Benefits agreements and “divide and rule” tactics: Following the money behind the Coastal GasLink pipeline

Investigations Local National News Provincial

20 CGL agreements with bands are only the start of a complicated story

Photo by Emily Fagan, Editor-in-Chief

Over the past few weeks, the Coastal GasLink (CGL) pipeline has gained national attention as tensions rise between supporters of the Wet’suwet’en hereditary chiefs and police. 

Prime Minister Justin Trudeau has heralded the pipeline as “the single largest private sector investment project in Canadian history,” and Premier John Horgan says it could bring “an end to systemic poverty as a result of a $40-billion private sector investment.”

The $6.6 billion LNG pipeline is four years behind schedule, and part of a larger LNG Canada project worth $40 billion. The Narwhal reported that, according to B.C. government estimates, the total financial incentives for the project are $5.35 billion, which includes subsidies and numerous tax exemptions.

By their estimates, natural gas royalties will bring in an additional $70 million for the government over the next three years. They estimate $54 million of that will come from increased production this year, increasing royalty revenue from $153 million to $207 million.

Considering the potential revenue, CGL poses economic opportunities for the region. To date, CGL claims they’ve awarded $825 million to local and Indigenous contractors in northern B.C. CGL also invests in the community through educational and training initiatives. They estimate around 2 000 jobs will be created during the pipeline’s construction but once the pipeline is in the ground, it will only employ 16-35 full-time staff. 

CGL projects construction will be completed by 2022.

But there’s more to the story than employment opportunities and fossil fuel subsidies. The CGL pipeline has been made possible by millions of dollars laced into benefits agreements, the investment of Alberta public sector pensions, and alleged “divide and rule” tactics by the B.C. government through funding a matriarchal society intended to undermine the hereditary chiefs. 

65 per cent Alberta- and US-owned 

Alberta has a huge stake in the pipeline. If a deal goes through as expected, 65 per cent of the project will be owned by two investment companies. One of those companies is Alberta Investment Management Corp. — an investment firm which manages Alberta’s public sector pensions. The pensions of nurses, teachers, and first responders are dependent, in part, on the returns from the CGL pipeline.

The other investment company, KKR, is an American-owned private investment firm with extremely deep pockets. Forbes reported in May 2019 that the company has $200 billion in assets. The company’s two co-founders, George Roberts and Henry Kravis, are worth $5.6 billion.

Wet’suwet’en hereditary chiefs opposed to CGL 

The Wet’suwet’en hereditary chiefs were mentioned by CGL as a group that would be consulted with in the project’s initial proposal. CGL has had repeated meetings with the group since 2012, and the Wet’suwet’en hereditary chiefs have repeated their opposition to the project. 

One of the central tenets of Wet’suwet’en law forbids trespassing — respecting the territory of another house or nation is paramount. If a person was caught trespassing or hunting on another territory after one warning, the offence was punishable by death. 

In the Wet’suwet’en governance system, decisions and laws are made in a feast hall. The community can voice their disagreements. Horgan has attended some of these feast halls, along with ministers and federal counterparts.

The land the hereditary chiefs have, from the Delgamuukw v. British Columbia Supreme Court of Canada decision, is about the same size as the country of El Salvador. This 22 000 square kilometres of territory is split into five house clans, which are represented by the 13 hereditary chiefs. All of the current head chiefs are opposed to the pipeline project. 

The Delgamuukw decision, however, didn’t define whether or not the Wet’suwet’en have Aboriginal title under Canadian law. If they had this title affirmed, they could claim Aboriginal title under the 1982 Constitution’s section 35. In the 20 years since the Delgamuukw case, this question remains open.

Those 20 agreements reached with band councils, and the millions promised

There has been a great deal of attention on the 20 benefits agreements CGL has signed with First Nations bands along the route. These agreements are not available to the public, but one was leaked to the CBC. In it, a clause requires that everyone in the band continues to support the project and refrain from dissenting on social media. 

Another unsigned agreement disclosed by the Yellowhead Institute shows a clause encouraging First Nations bands to persuade other members to support the pipeline. The agreement states CGL’s intent of gaining “irrevocable consent.” 

“[The First Nation] will not take, and will take all reasonable actions to persuade [First Nation] members to not take, any action, legal or otherwise, including any media or social media campaign, that may impede, hinder, frustrate, delay, stop or interfere with the Project’s contractors, any Authorizations or any Approval Processes,” the agreement reads. 

Another clause prevents the First Nation from challenging TC Energy using their rights to Aboriginal title under the Constitution. Even if a Nation is able to claim land title in the future, the agreement limits their ability to make any legal claims against the company later as well. 

The government also has 16 agreements with Indigenous groups along the route, separate from the 20 with CGL. These agreements all offer an initial amount of around one million dollars, an additional payment of around half a million dollars, and a share of $10 million per year in ongoing payments. 

That $10 million is supposed to be distributed among “eligible First Nations” annually, on the anniversary of the project’s in-service date. What Nations constitute “eligible First Nations” is decided by the province. But, if all of those Nations can agree on how the $10 million will be divided up by a specific date, the government will distribute the money according to that. If not, the government will decide how it’s divided. 

For instance, the Nee-Tahi-Buhn band is promised $2.1 million. They received half that amount after signing this deal, and will get the other half after the pipeline is completed. They’re eligible for $420 thousand in additional payments. On top of that, Nee-Tahi-Buhn will receive a portion of that 10 million dollars in ongoing payments every year. How much of the 10 million they receive, however, was likely divided up in a separate deal in 2015. That figure could not be found on the BC government website, so it is likely not made public. 

On their website, another band, the Nak’azdli Whut’en, expressed how divided their community was over this agreement. The band council split three to three when voting on it, and the split vote was decided by a chief. 

Like the agreements with CGL, these agreements also state that they cannot impede on the progress of the pipeline in any way. There’s also a section relating to the Aboriginal rights in the charter, and in signing this deal the bands agree not to challenge CGL on the basis of those charter rights. 

The consultation process

From the project’s start, both Horgan and CGL made it clear they weren’t willing to budge in their support. 

In the project’s initial proposal from 2012, CGL listed 30 Indigenous groups that had been informed of the project. They expected at that point that some groups would disagree, but they said they would “adjust engagement accordingly.”

Likewise, Horgan continues to talk of continued dialogue. Horgan has repeatedly made it clear, however, that stalling or cancelling the project is out of the question. 

In a press conference at the end of January, Horgan said he doesn’t expect Indigenous groups to “love” the pipeline. 

“There needs to be a legitimate understanding that the majority of the people in the region are going to benefit from this, and that’s what dialogue will produce,” he said.

Throughout this process, dialogue from the government always comes with the caveat that the project will go through. Even when Horgan and the federal government began to talk about the RCMP moving out of Wet’suwet’en territory, they did so while still heralding that the project would continue undisturbed. After rail blockades continued to stall the country to an unprecedented degree, they finally agreed to remove the RCMP from the territory and  allow a two-day pause in CGL’s construction during their talks. 

Concerns of “divide and conquer”

In a press release from 2014, the hereditary chiefs voiced their concern of a “divide and conquer” strategy they claim the government used. Before a feast hall began, the invited government representatives left. In the press release after the feast hall, the hereditary chiefs claim the government supported a nonprofit society called the Wet’suwet’en Matriarchal Coalition (WMC) to “divide and conquer” their peoples and delegitimize the hereditary chiefs. The B.C. government and CGL each donated $30 000 to the group. 

“[The Province] have secretly planned with and provided resources to a new B.C. Societies Act organization called the WMC,” The hereditary chiefs said in a press release. “Evidencing yet another in a long history of dishonorable sharp dealings with the Crown.” 

The women that founded the organization, Gloria George, Darlene Glaim, and Theresa Tait-Day, wanted to support the CGL project in light of the economic opportunities it could offer for their young people.  

Glaim resigned two years later. In her resignation letter, Glaim stated that the WMC was formed “expressly to sign a benefits agreement on behalf of the clans.”  

Apart from this society, there are Wet’suwet’en matriarchs that feel underrepresented by the all-male group of hereditary chiefs. This past week, during the talks with federal and provincial partners, the hereditary chiefs welcomed matriarchs to the table. These issues of representation are being worked out by the Wet’suwet’en, and that situation is separate from the WMC that was funded by CGL and the B.C. government in 2014. 

CGL and the B.C. government have clear confidence in the project, despite the lack of consent from the Wet’suwet’en hereditary chiefs. What’s occurring now is a direct result of almost a decade of consultations, and a failure to reach consensus. It’s complicated on every level, but following the money reveals how “the largest private sector investment in Canada’s history” has been made possible.