Innu: Muskrat Falls Bailout Betrays Reconciliation

Innu Nation leaders say Canada and Newfoundland and Labrador’s new plan could leave Innu communities shorthanded.

The Independent is 100% funded by its readers. Your pay-what-you-can subscription or one-time donation provides a base of revenue to keep our bills paid and our contributors writing. For as little as $5 a month, you can fund the future of journalism in Newfoundland and Labrador.

Innu leaders in Labrador say their communities have been dealt a blow following this week’s announcement of federal support for a rate mitigation plan for the Lower Churchill Project.

The details of Wednesday’s joint announcement by Prime Minister Justin Trudeau and Premier Andrew Furey of an agreement-in-principle for a Muskrat Falls provincial bailout package valued at $5.2 billion came as a surprise to the Innu Nation—on whose unceded lands the Lower Churchill Project is being built.

Innu Nation leadership is outraged by their exclusion from the negotiations and announcement, saying the Innu were not consulted on a matter that could detrimentally impact their communities. A press release on Wednesday said Innu Nation was only able to obtain the information contained in the technical briefing by “barging into a press briefing to which they had not been invited.” The person who entered the media event in St. John’s is former Labrador MP and Innu leader Peter Penashue. On Thursday, Grand Chief Etienne Rich demanded the agreement-in-principle be made public.

The 13-page technical briefing outlines federal government support in the form of a $1 billion federal loan guarantee for the Muskrat Falls and Labrador transmission assets. It also includes a $1 billion investment in the province’s portion of the project’s Labrador-Island Link—through a new joint Canada-NL Hydro entity that will own the provincial government’s current equity in the asset.

Most significantly, Canada is promising to provide $3.2 billion in transfer payments to the province, which is equal to the federal government’s annual net revenue from the Hibernia offshore oil project. As reported by John Woodside for National Observer, that estimate rests on Hibernia extracting oil until 2047 at currently projected prices.

The announcement comes ahead of an imminent near-doubling of electricity prices for ratepayers in the province due to Muskrat Falls’ cost overruns—which the Muskrat Falls Inquiry laid largely at the feet of Crown corporation Nalcor Energy and the provincial government. It also comes days or weeks ahead of Trudeau’s expected federal election call.

Innu to get less than they bargained for: lawyer

Innu Nation says Canada and Newfoundland and Labrador’s “backroom deal” could leave Innu with huge losses. Innu made enormous concessions when they signed a Lower Churchill Project Impacts and Benefits Agreement (IBA) in 2011 that effectively paved the way for the development of the Muskrat Falls megadam.

The Innu Nation’s land claim agreement-in-principle with Canada was ratified in 2011. But the final comprehensive land claim has yet to be ratified, meaning Innu continue to hold underlying title to their homeland of Nitassinan, which spans much of Labrador.

The Lower Churchill IBA promises Innu annual payments that are partly based on after-debt net cash flow from Muskrat Falls. The Innu believe this amount will be impacted by the rate mitigation deal between Canada and the province.

On Friday Matt McPherson, a partner at law firm Olthius Kleer Townshend—which represents the Innu Nation—told The Independent the Innu Nation has received more information about the agreement. Though it still doesn’t provide all details of the federal-provincial AIP, “the information we do have indicates that the Innu very likely won’t get the benefits they were promised from Lower Churchill IBA under this AIP. There will not be any profits to share under the apparent structure of the plan.”

“If the rate structure is changed substantially–and particularly if the cost mechanism is changed significantly in terms of how costs are allocated, and in terms of what Newfoundland and Labrador are actually entitled to–that could have a really significant impact on the benefits that are accruing to Innu Nation,” McPherson told The Independent.

In exchange for the financial compensation, the Innu relinquished their right to litigate against the colonial governments over the Muskrat Falls project. Tens of thousands of ancient Innu artifacts were disturbed and removed during the construction phase. The project has already had negative social and cultural impacts on the Innu and Inuit communities downstream. 

During the 2016 Indigenous-led uprising against the dam over fears of methyl mercury contamination of country foods, Innu Elders Tshakuesh (Elizabeth) Penashue, Bart Jack Sr., and Rose Montague spoke out against the dam, saying the destruction to their way of life was not worth the financial benefits.

“The Innu feel betrayed by the province and by the Prime Minister in particular,” McPherson said. “The Prime Minister bailed out Newfoundland and ignored the Innu.”

McPherson says the Innu “have unextinguished Aboriginal rights where the dam is constructed. They consented to the project being built in exchange for benefits under the IBA—benefits it looks like they now won’t get.”

On Thursday the premier’s office told media that its commitment to the Innu Nation “will be honoured and that payments will be provided to the Innu as the province can fiscally afford.”

McPherson says that comment “does nothing to assure the Innu that the province will actually honour its commitments.”

Residents of Sheshatshiu joined the Muskrat Falls resistance in October 2016.
Residents of Sheshatshiu joined the Muskrat Falls resistance in October 2016. (Photo by Justin Brake.)

Questioning reconciliation

Now, Innu leaders are calling into question Canada’s commitment to reconciliation.

“We are really disappointed in Prime Minister Trudeau,” Innu Nation Deputy Grand Chief Mary Ann Nui said Thursday. “He keeps on talking about reconciliation but when the rubber hits the road, and he is making big decisions that affect us and our land, he slams the door in our face. All we ever get from him is meaningless words. He doesn’t follow through on his commitments to us.”

At the joint press conference Wednesday, Trudeau said “reconciliation is something of fundamental importance to our government.” He then deflected to Furey, who said the deal was “done as it should be commercially, kept to officials.” Furey added the governments have “been fairly transparent.”

Despite Innu leadership’s allegations and concerns, Furey said the Innu Nation “were part of the technical briefing” Wednesday morning, and that “[as] we all understand the deal better, I’m sure they will be more happy as the details become more available to them.”

On Thursday Grand Chief Rich responded. “When you spend over $5 billion in public money, you can’t just disclose a 14-page PowerPoint slide at a technical briefing. People need to know more. Who is going to benefit? Who is going to get hurt? What kind of strings are attached to the money from Canada? We don’t have any answers to these questions—that’s not acceptable and the full details of the agreement need to be made public,” he said.

A request to the Prime Minister’s Office for comment on the Innu Nation’s concerns Thursday was directed to Natural Resources Minister Seamus O’Regan, who accompanied Trudeau and Furey at Wednesday’s announcement.

“This is something that is very important to me as a Labradorian, and to our government,” O’Regan said in a written statement. “The New Dawn agreement between the Province and the Innu Nation is an important source of revenue for the Innu, and I am confident the provincial government will continue working closely with them to honour the commitments.”

The Independent reached out to Furey’s office multiple times, asking how the bilateral agreement with Canada at the exclusion of the Innu does not violate the province’s commitment to reconciliation. The provincial government has committed to implementing the Truth and Reconciliation Commission’s calls to action, which includes implementing the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) as the framework for reconciliation.

On the issue of free, prior and informed consent, UNDRIP says that “[s]tates shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free, prior and informed consent before adopting and implementing legislative or administrative measures that may affect them.”

Furey’s office did not respond to The Independent’s requests for comment.

“Premier Furey has broken his promise to us. The Prime Minister’s actions show he is far from his stated commitments to meaningful reconciliation,” Grand Chief Rich said on Wednesday.

“How can any Indigenous nation trust that the promises made will be honoured if this is how the governments behave?”

Did you enjoy this article? Fund more like it, and support the future of journalism in Newfoundland and Labrador.

Get our weekly newsletter for in-depth reporting and analysis delivered straight to your inbox. You can unsubscribe from the newsletter at any time. Have a question? Contact us or review our privacy policy for more information.


Sign up for our weekly Indygestion newsletter


Sign up for the Indygestion newsletter

Each Saturday, we'll deliver a recap of all our in-depth reporting and analysis from the week.

Our donors make it possible.

Newfoundland and Labrador’s premiere outlet for progressive ideas is only possible with your support. Will you join us?

This site uses cookies to provide you with a great user experience. By continuing to use this website, you consent to the use of cookies in accordance with our privacy policy.

Scroll to Top