A seismic wave continues to surge in the Canadian resource
sector, as it is now widely accepted that Aboriginal groups wield
unprecedented power and authority over resource development
following years of intense legal activism. The recent Supreme Court
of Canada decision in Tsilhqot'in Nation v. British
Columbia represents a culmination of a series of court
decisions resulting in recognition of a claim for "Aboriginal
title." To the extent they have not done so already,
corporations and governments ought to re-examine their
relationships with Aboriginal groups and look for new ways,
including revenue sharing, to include Aboriginal groups as
stakeholders in resource projects if they are to proceed in
traditional Aboriginal territory.
Canada's economic prosperity is closely tied to the
development of its natural resources. In the past, resource
development largely proceeded with little consideration for
Aboriginal groups. Aboriginal groups were rarely viewed as
participants in the process and even less frequently as economic
partners. The Macdonald-Laurier Institute's recent report
Sharing The Wealth1 (the
"Report") provides further evidence that
the role that Aboriginal groups play in the development of
Canada's natural resources is changing dramatically. Aboriginal
groups have, in recent years and following various legal victories,
negotiated far more extensive arrangements with resource companies
than was ever possible in the past. Aboriginal groups are becoming
increasingly successful in working with business interests to
negotiate the following three types of arrangements: (1) company
payments to communities for developments within traditional
Aboriginal territory; (2) training and employment arrangements with
the resource companies; and (3) subcontracting opportunities with
the major developers.
The Report indicates that some provincial governments have
entered into revenue sharing agreements with Aboriginal groups for
the following reasons:
revenue sharing agreements were negotiated by the federal
government into modern treaties and are therefore constitutionally
protected Aboriginal and treaty rights;
governments want to encourage resource development and know
that Aboriginal opposition could slow down or stop commercial
governments worry about potential court rulings that will, by
extension of existing decisions about Aboriginals' land and
resource rights and obligations to consult and accommodate, compel
the sharing of royalty payments with Aboriginals and
With increasing power and influence being wielded by Aboriginal
groups, it has become increasingly apparent that sharing resource
royalties may be a required cost of getting Canadian resources to
market. However, not all provinces agree and the implementation of
resource sharing agreements is not consistent across the country.
Notably, Alberta and Saskatchewan have rejected the notion of
resource revenue sharing with Aboriginal groups.
Despite the opposition of certain provinces, it appears that
resource development companies are recognizing the potential
benefits of resource revenue sharing. The Prospectors and
Developers Association of Canada has indicated its support for
resource revenue sharing and noted the economic benefits that flow
from it, including greater participation in the mineral sector.
Additionally, various mining industry participants have stated that
resource revenue sharing agreements with Aboriginal groups would
improve access to resource-rich lands and encourage greater
Aboriginal support for resource projects.
The recent court decisions and the overriding responsibility of
the Government to consult with Aboriginals has established that
Aboriginal groups have significant rights with regards to the
development of Canada's natural resources. The relationship
between industry participants in Canada's resource sector is
rapidly changing and it is clear that Aboriginal groups will no
longer be passive observers in the development of Canadian
resources - they are demanding a seat at the negotiating table.
Aboriginal groups have demonstrated an acute ability to force
project delays or cancellations and therefore cannot be ignored or
shut out of the process. Future resource developments in Canada
will require creativity on the parts of industry and Aboriginal
groups to ensure that they obtain their fair share of the resource
wealth from any project in their traditional territory.
Non-governmental revenue sharing arrangements with Aboriginal
groups will likely become more common in obtaining the social
licence from these groups to develop lands in their traditional
1 Coates, Ken S. "Sharing the Wealth",
A MacDonald-Laurier Institute Publication, January,
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
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