Alberta's Bearspaw First Nation fighting federal government for right to manage own savings

·6 min read
Chief Darcy Dixon of Bearspaw First Nation, which has asked Ottawa for the right to control its own oil and gas royalties and for the return of about $50 million collected from oilpatch activity on its territory. 'We're not asking for handouts,' he says. 'All we're asking is to manage money that belongs to us.' (Kyle Bakx/CBC - image credit)
Chief Darcy Dixon of Bearspaw First Nation, which has asked Ottawa for the right to control its own oil and gas royalties and for the return of about $50 million collected from oilpatch activity on its territory. 'We're not asking for handouts,' he says. 'All we're asking is to manage money that belongs to us.' (Kyle Bakx/CBC - image credit)

A southern Alberta First Nation is battling the federal government for the right to control its own oil and gas royalties.

The Bearspaw First Nation is demanding that Ottawa no longer collect any money on its behalf and return about $50 million collected from oilpatch activity on its traditional territory.

The band alleges the government is doing a poor job of investing the savings and won't release the funds because of Ottawa's mistrust of First Nations to properly handle money.

The federal government has had control of band money since the late 19th century and acted as trustee of any energy royalties earned by First Nations. To this day, the government also holds on to money earned from other sources, such as the sale of land, timber and gravel.

A few other First Nations in Western Canada have succeeded in withdrawing all of their funds from the federal government, but the process has always been challenging and in one case took 16 years of legal wrangling.

WATCH | Alberta First Nation battles for right to control oil and gas royalties:

The Bearspaw not only wants to access all of its funds but ensure that future revenues go straight to the First Nation. The band council wants to set up its own trust fund, which it expects will earn much more interest.

"We're not asking for handouts. All we're asking is to manage money that belongs to us," Chief Darcy Dixon said in an interview.

"Today, they're still saying, 'Hey look, folks. You can't look after your money. You can't do better than we can.'"

If the First Nation wanted to withdraw a few million dollars for a housing project, it would be easy to do, Dixon said, but to take control of the entire fund is proving to be "impossible."

Other First Nations get control of money

Bearspaw leaders say they were told by Indigenous Services Canada (ISC) on June 3, 2020, that the government would transfer all of the money to the First Nation, but the transaction still hasn't taken place.

Dixon wrote a letter this month directly to Minister of Indigenous Services Marc Miller, urging the government to "immediately take the steps required to truly respect your commitments to us in and to proceed without further delay."

In an emailed response to CBC News, an ISC official said the department could not comment on dealings with the Bearspaw First Nation because of confidentiality.

WATCH | How the Bearspaw First Nation spends some of its oil and gas royalties:

"We are committed to working collaboratively with First Nations interested in managing their trust moneys. This includes working with the Bearspaw First Nation to support their goals for their respective trust funds," ISC spokesperson Danielle Geary said in the email.

There was no response to an interview request with Miller.

The Samson Cree Nation, located about 100 kilometres south of Edmonton, launched a legal battle against Ottawa to gain access to its money in 1989 and was eventually victorious in 2005. The following year, the federal government transferred $349 million into the First Nation's newly created Kisoniyaminaw Heritage Trust Fund.

At the beginning of 2017, the fund had a balance of $456 million, while $202 million had been withdrawn by the Samson Cree.

Withdrawing all of its oil and gas royalties and self-managing the money had never been done before by a First Nation in Canada.

"The federal government fought tooth and nail. They spent millions and millions of dollars to prove that they were right and to really force the colonialism that we couldn't take care of our own money," said Stephen Buffalo, the son of former Samson chief Victor Buffalo.

Kyle Bakx/CBC
Kyle Bakx/CBC

Among other accolades, Victor Buffalo was invested into the Order of Canada for his instrumental role in the Samson gaining control of its natural resource revenues.

Since then, the Ermineskin Cree Nation, located next to Samson, and the Onion Lake Cree Nation, which straddles the Alberta-Saskatchewan border, have both set up their own trust funds after many years of delays working with the federal government.

The Ermineskin trust was established in 2011 with $123 million, and it has now earned $214 million more compared with the amount that would have been paid by the federal government if the First Nation had left the money under Ottawa's control, according to the fund's 2020 annual report.

Since inception, the fund's annualized rate of return is 10 per cent, compared with 2.17 per cent if the money had been left under government oversight.

Onion Lake's fund began in 2016 with more than $44 million after what it calls a "long and difficult struggle" to gain control of its own money. Since then, the trust has paid out $59 million to the First Nation and has a balance of just over $37 million. The annualized rate of return is nearly 11 per cent.

All three First Nations initiated legal action in their efforts to take control of their money from Ottawa.

'Canada should be transparent'

"It's really sad that the federal government thinks that we couldn't manage this ourselves," said Stephen Buffalo, who is optimistic that the Bearspaw First Nation will be successful in being able to manage its savings.

"If the precedent is set for this circumstance to take control of your own oil and gas revenue money, I think they just have to move forward," said Buffalo, who is president of the Calgary-based Indian Resource Council, which represents First Nations that have oil and gas production — or potential production — on their land.

Kyle Bakx/CBC
Kyle Bakx/CBC

The Bearspaw is one of three bands that make up the Stoney Nakoda Nation. Last year, each band passed a resolution allowing the Bearspaw to withdraw its per-capita share of the money the federal government was holding for the Stoney Nakoda Nation.

"Canada should be transparent about why they're delaying or why they can't hand over control over capital," said Brad Bryan, an assistant professor in the law faculty at the University of Victoria who teaches and researches First Nation fiscal relations.

The current financial arrangement with Ottawa is similar to having to ask your parents in advance for every dollar that you spend, he said.

Any financial abuses by First Nation members are limited and rare, Bryan said.

"In my experience, when I have been working as a lawyer in communities, I found the level of financial literacy among members — and not just council members — to be extremely high," he said.

In 2017, the National Indigenous Economic Development Board — which provides strategic policy advice to Ottawa on Indigenous economic development — produced a report about the issue at the request of the standing Senate committee on aboriginal peoples.

Among its recommendations, the board said the federal government should "make every effort to work with First Nations and First Nation institutions to overcome internal policy and legislative barriers that impede First Nation control over Indian moneys."

The report said Ottawa should use the guiding principle: "Indian moneys should be in the hands of First Nations, not the Government of Canada."

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