Only two months have passed since the Supreme Court of Canada delivered its Delgamuukw ruling on native title, but the decision has already spawned both new litigation and increased uncertainty in the treaty-negotiation process in B.C. The Tsilhquotin tribal council in Chilcotin, the Sechelt Indian band on the Sunshine Coast and the Songhees of Victoria have all launched land rights-related court actions against the provincial and federal governments, citing the sweeping new rights awarded to aboriginals under Delgamuukw. All insist that, because of the precedent-setting ruling, they stand to gain more in court than at the bargaining table.

Last week, the Delgamuukw fallout spread even further when a Nisgaa negotiator, Joe Gosnell, confirmed that, in light of the Supreme Court decision, the tribal council was reviewing its historic February 1996 Agreement in Principle (AIP) with the provincial and federal governments. Officially estimated to cost taxpayers a quarter of a billion dollars, the AIP's costs would only go higher if Nisgaa leaders demand to return to the bargaining table and renegotiate in light of Delgamuukw.

But that's not the half of it. New analysis suggests that Victoria and Ottawa have drastically underrepresented the cost of the AIP, the first of 50 treaties now under negotiation in B.C. When they signed it, government spokesman said the agreement would grant the Nisgaa $190 million in cash and 1,930 square kilometres of land, valued by federal negotiators at $36 million.

The $226-million total may be off the mark by tenfold, however. An independent analysis of the AIP, conducted in 1996 using the province's own timber-harvest figures, found that the AIP's combined cash and land commitments will cost in excess of $1 billion. In recent months, however, new analyses by two independent forest consultants suggest the land alone is worth $2 billion to the 5,151-member Nisgaa tribal council. Neither analysis is definitive, the experts say, but they stress there is no doubt the true value of what is being given to the Nisgaa is vastly higher than what is being acknowledged by Victoria and Ottawa. "This thing is just screaming for attention," says respected forestry consultant Les Reed, a University of B.C. professor emeritus, who provided one of the analyses. "I would think that [the $36-million figure] is ridiculously low."

Even such a massive cash-and-land settlement may not buy peace with the Nisgaa, however. Because the AIP contains no provision for the extinguishment of native title, and states that the treaty is not final, observers say the proposed treaty allows the Nisgaa to press for more concessions in the future.

Critics say that the AIP, which is to be the blueprint for other treaties, must be amended to include, at a minimum, clear surrender of title. Moreover, they say the province must also reconsider its cost-sharing arrangement with Ottawa, which commits B.C. to supplying 20% of the cash and 100% of land components of treaty settlements. Specifically, the province must either insist upon a rigorous valuation of lands under claim, as well as detailed compensation criteria and per capita targets, or else withdraw from the treaty process entirely.

Indeed, none of the provincial, federal and Nisgaa negotiators interviewed for this article would provide any solid criteria for how the 1,930 square kilometre figure was determined. Mr. Gosnell, senior Nisgaa negotiator in Terrace, says only that the figure was "less than 10%" of 22,000 square kilometres that the band sought in its original land claim.

Tom Molloy, lead negotiator for the Federal Treaty Negotiation Office in Vancouver, explains that the objective of the settlement was not "compensation for past wrongs," but rather an exchange of "value for value." This is a policy issue, not a legal one, he says, adding that it is up to governments to define aboriginal rights, not the courts.

Still, when pressed for stricter criteria, Mr. Molloy says only that it was federal policy for the Nisgaa claim to be valued in accordance with the value of treaty settlements in his home province of Saskatchewan. He did not explain what criteria were used there, or what relevance these have to negotiations in B.C.

Likewise, no negotiators could provide detailed valuations of the 1,930 square kilometres of land. Phil Symmington, acting manager of treaty negotiations for the B.C. Ministry of Forests, says no market assessment has been conducted because the settlement is not comparable to a private land transaction. "From a forestry point of view, market value doesn't make sense," he says.

Senior federal negotiator Jim Barkwell confirms that no "timber cruise" (the industry expression for a detailed survey) was conducted to determine the value of the Nisgaa land. However, for the purpose of allocating costs between Victoria and Ottawa, negotiators used a figure of $36 million. That sum, he says, was calculated by determining how high an annual allowable cut (AAC) of good-quality timber the claim area could sustain, then multiplying the dollar value of that total by the number of years its takes to grow trees to maturity—100 years in the Nass Valley.

But Victoria economist and business consultant Robin Richardson says the governments' numbers do not add up. In a detailed analysis of the AIP, prepared for the B.C. Fisheries Survival Coalition in May 1996, he found that the Ministry of Forests' own figures indicate an AAC of just over 220,000 cubic metres in the Nisgaa claim area. Based on a minimal stumpage rate of $15.91 per cubic metre, and a 100-year forest rotation, the actual value of the proposed Nisgaa forest resource is $351 million.

Mr. Richardson said his estimated stumpage rate was modest compared to the 1996 north coast average of $40 per cubic metre. Assuming a smaller, but higher grade AAC of 165,000 cubic metres, able to fetch a marginally increased stumpage rate of $28.05, the timber value would jump to $490 million.

And that is just the value of the timber. Mr. Richardson's analysis indicates that, in addition to the $190 million in cash to be placed in a non-taxable "Settlement Trust," the AIP will also require: $59 million for inflation or interest costs; $122 million for the proposed Nisgaa Highway (to be under "provincial legislation," but "controlled" by the Nisgaa); $21 million for a commercial fishery program and fisheries trust (staffed primarily by Nisgaa); a minimum $100 million in compensation to forestry, fishing and other commercial interests for loss of their tenures; and several more million dollars for funding of Nisgaa self-government.

The latter provision calls for self-government to be funded primarily by the Nisgaa's "own source" revenues, but with any deficit to be contributed by the provincial and federal governments. Equally unknown are the various economic costs associated with self-government, including:

• Lost water-licence revenues;
• GST and PST exemptions;
• Lost revenues for utility corridors;
• Exclusive Nisgaa recreational tenures and hunting rights;
• Lost income-tax revenues—even after the proposed elimination of the Nisgaa exemption—as a result of the tribal council's combined government-corporate ownership structure, and its capacity to provide non-taxable "benefits" to individual band members; and
• The costs of providing continued "duplicate" social services to off-reserve Nisgaa, even though they are eligible for all the benefits entailed in the AIP.

Even discounting these unknown costs, Mr. Richardson concludes that the total AIP price tag could easily exceed $1 billion. Moreover, the AIP's narrow definition of "own source" revenues virtually guarantees a self-government funding shortfall. Excluded from this category are the $190 million in cash payments to the Nisgaa, the inflation component of the treaty's Settlement Trust and any proceeds from the sale of land.

At the same time, the Nisgaa remain eligible for any programs and grants otherwise available to provincial and local governments, as well as private corporations. In particular, Nisgaa negotiator Charles McKay anticipated in 1996 that Forest Renewal B.C. (FRBC), the industry-funded agency established by the NDP to assist workers displaced by the government's land-preservation initiatives, could provide his bands a total of up to $200 million for restoration projects, over and above the province's AIP funding commitments—even though, as private timber owners, the Nisgaa will contribute nothing to the fund.

After the release of Mr. Richardson's timber-value estimates, chief provincial negotiator Trevor Proverbs announced last September that the AAC of "operable forest" in the Nisgaa territory had been revised down to 165,000 cubic metres, reducing the total timber base to 16.5 million cubic metres—a 26% drop from the Ministry of Forests' previous figure. This despite an NDP-commissioned report on native land claims prepared by KPMG accountants in February 1997 that predicted province-wide harvest rates would decrease over the next 90 years to only 80% of current levels.

Consultant Reed notes the AAC in the Nisgaa territory has already dropped further in one year than KPMG predicted it would in 90. While he maintains that the AAC reductions are unnecessary, Kootenay forest consultant Herb Hammond is of an opposite view. Based on his own analysis of the claim area, conducted on behalf of the Nisgaa, Mr. Hammond says it is "a very large, degraded land base, needing millions and millions of dollars over 30 to 40 years." Still, as Mr. Barkwell said, neither government nor the private sector has ever conducted a detailed, formal "timber cruise" of the land which, if the treaty is approved, will constitute the biggest land transaction in the history of the province.

Some critics maintain that both the province and the Nisgaa are deliberately downsizing the value of the timber resource to make the AIP appear less costly. Moreover, the lower timber valuation will paradoxically entail an increase in not only the amount of potential funding that the Nisgaa can solicit from FRBC but also in the "own source" revenue-deficit that can be claimed by the proposed Nisgaa Central Government—obliging governments to increase their share of funding for self-government even further.

FRBC CEO Lee Doney says the Nisgaa already receive $1.5 million to $2 million a year in restoration funding, and that such funding is expected to continue after the treaty is ratified. While insisting this funding is separate from the province's AIP commitments, Mr. Doney says that no other private timber owner is the beneficiary of such FRBC largesse. John Sparks, a lawyer for Skeena Cellulose, the largest land tenure holder affected by the Nisgaa claim, says the province's downsized "operable forest" is not a complete indication of timber value. Simply stated, "operable forest" is timber that can be harvested at a sustainable rate and at a cost lower than what it will fetch on the market. But that does not mean that non-operable forest is valueless. Twenty-year-old timber may not yet be operable, but its value is steadily growing. And as current restoration programs are completed, the portion of the Nisgaa claim area that is operable will steadily increase, says Mr. Sparks.

Mr. Proverbs actually seems to have confirmed that the government's valuation estimates may be too low. Asked how much of the proposed Nisgaa timber supply is "non-operable," requiring restoration or replanting, Mr. Proverbs agreed to an estimate of 500 square kilometres—roughly 25% of the entire area. When further asked if those currently "valueless" lands would be worth at least $200 million if a similar sum were invested in restoration, he answered in the affirmative.

When it was then suggested that if 500 square kilometres of seedlings are worth $200 million, then the remaining 1,430 square-kilometres of already-forested land must be worth at least three times that amount (thus rendering the federal estimate of $36 million less than credible), Mr. Proverbs had no response.

Moreover, paragraph 90b on page 21 of the AIP effectively guarantees that the value of the timber resource will remain at no less than current market levels. Specifically, it states that "the Nisgaa Central Government will be in the same economic position eight years after the effective date as if there were no transitional arrangements." In other words, if after eight years the amount of revenue that the timber resource is contributing to Nisgaa coffers is not equivalent to fair-market value, then the Nisgaa must be reimbursed for the shortfall.

Marlie Beets, vice-president of aboriginal affairs for the Council of Forest Industries, notes that the AIP does not specify who is responsible for compensating the Nisgaa for the possible shortfall. Nor does it contain a qualifier that compensation must be dependent on the Nisgaa making reasonable efforts to facilitate continued logging in the area. Indeed, Nisgaa tribal council member Ed Wright says his bands intend to harvest their pending timber resource independently, effectively closing the area to current tenure holders.

According to Terrace forest consultant Dave Parker, Mr. Richardson's $351-million valuation, which is based on the province's previous AAC figure of 220,000 cubic metres, is far too conservative. Mr. Parker, a former Social Credit forests minister, notes that the NDP government has steadily slashed AAC levels over the past five years to historic lows. Based on his own detailed timber analysis and review of historical documentation, Mr. Parker estimates a total harvestable timber base of 63 million cubic metres, comprising 38 million cubic metres of saw logs, and 25 million cubic metres of pulp logs—four times the province's figure. Says Mr. Parker: "The information released has been very misleading, something less than the truth." He suggests the value of this timber and subsurface rights is "in excess of $2 billion."

Consultant Reed agrees. "Estimates of the cost of this settlement, when honestly tallied, indicate a bill possibly in excess of $2 billion," he says. Adding to the $2 billion the other cash-funding components of the AIP identified by Mr. Richardson, observers say the treaty's total price tag could be as high as $2.5 billion.

States Mr. Reed: "No matter how the AIP is presented, it will lead eventually to a negative impact on the forest sectors, high probability of log exports, job shifts away from non-native workers based on reverse discrimination, higher stumpage fees, and existing plants desperately short of raw materials, of uncertain size, species mix and grade."

The expensive Nisgaa deal is not a one-shot arrangement, either. Negotiator Molloy has stated that the governments' policy is to negotiate future treaties in line with the per capita value of the Nisgaa deal. Given B.C.'s current aboriginal population of 139,655—25 times the Nisgaa membership—the total price tag of all outstanding treaties could be in excess of $60 billion.

Even assuming Mr. Richardson's more modest valuation, the price tag for outstanding treaties could still be $25 billion, a figure far higher than the $5 billion forecast contained in KPMG's analysis last year. Coincidentally, one of KPMG's senior partners, Hugh Gordon, was acting as part-time assistant chief negotiator for the province at the time of the Nisgaa negotiations. Mr. Gordon denies his involvement in the negotiations compromised KPMG's objectivity. "I never really saw a conflict," he says. Aboriginal Affairs Minister John Cashore has stood by the KPMG forecast.

Martyn Brown, formerly executive director of the Citizens' Voice on Native Claims and recently appointed to a senior position within the B.C. Liberal party, says governments should have negotiated a tougher deal with the Nisgaa. The fact that the Sechelt, second in line after the Nisgaa in treaty negotiations, are now going to court seeking even greater concessions than those awarded in the Nisgaa AIP, seems to confirms Mr. Brown's view that the claimants' demands will only escalate in the absence of clearly-defined compensation objectives and criteria. The paucity of guidelines, he says, fuels the public conception that provincial and federal negotiators, bargaining behind closed doors, are not representing their constituencies. As a result of the federal government's constitutional "fiduciary" obligation to represent native interests, negotiators may even be in a legal conflict of interest (see story, page 8).

Now that native title rights have been expanded radically under Delgamuukw, the only way for the province to achieve certainty in treaty negotiations is to insist on title extinguishment—a quid pro quo exchange for compensation, says Mr. Brown. Moreover, given that Delgamuukw declares that title may be surrendered only to the federal Crown, the NDP government must also reconsider its ill-conceived, 1993 cost-sharing arrangement with Ottawa, he says. He notes the Nisgaa AIP is the first and only treaty in Canada to which a province is a party. "The court has said effectively said that treaty settlements are a federal responsibility," says Mr. Brown.

Mr. Reed agrees that a more open, rigorous approach is required. "Both senior governments have gone to considerable lengths to keep the public uninformed," he says. "The AIP is deliberately vague and ambiguous on crucial points. Instead of transparent consultation, the bureaucrats are leading the parade into a situation that will generate outrage."

Negotiations to conclude the Nisgaa treaty were underway behind closed doors in Vancouver last week. Independent MLA Jack Weisgerber, an aboriginal affairs minister under the Socreds, says he would surprised if, in light of Delgamuukw, provincial negotiators are not now demanding that the extinguishment language be added to the AIP. "I understand that that's being discussed," Mr. Weisgerber says. "But if the province goes back and tries to get extinguishment language, the Nisgaa will say, 'While we're at it, let's talk about money and land.'"

Negotiators have not speculated publicly about when the deal will be completed. Also unknown is what happens after the pact is sealed. Some critics argue that the B.C. public has a constitutional right to vote in a public referendum before politicians ratify it, but Premier Glen Clark has rejected that option, promising only to hold a free vote in the Legislature on the deal.

—Burke Lewis

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