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TABLE OF CONTENTS Jun 30 - Jul 6, 2014 Volume 100 Number 20 - 0 comments

Commentary: Northern Gateway - forcing BC to face land claims question

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By: Gwen Preston

VANCOUVER — It’s a fight over oil, not metals or coal, but mineral explorers and developers across B.C. — indeed, across Canada — will watch closely to see how Enbridge fares in the battle to build the now-approved Northern Gateway pipeline.

Opposition to the project is daunting. It is also perplexing in some ways, because Northern Gateway is not novel. There are already 250,000 km of oil and gas pipelines criss-crossing Canada, some 40,000 km of which are in B.C. The country’s oil pipes transport more than 3 million barrels of crude every day, including diluted bitumen, which Canadian operators have transported for 30 years.

But that logic withers in the glare of First Nations opposition. Because while this may be a fight over a 1,177 km long pipeline to move bitumen from the oilsands to the West Coast across northern B.C., it’s a bigger battle to define what rights First Nations have in controlling the lands they consider theirs.

B.C. is home to one-third of Canada’s recognized First Nations. Most haven’t signed any kind of treaty with government concerning their lands. The result is a complicated and ill-defined mess of claims. It is a complex place to attempt any kind of major commercial venture, let alone one that would touch some 40 First Nations, as it spans the province.

The Northern Gateway fight often focuses on what the pipeline would carry, and bitumen’s bad reputation does not ease the effort for Enbridge. But perhaps the biggest issue is the failure of a resource-rich province to define First Nations land rights.

Northern Gateway showed up just when other resource-development fights — such as those over fracking for natural gas, or developing Taseko Mines’ New Prosperity copper–gold project — have highlighted the irrefutable need to settle this question.

Now a particular project is demanding progress on this social stalemate. Northern Gateway has become B.C.’s landmark land rights case, and how it plays out will affect resource development in the province for many years.

First Nations along the proposed pipeline route are demanding an appropriate level of consultation, substantial participation in planning and execution, and a fair return in exchange for the risk that would run across their lands.

These demands are not legally binding at present. The only legal obligation developers have to First Nations is a “duty to consult and accommodate,” as per the Supreme Court of Canada. But that requirement has not been defined, and views on what makes consultation and accommodation “sufficient” vary widely.

Regardless, most First Nations believe they hold the power to decide whether projects are allowed on their lands. And while they do not have formal legal backing, practically speaking, they are right.

A project like Northern Gateway cannot happen in the face of adamant First Nations opposition. From legal challenges to physical blockades, Aboriginals can stop the pipeline in its tracks. And because Northern Gateway has become the most prominent symbol of First Nations’ land rights in B.C., they have added incentive to stymie the project until they have achieved sufficient control over how such decisions are made.

There are at least two ways this fight can end. One is a continuation of what happened on June 17, when the federal government approved the project pending Enbridge’s compliance with the joint-review panel’s 209 conditions; the second is sustained Aboriginal opposition, supported by environmentalists and other sympathizers.

With First Nations and developers such as Enbridge on opposite sides of the table, this plotline moves resource development in B.C. from challenging to near impossible, a hardening-of-stances that would see Canada continue to lose ground in comparative global resource potential. What good are resources if a lack of defined land rights means no one can get them out of the ground?

The other option is the development of a novel approach, one that sees First Nations, Enbridge, and various levels of  government work together to form a plan that satisfies all. It would likely involve opportunities for Aboriginal equity, training, and jobs, a role for First Nations in environmental response systems, monitoring and remediation, and long-term revenue sharing with First Nations for the right to send oil across their lands.

It would be groundbreaking, but the trail blazed would provide a path for others to follow. Enbridge is far from the first resource company to clash with First Nations in B.C. over land rights. A litany of similar public battles, such as New Prosperity and Northgate’s failed attempt to build Kemess Northagainst Aboriginal wishes, are making explorers shy away from the province.

While reduced exploration and development may please environmentalists, the provincial and federal  government are hamperedewhen resource revenues shrink. Timber, metals and energy are national breadwinners that help fund Canadians’ enviable living standards.

It is not just Alberta that benefits from the oilsands. Manufacturers in Ontario and Quebec supply oilsand operators with all kinds of equipment. Researchers across the country are developing more economic and environmental ways to extract oil from the sands. And the revenues that flow to the federal government to support social programs, education, health care, infrastructure, policing, parks and much more.

But oil revenues are dependent on pipelines bringing crude to customers. At the moment the U.S. is the only foreign customer buying oilsands crude. That means bitumen gets discounted against other crudes, limiting the economic benefit Canada gleans from its oil. In addition the U.S. is producing more oil domestically every day, reducing its need for Canadian crude.

Figuring out how to include all affected parties in the planning, execution and benefits of resource work is the only way this economic driver can support the country.

This would require some new perspectives. For example, Enbridge would need to seriously sweeten its offer. The company has offered First Nations, collectively, a 10% stake in Northern Gateway. The stake should generate $280 million over the next 30 years, which sounds good until you divide that among the 40-plus communities along the route, each of which would get just $230,000 a year.

The jobs pledge is no better. Enbridge has promised 15% of the project’s construction jobs to First Nations. At the peak of construction that’s about 450 jobs, but the build will only last three years. Once built, the pipeline requires far fewer people for maintenance, so even if Aboriginals get 15% of those positions, that means a whopping 84 long-term jobs.

Those kinds of numbers are just not enough to convince vehement opponents. More will be needed. And more might be forthcoming, if past development battles are any guide.

Researcher Martha Hall Findlay, who served as a member of parliament from 2008 to 2011, and is now an executive fellow at the School of Public Policy at the University of Calgary, took an historical point of view in an op-ed piece in the Globe and Mail.

“Other major nation-building projects in Canada’s history were plenty controversial in their time,” Findlay wrote. “The CPR, the St. Lawrence Seaway, the TransCanada Pipeline, Churchill Falls, and the James Bay project each had its risks, its detractors and hurdles to overcome.

“Every nation-building project in Canada has required negotiation, balance and compromise: Northern Gateway is no exception. You don’t build a nation by saying ‘no.’  You need to ask: ‘How?’”

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Construction of the Enbridge Waupisoo pipeline in Northeastern Alberta in 2009. Credit: Enbridge
Construction of the Enbridge Waupisoo pipeline in North...

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