First Nations’ land claims stall federal government sale plans
First Nations’ land claims stall federal government sale plans
Oilsands pipelines and other natural resource projects aren’t the only ambitious initiatives being stymied in B.C. due to deepening uncertainty caused by unresolved aboriginal land claims.
The Harper government’s plan to sell off billions in B.C.-based Crown assets has been stalled and in one instance thwarted by First Nation claims.
Since taking office in 2006, the government has made clear its intention to dispose of three major assets in B.C. — the historic Sinclair Centre in downtown Vancouver, the Jericho Lands (one of Canada’s most valuable pieces of real estate, in Vancouver), and Ridley Terminal in the port of Prince Rupert. It is also no secret that the government would, if it could do so with relative ease, privatize the Esquimalt Graving Docks dry-dock on Vancouver Island.
The Sinclair Centre, which includes a shopping mall and storefront federal offices providing pension, unemployment insurance, passport and immigration services, was one of nine properties across Canada sold in 2007 for just over $1.6 billion.
While unions and opposition politicians howled that it was a bad deal for taxpayers, it was the Musqueam First Nation that had the legal muscle to challenge the sale in court. That caused the government to remove Sinclair Centre and another Crown-owned property in Vancouver from the sale.
While Ottawa said it would consider putting the prime real estate back on the market in the future, nothing has been done.
“Because the sale in 2007 was subject to legal proceedings with regard to First Nations, (the government) removed the Sinclair Centre from the market,” said Annie Joannette, a spokeswoman for Government Services Canada. “There are currently no plans to sell Sinclair Centre.”
The government’s thwarted privatization ambitions present yet another example of the need for decision-makers to take seriously the power of aboriginal claims, recently strengthened by the unanimous Supreme Court of Canada decision, over Crown land.
The government, had it completed the Sinclair Centre deal with Vancouver-based Larco Investments, would have leased back the property and let the company manage the building.
Instead, the federal government remains the landlord and it’s bureaucrats making the decision to plow millions into continuing renovations and seismic reinforcing — $23.3 million in the past decade, including $15.5 million since the 2007 decision. Another $5.5 million has been budgeted for the next five years, according to Public Works.
The challenge to selling off federal land comes from major Supreme Court of Canada decisions, especially the 1997 Delgamuukw ruling that required governments to consult and accommodate First Nations when their interests where affected by economic development. Canada’s highest court cemented aboriginal title rights with a June decision granting a large tract of land to a B.C. interior First Nation.
“It’s clear the courts have created a legal quagmire surrounding the status of Crown-owned real estate, which serves nobody,” said Jordan Bateman of the Canadian Taxpayers Federation’s B.C. office. “It makes it difficult, if not impossible, to carry out a basic function of government — the sale of government property when it is no longer needed.”
Gordon Christie, a University of B.C. law professor and expert on aboriginal rights, said the challenge is particularly acute in Vancouver because of the Musqueam First Nation, one of three First Nations being consulted on the Jericho sale.
“The Musqueam are very litigious. They’re in a very difficult situation being in the middle of a city, so they’re always aware of what land is Crown land around them, and you can’t really get something by them,” Christie told The Vancouver Sun. “If other communities in B.C. are as careful about what’s in their area as the Musqueam are, then anything the federal government does to try to privatize would be in for a bumpy ride.”
Privatizations are still possible as long as a determined government meets the legal test of consulting and accommodating First Nations with claims to the property in question, he said.
But the potential for a costly lawsuit, and the risk of being required to pay compensation to a First Nation claiming title, could convince a government that privatization isn’t worth the headache, Christie said.
“That might be the economically rational thing to do.”
The Musqueam’s interest in government lands dates to at least 1991, when they announced a comprehensive claim for all federal lands within their territory. It also took control of provincial land adjacent to its main reserve near UBC. Increasingly, the governments are using “accommodation agreements”or payments over lands First Nations are willing to release from their claims.
Last year the federal government made such an “accommodation agreement” with the Musqueam, Tsleil-Waututh and Squamish First Nations over the sale of the Canada Post main building in Vancouver. Although the value of the payment was not released, the property sale itself was worth $130 million.
In the Sinclair Centre case, the government, by removing the Vancouver properties from the Larco sale, had to reduce the sale price to $1.4 billion, or $244 million less.
The federal government’s 21-hectare Jericho property, now used by the military, is far more valuable. Realtors suggested earlier this year that the property could fetch $1.1 billion to $1.7 billion, depending on how the city re-zoned the land for development.
The desire to sell off this asset predates the Harper government by decades. The notion was discussed publicly in the late 1980s and the plan to dispose of the property was included in a mid-1990s federal budget.
An internal federal document obtained last year by the B.C. Federation of Labour said Ottawa was in discussion with three First Nations — the Musqueam, Squamish and tsleil-Waututh — with the goal of “unlocking the value” of the property.
“There is a strong possibility that the sale could be concluded in 2014,” it stated.
A Department of National Defence spokeswoman told The Sun the property still hasn’t been transferred to the Canada Lands Corp., a prerequisite to any privatization.
But Liberal MP Joyce Murray, who represents the Vancouver Quadra riding, said last week she has been told the transfer to Canada Lands is “imminent.”
She also said Canada Lands officials told her its policy is to not acquire lands that have encumbrances. That means, according to Murray, that National Defence has likely reached some sort of settlement with the three Lower Mainland First Nations being consulted.
The Defence Department was unable to confirm Friday that an agreement has been struck, while the Musqueam did not respond to an interview request.
Doug Raines, the Musqueam’s manager, said on Monday that all parties had signed a confidentiality agreement and he could not talk about any plans or negotiations.
The third privatization is an unusual one, because it involves the Ridley Terminals that the previous Liberal government tried to sell. Harper, in one of his first moves after taking office in early 2006, killed that deal.
But in December 2012, the government, noting that the coal-loading operation had reversed years of huge losses, said it was to go back on sale.
However, the coal market has weakened and there’s been no public movement yet to sell the land.
“The government is consulting with key stakeholders, including First Nations, in respect of the proposed divestiture of Ridley Terminals, in advance of initiating a formal sale process,” said a federal Finance Department official.
A fourth business that the government would logically want to get out of is the ship repair operation at Esquimalt. A Public Works official said there’s no plan to sell, but also didn’t rule such a move out.
“Public Works and Government Services Canada continues to review all options available to improve the long-term management and governance,” of the graving dock, the department said in a statement.