Budget promise to pay for negotiations could help Indigenous treaty process, but at a hefty cost

Maura Forrest
Maura Forrest

The budget doesn’t put a pricetag on the commitment, or on one to consider forgiving negotiation loans, but reports suggest it could cost hundreds of millions of dollars

After years of arguing that it’s unfair to make First Nations pay to negotiate rights to land that was originally theirs, Indigenous groups and treaty lawyers are applauding the federal government’s decision to start footing the bill for Indigenous participation in treaty negotiations.

It’s a commitment made in Tuesday’s federal budget, but one delivered without a price tag attached — as was also the case with an accompanying promise the government would consider forgiving past and present loans that have helped First Nations cover the costs of negotiations. Previous reports suggest those changes could cost the government hundreds of millions of dollars.

Since the beginning of modern treaty negotiations in 1973, the federal government has signed 26 comprehensive land claims with Indigenous groups, mainly in northern Canada, British Columbia and Quebec. About 100 land claim and self-government negotiations are ongoing.

In the budget Finance Minister Bill Morneau tabled Tuesday, the government committed to scrapping the existing system of issuing loans to Indigenous groups to help them participate in treaty negotiations. Instead, Ottawa will now cover their costs outright. The budget did not indicate how much this is expected to cost, but a 2013 government audit found the average loan for each active land claim was about $10 million.

Cheryl Casimer, a member of the political executive of B.C.’s First Nations Summit, said the commitment will have a “huge impact” on First Nations that sometimes spend decades at the negotiating table.

“We’ve always come to the table saying that we need to address this, saying that First Nations should not have to borrow money … to negotiate land back that is rightfully theirs,” she said.

Casimer said her First Nation, the Ktunaxa Nation, has been negotiating for 20 years and is facing loans of about $20 million. She said the loan system was designed when everyone expected treaties might take a couple of years to finalize. “Little did anybody know that it was going to take decades,” she said.

As it stands, Casimer said, ballooning debt makes it hard for First Nations to move forward with any economic development initiatives.

Nancy Kleer, a Toronto-based legal counsel for treaty negotiations, said the decision is an “excellent step forward,” but added that the government must now also forgive existing loans.

“If it’s going to happen for the First Nations going forward, it should certainly happen for the Indigenous groups going back as well,” she said.

Budget 2018 doesn’t make a firm commitment to reimburse paid-off loans or to forgive those outstanding, but it does say the government will “engage” with Indigenous groups on the issue. It gives no indication of how much that might cost but, to date, Ottawa has issued hundreds of millions of dollars in treaty negotiation loans.

Under the current approach, loan indebtedness has become a barrier both to concluding treaties and exiting from the process

 The 2013 audit found there was about $817 million in outstanding loans for ongoing and settled claims, including $70 million in the process of being repaid by seven First Nations that had concluded treaties.

The audit also found that 15 Indigenous groups with settled claims had fully repaid their loans, though it’s unclear how much money that represents. In 2015, a report prepared for the federal government by special adviser Doug Eyford found that nearly $366 million in loans had been provided to 24 of the 26 Indigenous groups that have settled land claims to date.

The numbers have likely increased since the 2013 audit. That report found that $466 million in loans had gone to treaty negotiations in British Columbia. But the B.C. Treaty Commission, which allocates treaty funding from the federal and provincial governments in that province, reported in 2017 that it had distributed $551 million in loans since 1993, of which $537 million was outstanding, excluding interest.

Mounting debt from prolonged treaty negotiations has long been identified as a growing problem.

“Under the current approach, loan indebtedness has become a barrier both to concluding treaties and exiting from the process,” the 2015 Eyfort report reads. “Some Aboriginal groups are no longer in active negotiations but have not formally withdrawn from the process because of concerns that Canada will seek repayment of their loans.”

The report also found that some Indigenous groups “are clear that they do not intend to repay their loans.”

Gary Yabsley, a Victoria-based lawyer who has worked on several B.C. treaty negotiations, said the prospect of millions of dollars of debt can turn people against treaty-making in some First Nations communities.

“It makes for a tough sell,” he said. Beyond that, he said, loans create “a power imbalance that nobody in any negotiations likes to have to face.”

Yabsley suggested the new system could help get treaties signed faster, with less opposition. “I think it’s a question of cost-benefit analysis,” he said. “If in fact this facilitates more treaties, and more treaties create a better social and economic environment for First Nations … then I think the cost may be minimal.”

But Robert Freedman, another B.C.-based treaty negotiator, said he’s concerned that if the government takes on the extra cost, it might be inclined to take shortcuts.

“My concern is … if the government now knows they’re directly on the hook, are they going to say, ‘Well, it only should cost this much,’” he said.

The budget commitment comes following Prime Minister Justin Trudeau’s announcement weeks ago of a new Indigenous rights framework. Among other things, the framework is intended to help Indigenous peoples move toward self-determination and avoid lengthy court battles.

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