Canada’s Hydro Partnerships No Panacea for First Nations

Katy Yan
Wednesday, June 9, 2010

Canada's rivers have been under assault for decades. Rampant dam building since the 1940s has led to environmental destruction, the resettlement of thousands of aboriginal ("First Nation") communities and the devastation of their traditional fishing and hunting grounds.

An Innu community is suing to stop Hydro-Québec from damming the Romaine River
An Innu community is suing to stop Hydro-Québec from damming the Romaine River
Alliance Romaine

Past negotiations between First Nation communities and dam developers focused on compensation packages rather than on whether these communities wanted the projects built on their lands or not. More recently, a new type of agreement has been developed whereby resettled First Nation communities are also project beneficiaries. But do these agreements represent a genuine paradigm shift in the way dams are developed in Canada, or are they a cynical effort by developers to get access to the First Nations' resources?

The Price of Power

During the 1960s and '70s, government-owned companies like Manitoba Hydro and Hydro-Québec built large dams that supplied power to Canada and the US at rates that remain among the lowest in the world. These rock-bottom prices failed to reflect the environmental and social costs borne by indigenous groups like the Nisichawayasihk Cree Nation, who were forcibly relocated when their lands were flooded by Manitoba Hydro's projects. Many resettled people later migrated to Winnipeg and other urban centers far from their traditional homes, instead of remaining in their new resettlement areas, tearing them away from their cultural homeland and traditional lifestyles.

In 1974, First Nation communities in the hydro-rich provinces of Manitoba and Québec signed treaties with these dam-building agencies. The treaties allowed several large hydro projects to be developed on their lands, but also defined the rights of many First Nation groups not directly involved in the negotiations, including rights to land ownership and resources management, self-government, economic development, the administration of justice, health and social services and environmental protection.

Despite the economic promises of these agreements, the Assembly of Manitoba Chiefs noted that 30 years later, "The socio-economic conditions of the First Nations remain far below national standards."

A turning point came in 2004 with the court case, Haida Nation v. British Columbia (Minister of Forests), where the Supreme Court of Canada decided that full consent of a First Nation must be given for resource claims by developers over indigenous lands. This seminal case began to alter the way hydropower companies in Canada negotiated with First Nation communities.

Burntwood River, site of the Wuskwatim project
Burntwood River, site of the Wuskwatim project
Christian Cassidy
One such example was the 200 MW Wuskwatim Dam on the Burntwood River, which was being developed by Manitoba Hydro for US$1.24 billion. After nine years of negotiations fraught with community distrust and anger, the company finally agreed to enter into an equity partnership with the Nisichawayasihk, the first case of its kind in Manitoba.

The agreement was signed in a June 2006 referendum. Community leaders were able to significantly change the utility's original plan and reduce the dam's impacts, including alterations to its design, construction and operation. Wuskwatim Dam was originally designed to flood 140 square kilometers of land, but as a result of these negotiations, it would now flood less than half a square kilometer (or the size of a small golf course). The Nisichawayasihk also rejected two access road routes that were too close to spiritual sites or caribou habitat.

As part of this equity partnership, the Nisichawayasihk would own 33% of the Wuskwatim generating station. The Wuskwatim Generating Station would be developed by Wuskwatim Power Limited Partnership (WPLP), a legal entity involving both Manitoba Hydro and the Nisichawayasihk. In addition, the two entities signed the Burntwood/Nelson River Agreement in October 2005, which promised employment to local Nisichawayasihk workers.

Falling Short

While on paper, the Wuskwatim planning process follows some key recommendations of the World Commission on Dams – such as gaining public acceptance of a project, acquiring community consent, and developing a plan to share benefits - in practice, its performance has been found lacking. On August 14, 2009, several members of the Nisichawayasihk blocked access to the project. The protesters said that Manitoba Hydro had not lived up to its agreement to provide jobs to their members, as called for by the Burntwood/Nelson River Agreement. Manitoba Hydro spokesman Glenn Schneider says that the Wuskwatim Dam currently employs 230 aboriginal people out of 800, but only 44 workers are Nisichawayasihk.

There has also been debate within the community about the value of the equity partnership. The community is not entitled to any profits unless the project makes a profit, which is unlikely for a number of years due to the high construction costs and upfront debt repayments typical of large hydropower projects. During the debates, Carol Koblinski of the Nisichawayasihk went door-to-door urging members to demand a better deal. According to Koblinski, while the Québec Cree signed the "Peace of the Braves" agreement with Hydro-Québec – which gave the Cree a $2.85 billion settlement over 50 years in exchange for clearing the way for hydropower – "here, we have to pay $62 million from our own band's funds, just to be a partner in our own resource area."

In contrast to Manitoba Hydro's partnership model, the 9.9 MW Minashtuk project developed by Hydro-Québec with the Innu people allowed the Innu to become the majority shareholder with a 51% stake in the project. Hydro-Ilnu, a general partner of the limited partnership responsible for designing the station, is entirely Innu-owned. Hydro-Québec also committed to buy all of the electricity generated by the project under a 20-year contract, which provided the necessary conditions for the local community to invest. The Innu were able to design and develop the project to best meet their needs, as well as receive a share of the profits that they plan to invest in employment initiatives. Some scholars have called the Minashtuk partnership "groundbreaking,"

Not all projects are going smoothly for Hydro-Québec, however. An Innu community has launched a legal bid to block construction of the Romaine hydroelectric project on the Romaine River in Quebec. Hydro- Québec plans four large dams on now-free-flowing river. The case will be heard in July. The Innu community also wants to broaden its fight against Hydro-Québec to seek redress for lands lost to make way for the Upper Churchill hydro project constructed in the 1960s, according to the Montreal Gazette.

Given the desperate economic conditions faced by many First Nation communities, such deals to develop their lands and rivers are likely to continue. But the jury is still out on whether these various agreements will provide them with equitable long-term benefits and full stewardship rights over their cultural and natural resources.

More information: 

Read more about Alliance Romaine's efforts to protect the Romaine River in Québec.