Northern Ontario First Nation leaders are pushing the pace with Queen's Park to accelerate talks on natural resources revenue sharing.
In late June, the leadership of the Nishnawbe Aski Nation (NAN), a political body of 49 Aboriginal communities, demanded $127 million in compensation from the Ontario government as a down payment for a century of natural resources wealth extracted from their traditional lands in northwestern Ontario and the Far North.
It was considered an annuity on a larger $32 billion sum based on a research study commissioned with York University's Schulich School of Business.
The day before he was elected Ontario chief on June 27, NAN Grand Chief Stan Beardy held a Toronto press conference calling it a “historical swindle” that treaty promises with the Crown were broken on revenue sharing, and no compensation has ever been offered.
Beardy warned these debts have to be settled before any development partnerships in high-profile explorations camps like the Ring of Fire in the James Bay lowlands can move forward.
Deputy Grand Chief Les Louttit said with the Ring of Fire chromite deposits moving toward more advanced stages of development, the chiefs have to make a stand.
“We can talk consultation all we want, but until we sit down at the table, it's really meaningless as long as industry can proceed with licences and permits.”
With resentment surging in the northwest over Cliffs Natural Resources siting a ferrochrome smelter in Sudbury to process Ring of Fire ore, Ontario is extending an olive branch to First Nations with a renewed commitment to revenue sharing talks.
Louttit has heard this before.
In April 2009, Ontario pledged $30 million as an opener to start talks on revenue sharing, but Louttit said with no follow-up discussions, it wasn't regarded as a serious offer.
Louttit said on projects like the DeBeers Victor diamond mine in Attawapiskat, their research shows First Nations receive less than two per cent of net revenues, while Queen's Park takes between six and 14 per cent of gross revenues over the mine's 17-year life.
What's more, Louttit said it was left up to DeBeers to negotiate impact benefit agreements with each First Nation community on the James Bay coast.
“We want to reverse that,” said Louttit, who wants to see First Nations garner 50 per cent of gross revenues, “as a starting point.”
With six disgruntled chiefs prepared to evict mining companies in the Ring of Fire this summer, Louttit said meaningful engagement is the best way to avoid conflict.
Dr. Fred Lazar, a York University economist, said the Ontario government has made little headway in developing a revenue sharing policy and the strategy has been to delay as long as possible.
“With the Ring of Fire potential, Ontario realizes that they must do something, and they have offered a pittance thus far.”
Lazar poured through government documents, like the Public Accounts of Ontario, to produce a report for the chiefs based on the value of 100 years worth of mining, forestry, fishing and trapping on NAN territory.
After examining the Victor and Musselwhite Mine agreements, Lazar said First Nations have received only a “small fraction of what they should have demanded and received.”
He would like to see NAN take an active role in negotiating royalties, taxes and licence rates with government to get a proper share of revenues.
Louttit agrees that will be a priority after their next election because of the impending Ring of Fire developments.
But Vancouver lawyer Thomas Isaac said the Ontario government should proceed cautiously in pursuing resource revenue sharing.
“Unfortunately, that’s where government leadership often fails,” laughed Isaac, a partner with McCarthy Tetrault, who advises mining industry clients on Aboriginal legal matters.
British Columbia was the first province to introduce resource revenue sharing on mining projects in 2010, as a cornerstone of its New Relationship document on Aboriginal policy.
Isaac said the B.C. system allows up to 37.5 per cent of revenue from the province's mineral tax to be shared with First Nations. How that sliding scale works, and what is the province's true intent, is a public policy head-scratcher, he said.
“What is the game plan? In Ontario, this isn’t about kicking out another policy, but does it have another end point in mind? Is it affordable? Is it sustainable over the long term? What are the objectives of the policy? Why are they putting out the policy in the first place?
“These are fundamental questions that require a response before you start fiddling around with something as significant as this, because this genie does not go back in the bottle once you open it.”Isaac said since there's no case law requiring governments to share resource revenues, B.C.'s modus operandi appears to be to avoid conflict.
“If it’s essentially to buy peace in the valley at any price, then that would legitimize anything.”
Isaac said if the government’s premise is to provide a better quality of life for Aboriginals, than what is the right amount?
“If you give a First Nation of 300 people a cheque for $20 million a year for two decades, how is that an incentive?”Isaac argues that giving direct contributions to band members can create a scenario that exists with the Samson Cree in Hobbema, Alta., an extremely wealthy, but crime-riddled community, that's dependent on oil revenues.
Isaac doesn’t begrudge First Nations for pursuing whatever remedies areavailable, but government policy toward revenue sharing can’t be a political quick-fix.
“Unfortunately Aboriginal issues lend themselves to election-cyclethinking and Band-Aid solutions.
This is the one area they shouldn’tbe doing that.”
.jpeg;w=120;h=80;mode=crop)
