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First Nations owed over $100B under 1850 Ontario treaty: Nobel-winning economist – National Post

February 7, 2023

Joseph Stiglitz is testifying in a Sudbury, Ont., courtroom why First Nations may have been short-changed under a revenue-sharing treaty signed in 1850

Canada’s Prime Minister Justin Trudeau visits the Shingwauk Kinoomaage Gamig Centre of Excellence in Anishinaabe Education in Sault Ste. Marie, Ontario, Canada July 5, 2021. PHOTO BY GINO DONATO/POOL VIA REUTERS

NationTalk: National Post – He is a Nobel prize winner, former vice president of the World Bank and one of the globe’s most famous economists.

And this week Joseph Stiglitz is testifying in a Sudbury, Ontario courtroom, explaining why First Nations in the province’s centre-north may have been short-changed by more than $100 billion under a revenue-sharing treaty signed in 1850.

The star economist’s appearance is the latest highlight in an intriguing battle over a 19th-century agreement that the courts have already said was given short shrift by governments — to the detriment of Indigenous people.

The two “Robinson treaties” with Anishinaabe communities north of the Great Lakes were meant to pay an annuity to Indigenous people in a vast swath of Ontario, augmented as the government’s revenue from logging, mining and other resource development grew over the years.

But the annuity was boosted only once — from $1.75 per person a year to $4 in 1875 — despite the industrial exploitation of the area.

The Ontario government’s experts argue that its “colonization” investment — in everything from health care to railways and roads — actually exceeded its revenue from natural resources in one of the treaty areas — to the tune of almost $8 billion. After 170 years of virtually unchanged payments, the province says, those treaty members are owed just $35 million.

Indigenous leaders have called that analysis “ludicrous” and Stiglitz effectively agreed in his testimony Monday. The government’s expenses were related to far more than just the hewing of wood and extraction of minerals, and didn’t result in deficits, he said.

“Was the Crown so irrational that it had all these losses and said, ‘Give us more losses year after year’?” asked the 79-year-old Columbia University professor. “The (province’s) numbers don’t make sense.”

The real value in today’s terms of resource development in one of the treaty areas – above salaries, profit and other costs – is $126 billion, and at least 84 per cent of that should go to indigenous communities, he calculates. They’ve received about $300 million since 1850, according to Ontario government figures.

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The Robinson Superior Treaty (RST) and Robinson Huron Treaty (RHT) were hammered out 17 years before Confederation as the then Province of Canada sought to exploit copper and iron ore deposits north of Lakes Huron and Superior.

First Nations in the area demanded they be given a share of the potential proceeds. Not only was it their traditional land, but the British had long benefited from an alliance with the Anishinaabe, who fought on the Canadian side in the War of 1812. “Canada, and certainly Ontario, would not look the same today without the contributions of the thousands of Anishinaabe warriors,” RHT lawyer David Nahwegahbow said at one of the treaty hearings.

To press their case the First Nations eventually seized a mine site on Lake Superior, only to be met by government troops, before the two sides sat down for negotiations in 1850. The resulting treaties — among the first to pave the way for not just white settlement but resource extraction on Indigenous land — provided an up-front payment, plus the annuities.

But the payments stagnated as logging and mining in the area grew, prompting legal action this century to recoup what the Anishinaabe say they should have received in annuities.

After the first two phases of the trial, Ontario Superior Court Justice Patricia Hennessy ruled that the federal and Ontario governments had to pay an increased annuity that reflected a “fair share,” so long as there were enough resource-based revenues to do so without incurring a loss.

The province’s Court of Appeal mostly upheld that decision. But while Ottawa let it stand, the province is taking the decision to the Supreme Court of Canada.

Earlier this year, meanwhile, the two levels of governments entered into settlement talks with one of the treaty groups — Robinson Huron, but not Robinson Superior.

Last week, the third stage of the trial started, dealing with how much the governments owe the Anishinaabe. And that’s where the dispute has shifted to an economic analysis of 170 years of data.

In their report, government experts Robin Boadway, a Queens University professor emeritus, and University of Toronto economist Michael Smart estimate that the governments’ net revenues from resource extraction in the area were $12.7 billion for RHT and a loss of $7.9 billion for RST. When the risk incurred by government because of the uncertainty of future revenue is factored in, that means RHT is owed $2.4 billion in annuity payments, and RST $35 million, they argue.

“These patterns reflect the fact that Crown resource revenues were relatively stagnant in recent years, while resource-related expenditures continued to rise,” said their report.

But Stiglitz argues that the Ontario analysis is flawed in several areas, including by ignoring the risk borne by the Anishinaabe. They gave up their land, for instance, not knowing if wealth would flow from it, if the land would be properly managed or the Crown would actually honour its obligations to them, he said.

Stiglitz stressed on Monday that the province was also wrong to connect all of Ontario’s expenses in the region just to resource extraction — mining minerals and cutting down trees — and not the much larger amount of economy activity in other, related areas. Tax and other revenue from logging-industry support services, wood manufacturing and paper-making, for example, dwarfs revenue from actual logging, he said.

If the province’s claim of growing losses on investment were true, Stiglitz told the court, it would have been desperate by the 1960s to actually unload the territory. “The Crown would have been willing to go back to Anishinaabe and say, ‘Take the land back and we’ll give you a lot of money to give it back. It’s just a burden to us.’”