When the Tahltan agreed in a 2011 referendum to support the Northwest Transmission Line that now runs north from Terrace, they knew their lives would change forever.

The 344-kilometre power line would open up a vast, relatively untouched region of northwestern B.C. to hydroelectric projects and large-scale mines.

A century before, in 1910, the Tahltan had declared they were the sovereign owners of a vast area three times the size of Vancouver Island. And although they are vehement about protecting the region they call the “sacred headwaters” — the beginnings of the salmon-rich Skeena, Stikine and Nass rivers — they are now also keen to be active participants in the provincial economy.

“Government and industry understand that the First Nations people need to benefit when these things are built,” says Tahltan Central Council president Chad Day. “But with the Tahltan, it actually makes a lot of business sense to partner with us because we have the capacity, we have the work ethic, we have the experience.”

The Tahltan now share in the wealth created by economic development through revenue-sharing and benefit agreements with the B.C. government, as well as companies such as Calgary-based AltaGas on three hydroelectric projects and Vancouver-based Imperial Metals on the Red Chris gold and copper mine.

Their experience exemplifies a larger story sweeping British Columbia.

It is often an untold story, one hidden behind the headlines about First Nations opposition to Enbridge’s Northern Gateway oil pipeline in northern B.C., or Taseko’s New Prosperity gold and copper mine in the central Interior.

And it shows that despite a failed treaty-making process — only five treaties have been completed in the past three decades — First Nations are choosing to participate, and wield increasing influence, in the B.C. economy.

As recently as 20 years ago, there were only a handful of industry agreements being signed in the salmon-farming sector, or for minor mining and forestry projects. But a landslide of revenue-sharing and benefit deals with government, Crown corporations and companies have been reached in the past decade, in resource-rich areas of the province as well as in urban areas such as the Lower Mainland.

Progress came rapidly following the B.C. Liberal government’s philosophical change of heart in 2005 — one year after a landmark Haida Nation court victory on a consult-and-accommodate case. That led to calls for a “new relationship” with First Nations, and marked the beginning of the province sharing resource revenues with First Nations, the first province to do so in Canada.

The number of these agreements — which already total in the hundreds — is expected to grow significantly. And the value of these deals with the province and industry — some are still prospective, as with the nascent liquefied natural gas export sector — amounts to billions of dollars.

A database of more than 300 agreements compiled by The Vancouver Sun — with a total value of more than $6 billion, including cash already paid out and future revenues over the life of the deals — shows how widespread and diverse they are. And it is likely that this dollar amount is nowhere near the actual total since companies and First Nations typically keep financial details of their agreements confidential.

Even looking at individual deals, the amount of money is substantial. In the Northern Interior, the McLeod Lake Indian Band is expected to claim royalties of between $35 million and $40 million over the 15-year life of Thompson Creek Metal’s Mount Milligan gold and copper mine. The Nak’azdli will share an additional $24 million in royalties from the mine.

In the Lower Mainland, the Musqueam, Squamish and Tsleil-Waututh last year negotiated a 50-per-cent stake in a federal land deal that includes the Jericho military lands valued at $300 million. Once developed, estimates peg the Jericho real estate at $3 billion.

And the Tahltan expect to receive $2.36 billion in benefits during the next 60 years from the three AltaGas run-of-river projects for agreements covering revenue-sharing from the province and company, contracts, ownership and upfront payments. Community members have been told another $78 million could flow from the Red Chris mine.

Greg McDade, a Vancouver lawyer who negotiates deals on behalf of First Nations in areas such as mining, pipelines and LNG, says the growing financial might of B.C. First Nations is a big, “untold” story.

“The kinds of numbers we’re talking about in these negotiations are big, a whole order of magnitude different than we were talking about even five years ago,” he told The Sun.

This new-found economic power has significant implications for First Nations that hope to reduce unemployment, boost training and education, increase decision-making control over land and resources, and create wealth for their communities.

Former Tsawwassen chief Kim Baird calls it a seismic shift — managing wealth instead of managing poverty.

It means new revenues into community coffers, which have traditionally relied on government handouts.

For the Squamish First Nation — which has a foot in both urban and resource-rich areas — a growing portion of their $67.1 million in revenues in 2014 originates with their own enterprises and partnerships.

Chief Ian Campbell hopes to see that figure grow to $200 million over the next decade.

The Squamish are looking to expand development on reserve lands, and are conducting an environmental assessment for Woodfibre LNG, a project that could bring the band long-term revenues of $100 million.

Campbell said he supports the creation of a corporate arm that would follow the goals of an elected council but could make independent investment decisions. “We’re at a critical point in our development, creating more of a separation of the business and politics,” he said.

All this progress was only made possible because of a mounting number of court victories in favour of First Nations and against the provincial and federal governments.

The latest historic ruling came a year ago and granted the Xeni Gwet’in of the Nemiah Valley — a Tsilqot’in Nation — title to 1,750 square kilometres of its traditional territory in the Interior. The court win was a first in Canada, and pushed the obligations of government for consultation and accommodation of First Nations to a higher threshold.

The architect of that game-changing lawsuit, Xeni Gwet’in chief Roger William, looks at even more recent developments, including a recent $1.15-billion LNG offer by Pacific NorthWest LNG to the Lax Kw’alaams: “Things are changing. Before our title win, I don’t think that kind of offer would be on the table.”

What is clear is that a company’s best chance for success is to first reach agreements with natives before going to the province with a project proposal.

“If you don’t get consent, and you get challenged in court, the chances are you’re going to lose,” William said.

And it is clear that First Nations will continue to reserve the right to say no to some resource developments — as the Tahltan did when they successfully fought plans by Shell to extract coal-bed methane gas in an area they considered sacred, or their recent opposition to Fortune Minerals’ proposed coal mine.

Despite the significant long-term value in these deals, resistance can be firm, as was shown earlier this month when Lax Kw’alaams First Nation members voted against the $1.15-billion LNG offer due to environmental concerns.

There are critics of the growing influence of First Nations.

Former Port Edward town councillor and trucking company owner Murray Kristoff believes the province is creating unrealistic expectations among First Nations, and worries about their power to stall or veto development projects.

He is angry that the Lax Kw’alaams rejection of the LNG package could have a significant negative effect on a project that would have brought significant benefits to Port Edward.

“When I cast my vote ... for (Premier) Christy Clark, I didn’t vote for the Lax Kw’alaams government. They weren’t on the ballot. How come they are calling the shots?” Kristoff asks.

Still, for every project being held up by First Nations opposition, there are many more examples of successful partnerships.

Business Council of B.C. executive vice-president Jock Finlayson says his organization is nervous about growing aboriginal expectations and whether the cost of reaching agreements could make some projects financially unfeasible, but generally the council supports more involvement by natives in the economy through revenue-sharing and impact-benefit deals, and sees the relationship with First Nations improving.

“I think there are ways over time where we can potentially move to make this a bit of a competitive advantage for B.C.,” said Finlayson. “I am struck that we are getting more done here jointly with First Nations in more of a ‘kind-of partnership’ fashion than has been typically seen in other parts of the country where they have treaties.” (B.C. is unique among Canadian provinces because few historic treaties were signed with First Nations.)

As the B.C. government’s court losses mounted, Victoria has tried to track a path that will not halt economic development. While stating that First Nations do not have a de facto veto on development, the province says it views revenue-sharing as a way to unleash economic potential and has been encouraging that approach to deal-making.

The Supreme Court in the Tsilqot’in case noted that once aboriginal title is established, the Constitution permits incursions on it only for a “compelling and substantial public purpose” consistent with the Crown’s fiduciary duty to aboriginals.

A PricewaterhouseCoopers report from 2009 estimated settling treaties with First Nations — and reducing uncertainty on the land base, a similar role played by revenue revenue-sharing and urban land settlements — would boost the economy by more than $10 billion.

“I guess, if push came to shove, the province could still move a project forward (despite First Nations opposition). But it’s obviously much better if we could do this by working with the First Nations,” says John Rustad, B.C.’s Minister of Aboriginal Relations and Reconciliation.

The province has shared more than $450 million in revenues with First Nations since 2003, according to government figures. These payouts are increasing each year, but at about $60 million last year, the First Nation take amounts to about 0.1 per cent of the province’s $45 billion in annual revenues.

“It’s a small investment that can make a real difference for First Nations, get them engaged in the economy, and change some of those socio-economic numbers. But at the same time, it can make a huge difference in economic growth and activity in British Columbia,” said Rustad.

Companies and Crown corporations that do business in B.C. say there is little doubt having to consult and reach agreements with First Nations for projects on their traditional territories adds a level of complexity to doing business.

Former provincial Environment Minister Barry Penner, who now practices private law and consulting, advises foreign businesses interested in investing in B.C. on how to deal with aboriginals.

He said it is an issue that international companies don’t encounter in most other countries, noting he has attended seminars in Japan where aboriginal issues in B.C. are the top concern.

“It’s something new that they must come to grips with. And it’s an added cost in terms of time and money. That’s just the truth,” said Penner.

However, reaching impact-benefit agreements with First Nations can also prove beneficial, particularly when companies establish deals with First Nations and can then present a unified voice to regulators on major projects.

And while it is challenging, industry representatives do not see it as an impediment to economic development.

“Sure, it can be a complex environment to operate in, but it’s just our reality in B.C.,” says BC Hydro president Jessica McDonald.

However, McDonald, who was deputy to then-premier Gordon Campbell when he introduced the “new relationship” concept, says conversations with First Nations are never just about economic opportunities. “It’s about mutual understanding and respect of their unique interests and concerns, and ensuring we truly understand those,” she said.

Developing those relationships takes time.

AltaGas spent years laying the groundwork for its agreements with the Tahltan, including participating in meetings not only in Tahltan territory in remote northwestern B.C., but in other places Tahltan members live, including the Yukon.

Dan Woznow, AltaGas vice-president of energy exports, says that for projects in remote areas, working with First Nations can bring positive returns.

AltaGas was able use contractors and workers from the Tahltan — who created a development corporation 30 years ago — to build the three run-of-river projects. As much as 30 per cent of the labour and equipment on their Forest Kerr project was sourced from the Tahltan.

Woznow said it is also important to remember there are unique burdens on First Nations — multiple projects they must vet and a level of community engagement and meetings not typical in non-native communities.

And the negotiations are getting sophisticated, added Woznow.

“Now, you are not sitting across the table from a chief all the time. They could have (accounting/consulting firm) KPMG and others in the room as well,” he said.

Independent power projects, such as run-of-river, have been at the forefront of benefit agreements with First Nations. In 2013, Clean Energy BC reported there were 202 native bands involved in 116 projects across the province producing 2,381 megawatts of electricity. A survey of just 21 of those projects projected revenues of $350 million to First Nations for the life of the agreements.

“The good developers ... know it’s the cost of doing business in B.C. and they’d better factor it in,” says Clean Energy BC executive director Paul Kariya. “If they can’t make it work, then they’re not here.”

The B.C. government has signed revenue-sharing agreements with 20 First Nations covering 13 of 18 operating mines in the province. Companies such as Thompson Creek Metals, NewGold and Teck have also signed benefit agreements with First Nations. Companies with prospective projects are also prioritizing deals with First Nations, including Seabridge with the Nisga’a for the proposed $5.4-billion KSM gold-copper mine.

Often the financial arrangements of these deals are not disclosed, but, for example, it’s estimated that NewGold’s agreements with the Skeetchestn and Stk’emlupsemc First Nations will provide $30 million over the life of the New Afton mine in the Interior.

“It’s a meaningful, genuine intent and effort and commitment to doing business in a different way,” says Karina Brino, president of the Mining Association of B.C.

The breadth of agreements catalogued by The Sun in its database is diverse. In the Southern Interior, the Ktunaxa Nation holds timber rights, shares in revenues from coal mines and has a partnership with the St. Eugene Golf, Resort and Casino.

On Vancouver Island, Vancouver-based Polaris Materials Corp. has an impact-and-benefit agreement with the Kwakiutl First Nation for the Orca Quarry. About half of the quarry’s employees are First Nations.

Also on Vancouver Island, the We Wai Kai Nation has an agreement with Marine Harvest ASA over fish farms in its traditional territory that requires environmentally sustainable practices, and provides economic and investment opportunities.

The B.C. Salmon Farmers Association notes its members have signed agreements with 19 First Nations. About 30 per cent of salmon farm workers in the province are First Nations.

The group points to an agreement signed between Marine Harvest and the Kitasoo at Klemtu 17 years ago — which they believe to be one of the first industry-First Nation impact-benefit deals.

“The companies, they were one of the first to really embrace it and recognize this is how things are going to get done in B.C.,” says Jeremy Dunn, the association’s executive director.

ghoekstra@vancouversun.com

lpynn@vancouversun.com



