the concept be endorsed, but refuses to say how
much will be clawed back.
"So if a band was to do, say, a run-of-river hydro project, it won't know
how much money it can keep. It might even be none."
And the rights-based approach still has staunch supporters.
Will Horter, executive director of the Dogwood Initiative, a non-profit
dedicated to sustainable development, says the rights-based approach is held
back by a lack of common purpose and unanimity among bands.
"The government approach has been to convince individual first nations to
voluntarily agree to put down the sword" -- to avoid challenges in exchange
for something like a forestry agreement that offers a bit of money and a
guaranteed wood supply.
He'd rather see "one big issue like the Great Bear Rainforest to coalesce
all first nations." And he thinks it might be found in the Enbridge proposal
to build a pipeline from Alberta to Kitimat.
Matthew Akman, an analyst with CFIB World Markets, warned last summer the
Enbridge project could be delayed by the need to negotiate with the 42 first
Horter says that kind of risk has long been ignored by companies, and bands
should exploit it, using it to win long-lasting rights to revenue from the
"It's a boom and bust bubble. The window of opportunity, I believe, is just
five or 10 years. First nations have to act now."