Revenue Sharing is Only Fair, but Not All First Nations are Treated Fairly – by David Hill

David Hill is director and senior advisor of GMG Consulting Services. Reach him at david@gmgconsulting.ca. He has over 18 years of experience as a manager, senior policy advisor, project manager, program developer, communications coordinator and issues management advisor to the provincial government, Aboriginal communities and organizations, and private sector clients across British Columbia. He is a highly skilled and experienced facilitator, trainer, supervisor, planner, public speaker and writer and has professional training in project management and public speaking.

In addition to his direct experience with Aboriginal communities, Hill has also worked as a senior advisor and manager for Aboriginal relations for the BC Ministry of Energy, Mines and Petroleum Resources, during which time he facilitated engagement between Aboriginal communities and the mining and petroleum development industries, and negotiated consultation, accommodation and benefit sharing agreements between Aboriginal communities and the provincial government.

Commentary

British Columbia’s first agreements to share mining revenue with three First Nations are being hailed as “game changers” and “the new standard for participation.”

These are indeed important agreements to be celebrated, and the leaders of the Stk’emlupsemc and Tk’emlups First Nations and the McLeod Lake Indian Band who negotiated the Economic Development Agreements should be commended for their efforts and the benefits they are bringing to their communities.  First Nations communities and their members deserve to benefit from an industry that generates more than $300 million a year in tax revenues and royalties in British Columbia.

However, the agreements touted by the Government as “historic”, should not necessarily represent the new standard.

In fact, there is a serious flaw in the system.

Bands Rewarded for Supporting Projects

Bands who don’t support a project, or who don’t have the resources required to negotiate an agreement, run the risk of being denied a share of the economic benefits of projects operating in their territories, while Bands who support projects are rewarded with lucrative agreements.

Last week’s announcements provide a case in point.

The McLeod Lake Indian Band will be getting a share of provincial revenues generated by Terrane Metals’ Mt. Milligan mine project, which lies just inside the western boundary of the Band’s recognized consultation territory.  Although they have raised concerns, McLeod Lake has generally supported the project.  Not surprising, as many of the Band’s members hard hit by slowdowns in the lumber industry stand to benefit through employment and contracting opportunities as the mine is built.

However, the Nak’azdli Nation is not party to a revenue sharing agreement, even though they too will be impacted significantly by the project.  Why is this?  Perhaps because the Nak’azdli leadership is not supportive of the Mt. Milligan project, citing concerns over negative environmental, social, health and cultural impacts.  Further, although the company estimates that the project will employ 600 people during construction, and create 300 permanent positions during operations, a 2009 socio-economic impacts and opportunities review showed that in reality fewer than 10 Nak’azdli members will have the experience and education required to even apply for the majority of project’s jobs.

Clearly there is the potential for the Province to employ a double-standard whereby First Nations who support projects are invited to negotiate revenue-sharing agreements, while those who oppose or voice concerns of a project’s impacts are left out of the talks.

Worse still, there is a danger that revenue sharing agreements could become the Province’s sole negotiating carrot, rather than focusing on constructive and proactive engagement.  This sort of negotiating magic bullet could seem very appealing to members of the government’s overburdened and under-resourced public sector.

And in an absolute worst-case scenario, these agreements can be used to drive a wedge in public opinion, fanning the flames that First Nations are out to extort money by delaying or opposing projects.  This appeared to be the case last month, when BC’s Minister of Energy and Mines suggested he would publicly disclose the value of a revenue agreement that would have been available to the Tsilhqot’in National Government had they supported the Prosperity Mine.

Sharing Revenue Fairly Can Help Build Positive Relationships

To be absolutely clear, the revenue sharing agreements announced in August are important and the First Nations deserve the recognition and revenue these agreements will bring.  But as I’ve said before, money typically is not the primary objective for First Nations concerned about negative impacts of development in the territories that have sustained them for generations.  Factors such as cultural sustainability, social fabric, health, access to traditional foods and medicines, safety and education will almost always be of greater concern than money.

Unfortunately, most of Canada’s First Nations communities are in desperate need of funding and economic opportunities, and turning down a revenue sharing agreement may appear too great a risk – economically, politically or socially – for many community leaders.

There’s something unfair about this.

If the Province is serious about sharing the economic benefits of mining and other resource development with First Nations, then it should do so in a way that is fair to all First Nations. Here are some high level approaches that should be part of the process:

1.The province should seek to negotiate revenue sharing agreements with all impacted First Nations, not just those who express support for a project;
2.The revenue sharing formula should be based on the level of impacts on the First Nation members, with the greatest possible level of participation of the First Nations members;
3.Social and cultural impacts should be considered along with environmental, health and economic impacts, and should be determined – as much as possible – by the First Nations themselves.

Sharing tax revenue has no negative impact on companies, and in fact can go a long way towards improving relations and negotiations between the Provincial and First Nations governments, creating greater harmony and building strong and sustainable communities.

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