Law Times

PAGE 12 FOCUS APRIL 7, 2008 / LAW TIMES First Nations involved in new energy projects BY HELEN BURNETT Law Times province, almost all W ith a surge in energy projects being built and planned in the will involve consultations with First Nations communities with respect either to generation or transmission. And, many of those discussions have moved recently towards joint ventures and long-term partnership with industry, say lawyers. Because of the Integrated Power System Plan in the province, part of an evolution towards a need for power and more energy projects, and stemming from the duty to consult that has resulted from an evolution of case law and jurispru- dence, "what you're seeing in On- tario, from an overarching stand- point, is First Nations involvement in almost any and all energy proj- ects being developed in the prov- ince in the generation side and the transmission side," says Val- erie Helbronner, an infrastructure, project-development, and finance lawyer at Ogilvy Renault LLP, focusing on the energy sector. Aboriginal rights and trea- ties are protected under s. 35 of the Constitution Act, 1982, and the Crown has a duty to consult in situations where it has knowl- edge of the existence or potential existence of an aboriginal right or treaty right and is "contemplat- ing conduct" that might adversely affect the right, according to the Ontario government. "The reality is . . . almost any en- ergy or infrastructure project that's going to be developed, whether generation or transmission, will im- pact on treaty rights," says Helbron- ner, resulting in discussions with First Nations. "No energy project will be built in this province without a First Na- tions component to it," says Rich- ard King, an energy and environ- mental lawyer at Ogilvy Renault. King says no one was building power projects 10 years ago, but many will be be built in the next two decades, involving parties other than Ontario Hydro for the first time. This, along with the decisions on the duty-to-consult issue in Haida First Nations where treaty rights exist and where a land claim has been asserted and not proven, notes the Ontario Energy Board. "Not a week goes by in my practice when I'm not talking to someone about those cases, the duty-to-consult cases," says King, who adds that they are well known in the private sector. King says that the type of benefit that First Nations would want to see out of a particular energy project can include jobs, a revenue stream, a type of ownership, or ongoing environmental monitoring. One example, says King, was a 'Almost any energy or infra- structure project that's going to be developed, whether genera- tion or transmission, will impact on treaty rights,' says Valerie Helbronner. Nation v. British Columbia and Taku River v. British Columbia that came out of the Supreme Court of Canada in November 2004, which King says heightened awareness. The cases confirmed that the Crown has a duty to consult with First Nation in southwestern On- tario which intervened in the instal- lation of a power-generating station 20 km away, as they had environ- mental concerns and were looking for a better understanding of the impact of the project on the air and water in the area. At the other end of the spectrum, other First Nations that have strong wind resources on their land may wish to team up with a private developer themselves. Helbronner says it is important for developers and First Nations to make sure they understand what the other party is looking for, and that an open dialogue occurs. "I think it's important to get out on the table what different parties are seeking," she says. "I think that [what] makes this different from other commercial re- lationships is when the deal is cut, the developer is going to be encoun- tering the First Nation on an ongo- ing basis," which, says Helbronner, calls for a good relationship. Sandra Gogal, a natural re- sources and energy lawyer at Miller Thomson LLP, says that consulta- tion between industry and First Nations in the hydro sector is moving away from the typical im- pact and benefit analysis — which often resulted in jobs, contracting opportunities, scholarship pro- grams, and cash for communities — and towards partnerships. "We're moving away from that old impact and benefit analysis, and it's starting at partnership. We're starting at a whole new relationship phase. It's not about just the jobs anymore; it's really about long-term relationships between the industry and the First Nations," she says. "The contract is looking some- what different now — now it's more like a limited-partnership agreement. It's more like a joint venture or just a general partnership between two entities to develop this project together, and they're look- ing at sharing equities," she says. "They, generally, in my experi- ence anyway, say that, 'Look, you're benefiting from the resources on our lands in perpetuity yourselves. We'd like to benefit in perpetuity,'" she says, with the understanding that sharing profits also involves sharing the risks. Gogal says that, in her experi- ence, she thinks the industry is beyond the stage of not knowing what they have to do. "I think we're actually well beyond that stage and we're into real commercial partner- ship arrangements which are per- haps over and above legal principles or minimum legal requirements." She adds that moving to equity- As sure as the sun will rise. The McKellar Structured Settlement™ The only structure company with a legal department that reviews every settlement for tax compliance; with offices coast to coast and the ability to be at ten different mediations at once. Why settle for less? www.mckellar.com VANCOUVER 1-800-465-7878 EDMONTON 780-420-0897 McKELLAR STRUCTURED SETTLEMENTS INC. GUELPH 1-800-265-8381 HALIFAX 1-800-565-0695 Untitled-2 1 www.lawtimesnews.com USA 1-800-265-2789 partnership arrangements are not necessarily what the law may legally require industry to do, but is more of a commercial arrangement. "A right to an equity-participa- tion stake in the entity that will eventually develop a project is not necessarily accommodating an impact on aboriginal rights . . . To me, it's going much further out there and that's a good thing," she says. "If the government doesn't come up with a sort of blanket policy or a piece of legislation that says all resource development in the province of Ontario — one per cent, two per cent, whatever it is — goes to the First Nation in whose territory you happen to be in, until that kind of a movement happens, then industry is picking up the ball here and carrying it to a certain extent," she says. "They're given that percent- age of — whether you call it a percentage of equity — in any event, it's a percentage of the prof- its generated from the use of the resources," she adds. Gogal estimates that within the next five to 10 years, the industry might see something on the legisla- tive or policy front with respect to resource revenue-sharing. LT 3/31/08 10:01:36 AM

• Cover