Accommodation agreements get around resource issue

Don Cayo

Vancouver Sun

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

nowhere.

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

the economy."

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

else.

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

end.

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

nations.

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

land.

"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."

dcayo@png.canwest.com