A Comparative Cost Analysis of the Nisga'a Treaty
Executive Summary
1. Total costs of the Nisga’a Final Agreement (NFA) will be at least $1.3 billion ($1,295,400,000), which is almost three times higher than the official government estimate of $485.8 million. The Government of British Columbia will contribute $976.3 million, or 75% of the total, while the Government of Canada will contribute only $319.0 million, or 25% of the total.
2. Under the existing Canada - British Columbia Cost-Sharing Memorandum which recommends allocation of total costs 75% to Canada and 25% to British Columbia, the Government of British Columbia should receive a Special Purpose Capital Transfer of at least $652.5 million as compensation for the Nisga’a Treaty from the Government of Canada. If BC’s share of the Canadian population was used as the criterion for the cost-sharing formula, British Columbians should receive as much as $805.3 million from the Government of Canada.
3. The Government of British Columbia has seriously underestimated costs as follows:
(a) Non-Reserve Nisga’a Settlement Lands (1,930 square kilometres) are valued at $406.4 million compared with $106.7 million by the Government of British Columbia. This valuation includes:
(i) Forest Resources: $268.2 million
(ii) Mineral Resources: $13.8 million
(iii) Water Resources: $ 17.5 million
(iv) Fisheries Resources: $106.9 million
(b) The Nisga’a Highway will cost at least $87.0 million compared with the Government of British Columbia’s $41.0 million estimate.
(c) Third-Party Compensation will be at least $137.0 million compared with the BC Government’s official estimate of $23.0 million to $28.0 million.
(d) Forest Renewal BC may be expected to spend about $131.0 million on Nisga’a Lands over coming years.
(e) Loss of Value to the Crown for the Nass Wildlife Area: Included in this study is a conservative estimate of $208.6 million for compensation that should be expected by BC taxpayers for giving up considerable control of the Nass Wildlife Area (14,216 square kilometres) to the Nisga’a Nation.
4. Nisga’a Self-Government will result in more cost, not less, for Canadian taxpayers. It will result a $3.8 million increase of federal subsidies annually to the Nisga’a Government and on-going revenue losses for the Government of British Columbia. The Nisga’a will receive minimum annual subsidies of $32.1 million per year.
5. Reallocation of forest and fishing resources creates significant longer-term contingencies (not included in total costs listed above) with respect to the future of BC taxpayer-owned Skeena Cellulose , Forest Renewal BC and the fish processing industry in Prince Rupert.
6. The $652.5 million that the Government of Canada should pay to the Government of British Columbia is called "The Federal Nisga’a Treaty Obligation to British Columbians" in this study.The principles upon which this $652.5 million "Federal Nisga’a Treaty Obligation to British Columbians" are based are similar to the principles that underlie federal-provincial equalization payments, grants and other forms of intergovernmental transfers.The Government of British Columbia, therefore, needs to be compensated by the Government of Canada for:
(a) loss of economic opportunity for most of its citizens;
(b) the fiscal inefficiency caused by the erosion of the provincial government’s resource revenue base; and
(c) the need for fiscal equity with other Canadians so that British Columbians will no longer be asked to assume a disproportionate share of Canadian society’s cost of this attempt at reconciliation with aboriginal peoples.
7. The "Federal Nisga’a Treaty Obligation to British Columbians" represents a new element in federal-provincial financial arrangements. This approach should be applied on a case-by-case basis to each of more than 50 BC Indian treaties expected in coming years.
8. This study recommends that:
(a) The Government of British Columbia commission an independent review of total costs associated with the Nisga’a Final Agreement and that these costs be made public.
(b) The Government of British Columbia determine its share of the total costs in relation to the Government of Canada in accordance with the 1993 Canada-British Columbia Cost-Sharing Memorandum of Understanding, and
(c) The Government of British Columbia obtain compensation from the Government of Canada in the form of a Special Purpose Capital Transfer (referred to as the "Federal Nisga’a Treaty Obligation to British Columbians" in this study).
9. The Government of British Columbia should recognize that BC Crown Land has substantial value and that a value can be placed on it in an objective manner. If British Columbia wants to receive the full entitlements under the Cost-Sharing Memorandum, it must insist on fair economic values for all land and resources within its boundaries.