First Nation final agreements spur mining development, study finds

Modern treaties signed between 1991 and 2006 have increased incomes in First Nation communities and benefited mining development, according to a new report. The study, published last month by the C. D.

Modern treaties signed between 1991 and 2006 have increased incomes in First Nation communities and benefited mining development, according to a new report.

The study, published last month by the C. D. Howe Institute, analyzed the 11 final agreements in the Yukon, as well as a handful of treaties in B.C. and the Northwest Territories. It compared those First Nation communities with others that have not yet signed final agreements.

The results show that real average annual income has increased by 17 per cent more since 1991 for members of treaty First Nations than for members of non-treaty First Nations.

And the income of treaty First Nation citizens working in extractive industries has increased by 41 per cent more than that of non-treaty First Nation citizens in the same field.

Much of that income boost is the result of more mining agreements being signed by First Nations with treaties, the report found. In 2012, treaty First Nations had one mining agreement on average, while non-treaty First Nations had an average of just 0.2 agreements. The number of mining contracts has also increased more quickly for First Nations with final agreements.

Ben Dachis, a senior policy analyst with the C. D. Howe Institute, said treaties provide clarity around property rights, which enables more resource development.

“The key point is that clarification of property rights,” he said. “What these treaties do is they make it so much easier for resource companies to come in to these communities.”

The report suggests that mining contracts have ripple effects throughout the community. That would explain the observed 21 per cent income increase for people working in manufacturing and the 18 per cent income increase for trade workers in First Nations with final agreements.

Ken Coates, a professor of public policy at the University of Saskatchewan, said the results show that “the aspirations that a lot of northerners had (for the final agreements)… actually bore fruit.”

“One of the reasons for signing a treaty is to have greater economic opportunities,” he said.

But Coates cautioned that the positive results might be due in part to the recent resource boom that ended after 2011.

“In my experience, what happens is that aboriginal rights are not a barrier if the price is right and the demand is high,” he said. But he explained that when commodity prices are low, as they are today, resource companies are less likely to offer deals that First Nations find acceptable. If the resource sector had been in a slump since the 1990s, the economic benefits of treaties would probably be less clear.

“We have to be careful about attributing everything to a treaty when there’s other factors going on,” Coates said.

This latest report stands in contrast with one released by the Fraser Institute in September, which was much more critical of the economic effects of modern treaties. That study blamed recent court decisions about First Nations land claims in the Yukon for creating uncertainty and hurting investor confidence in the territory’s mining industry.

It listed several recent court cases, including the Peel watershed case, as examples of disputes that could have stayed out of the courts if First Nations and the government had stuck more closely to the terms laid out in final agreements.

But Coates said the two reports are not incompatible. He pointed out that the C. D. Howe study focused on the years up to 2012, while the Fraser Institute report focused on the last few years, after commodity prices started to slump.

“When the margins have all shrunk, then it’s much harder to reach a good deal with First Nations,” he said.

Still, he said, even while mineral prices rise and fall, this latest report shows that the treaties provide economic benefits. It can just take time for those effects to be measured.

“A lot of people expect when these things are done… that the results are going to be really fast,” he said. “That’s not how life works.”

Contact Maura Forrest at

maura.forrest@yukon-news.com

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