Share the wealth

Commentary

A recently published discussion paper has convinced the Prospectors and Developers Association of Canada board of directors to approve the principle of federal and provincial governments sharing natural resource revenues with aboriginal communities.

The paper urges the industry to work in partnership with aboriginal communities and to champion the idea. It also recommends that the mining industry work with other industries in the resource sector, in particular establishing a roundtable to develop policies and share good practices.

Government sharing of natural resource revenues has won the support of Phil Fontaine, national chief of the Assembly of First Nations.

“A recent discussion paper put out by the Prospectors and Developers Association of Canada addressed the benefits of resource-sharing with First Nations. They say, ‘sharing of the public revenues would increase the political stability and economic predictability that support long-term investment.’ That sounds like a win-win to me. . . and it comes from the corporate community,” Fontaine told a group of business leaders at the Economic Club of Toronto earlier this year. Fontaine added: “The PDAC-commissioned paper outlines the challenges facing the exploration and development sectors of the mineral industry and suggests strategies for addressing them.”

For a long time, the paper says, aboriginal leaders across Canada have been seeking a fairer share of the total economic rent derived from their traditional lands. They are increasingly reluctant to enter into agreements for further development until this issue is meaningfully addressed.

To date, governments have taken a back seat, letting industry and aboriginal groups work out the distribution of economic benefits and showing reluctance to share their allotment of the rent with other jurisdictions or parties.

The paper says that this is untenable from the aboriginals’ point of view since their primary relationship is with the Crown and, for the most part, they are financially dependent on that relationship.

Unfortunately, private interests find themselves caught in the middle. Explorers and developers have a particular challenge. They are in the vanguard of those accessing Crown lands within traditional territories, but cannot make promises and the economic benefits are relatively limited prior to mineral deposits being proven or projects brought into production.

The paper notes that it is essential that the exploration sector find some accommodation on government revenue-sharing and that it take the lead in aligning its interests with those of the aboriginal community.

The paper explores the underlying principles of government sharing of natural resource revenues and surveys experiences and models from Canada and around the world. It reveals that there is a “significant chasm” between what governments are prepared to put on the table and what the aboriginal community expects from revenue-sharing. It also found that revenue-sharing with aboriginal groups in Canada has been conducted on an ad hoc basis. With overlapping jurisdictions between Ottawa (treaties) and the provinces (ownership of Crown lands), it has been suggested that the federal government, in consultation with provincial governments and industry, establish federal-provincial aboriginal processes to develop a consensus around principles and guidelines.

It is hoped, the paper adds, that this will lead to a more harmonized and transparent framework in each jurisdiction. It also warns that government revenue-sharing cannot be looked at in isolation from self-government, comprehensive claims settlement and other aboriginal issues. The paper examines the various positions and interests of the parties involved in government revenue-sharing from natural resources and concludes that the mining industry’s objectives can best be achieved by joining efforts with the aboriginal community and acting as its champion in genuine partnership. “It is about far more than just money,” the paper says. “It is about the importance of relationships and the opportunities well-nurtured ones can provide.”

The paper suggests partnering with other resource sector industries to improve access, certainty and clarity.

“The pooling of economic and political capital, with the weight of consensus behind it, will make it more difficult for governments to avoid addressing the issue in a purposive way,” it says.

The paper urges a more comprehensive study and analysis of the broader issue of access, and recommends establishment of a cross-sectoral roundtable of resource industry associations to co-ordinate efforts, develop policies and share good practices.

The full paper is available by visiting www.pdac.ca/pdac/advocacy.aboriginalaffairs/index/html

— The preceding is from In Brief, a quarterly publication of the Toronto-based Prospectors and Developers Association of Canada.