Sharing our land

Canada’s mining history was in no small way shaped by native Canadians who led European settlers to sites where they mined native copper. They made the first discoveries in the Klondike, and were among the first to notice the potential of what is now the Hemlo gold camp of Ontario. Yet they benefited little from their finds or from deposits found by others on their traditional lands — a situation that has led to discontent and, in some cases, outright defiance. Little wonder that negotiations between native groups and resource developers have been complex at best, and hopeless at worst.

The recent election of Matthew Coon Come as national chief of the Assembly of First Nations (AFN) has triggered fears that confrontations will escalate as native groups seek increased benefits from resource projects. The fiery native leader defeated outgoing grand chief Phil Fontaine by promising a more confrontational approach to native rights. He also vowed to shame Canada into “sharing the wealth of natural resources on First Nations lands” by exerting international pressure through organizations such as the United Nations.

These fears may be misplaced for several reasons. Coon Come is a strong advocate of economic self-reliance for native groups and he understands business. After serving as grand chief at age 31, he helped launch several business ventures, including Cree Construction and Air Creebec. Moreover, his battle to secure increased benefits from resource development seems to be directed more at government than at the business community (or so we hope).

If that is the case, Coon Come won’t be battling alone. He has potential allies in the form of provincial, territorial and local governments (and their citizens), who also wish to secure a more equitable share of benefits from resource development. For proof, just ask people of the Northwest Territories if they are happy seeing the royalties from their diamond deposits flow to Ottawa. Or ask the people of Labrador how they feel watching the benefits of their power and iron ore resources flow everywhere but to local communities.

The Voisey’s Bay nickel project in Labrador might be in production today if more of the benefits of the mine and mill stayed home. Under the present arrangement, Ottawa is the main beneficiary, and until that changes, most people in the province will continue to support their premier’s position that not one tonne of ore shall leave the ground until downstream processing facilities are built. It may seem a foolhardy view to outsiders, but the badly burned locals don’t care. And they are not alone. We hear the same message in rural areas and northern communities all the time; Ottawa gets the gold and we get the shaft.

Ottawa’s response to all this discontent has been to point native groups and local communities toward the companies — deal with the developers, they say, not with us. In keeping with this approach, federal agencies have encouraged a myriad of stakeholders — native groups, environmental groups, non-government social organizations, etc. — to plead their cases in corporate offices.

To their credit, the companies have given these stakeholders a place at the negotiating table. They’ve consulted and negotiated in good faith, and they’ve made enlightened deals, unlike anything ever done before. Resource projects now routinely include impact-benefit agreements to ensure that jobs and benefits flow to those most affected by resource development. It’s been tough going — the negotiations haven’t been easy — but the progressive, co-operative approach has changed the view of many groups once opposed to development.

The downside of all this is that fewer and fewer projects are robust enough to carry such a heavy load. Mines that could have been developed two decades ago would be uneconomic today, given that 25% of the total capital costs are related to social and environmental obligations. Voisey’s Bay has already faltered under the load, and the promising Diavik project, near the Lac de Gras area of the Northwest Territories, almost suffered a similar fate.

Mining companies have worked with native and other groups in a spirit of good will for much of the past decade, forgoing profits in favour of peace. However, because of financial constraints, others have folded their tents and moved to more welcoming jurisdictions. Some companies say they can no longer afford to do business here because costs are too high and permitting is too complex and time-consuming.

It’s Ottawa’s turn to give up its colonial attitudes and share some of the resource-generated revenues now swelling its coffers. If mining companies and banks can change, why can’t a government?