Lubicon Reply to July 24th Federal Offer


Lubicon Lake Indian Nation
Little Buffalo Lake, AB
403-629-3945
FAX: 403-629-3939

Mailing address:
3536 - 106 Street
Edmonton, AB T6J 1A4
403-436-5652
FAX: 403-437-0719


August 6, 1992



Mr. Tom Siddon

Minister, Indian Affairs and Northern Development

Government of Canada

Ottawa, Canada K1A OH4



Dear Sir:



The Lubicon people have now reviewed the documents you presented to me on July 24th and I'm sad to say that supposedly new Federal Government settlement proposals represent little that's new and fall far short of claims made for them in both your cover letter and publicly by representatives of the Federal Government.



You claim in your cover letter that supposedly new Federal Government settlement proposals "amounts to more than $73 million based on (the Lubicon) estimate of 500 band members". Moreover the related document you gave me entitled "Comparison of Federal (1989) (take-it-or-leave-it) Offer (and) Federal (1992) (equivalency) Offer" claims that the 1992 "equivalency" offer represents "substantially increased up-front funding" over the 1989 "take-it-or-leave-it" offer as well as an "over-all increase of $8,479,400". None of these statements are accurate.



The Impact of Inflation



Lubicon settlement proposals are all calculated in 1988 dollars based on actual cost estimates. Federal proposals are all based on 1992 dollars. The documents you presented to me on July 24th treat 1988 and 1992 dollars as basically having the same value, which clearly isn't the case.



In order to produce the $73 million dollar number the documents you presented to me on July 24th add $38.3 million in 1992 dollars from the Federal Government for capital construction (worth about $24.2 million in 1988 dollars), a dubious $12.5 million in 1992 dollars from the Federal Government for commercial and agricultural development (worth at a maximum about $8.6 million in 1988 dollars), $2.5 million in 1992 dollars from the Federal Government for a so-called "incentive to sign" (worth about $1.7 million in 1988 dollars), an un-indexed $5 million from the Provincial Government over a ten year period (worth about $2.3 million in 1988 dollars), a soft $3 million in 1992 dollars which may or may not be available from the Provincial Government for construction of the proposed community shop/vocational training centre (worth at a maximum about $2 million in 1988 dollars), $1 million from the Provincial Government to build a Provincial Government road to provide the Provincial Government with access to the shores and bed of Lubicon Lake ala the Grimshaw Agreement (not included in Lubicon settlement proposals for obvious reasons), and a highly offensive $10.5 million "contribution" supposedly from the Provincial Government which your cover letter describes as "the value of (proposed Lubicon reserve) land at current market prices."



Needless to say these numbers don't add up to the claimed "more than $73 million" any way you cut it, even if one accepts at face value the transparent attempt to pump up the numbers by throwing in things like the cost of the Provincial government road required by the Provincial Government in any case and charging the Lubicon people for our own land.



"Up-Front Funding"



The "substantially increased up-front funding" claimed in the "Comparison" document pertains basically to "socio-economic" or commercial and agricultural development. It claims that the 1989 "take-it-or-leave-it" offer was worth $10,675,0 and that the 1992 "equivalency" offer is worth $12,500,000 -- a supposed increase of $1.8 million.



In fact the 1989 "take-it-or-leave-it" offer didn't provide the claimed $10,675,000 at all but rather:



the interest on a $5 million dollar fund (supposedly to be used by the Lubicon people as "seed" money in applying for normal Government programs and services);



agreement-in-principle for up to a maximum of another $4 million for commercial development (provided that the Lubicons apply to normal Government programs and meet normal program requirements);



up to a maximum of another $500,000 over a 5 year period for "staff support and other resources required" (the actual amount to be determined God knows how);



up to a maximum of another $25,000 for "planning and legal fees to reconfigure (the Lubicon management structure)" (the actual amount again to be determined God knows how);

up to a maximum of $50,000 to "undertake an assessment of (on-reserve) sand and gravel deposits" (the actual amount again determined God knows how);



up to a maximum of $100,000 for a joint Government/Lubicon Committee to study detailed Lubicon agricultural development proposals worth over $18 million;



the interest on a $500,000 fund to cover the cost of the proposed "Trapper's Support Program" (creatively re-titled by Government bureaucrats a "Trapper's Transition Fund");



up to a maximum of another $100,000 to cover academic up-grading and on-the-job training (as determined by a so-called joint Government/ Lubicon "team");



up to a maximum of another $400,000 which might possibly be provided over a three year period, provided that agreement can be achieved on a jointly prepared Government/Lubicon "human resource development program plan", and provided that the Lubicons can successfully negotiate training funds from the Federal Department of Manpower and Immigration based on that jointly prepared "human resource development plan", and provided that the Lubicon people can then match the Government's "up to $400,000" with up to $400,000 of our own.



How one could possibly determine the dollar worth of such gibberish, either in total or "up-front", is anybody's guess.



The Government's 1992 "equivalency" offer is admittedly simpler but hardly more reassuring. It provides $25,000 for each Lubicon somehow determined by the Government to be "eligible to receive socio-economic funds". If there are really 500 eligible Lubicons as claimed by the Lubicons, it says, the result would be a maximum of the $12.5 million used in the "Comparison" document you gave me on July 24th.



However, as the 1992 "equivalency" offer also makes abundantly clear -- dependent upon whatever as yet unspecified criteria might be used by the Federal Government to determine so-called "eligibility" to be counted in the proposed socio-economic development funding formula -- the number of supposedly "eligible" Lubicons could range anywhere from the 7 or less claimed by the Province to be "eligible" a few years ago to the "between 250 and 300" claimed by the Federal Government to be "eligible" last fall in its Alberta Report propaganda piece. Contrary to the impression deliberately created by the documents you presented to me on July 24th, reliable inside Government sources advise us that 300 people or about $7.5 million in 1992 dollars -- worth about $5.1 million in 1988 dollars -- is in fact the number that the Federal Government has in mind).



Thus while it technically isn't possible to assess the value of the 1992 "equivalency" offer with regard to commercial and agricultural development, at least not without additional information about the criteria the Federal Government proposes to use to determine so-called "eligibility", best Lubicon information suggests that the 1992 "equivalency" offer in fact has a value of about $7.5 million in 1992 dollars or about $5.1 million in 1988 dollars -- certainly not something which could be accurately described as "substantially increased up-front funding" over whatever value one might somehow attribute to the socio-economic section of the 1989 "take-it-or-leave-it" offer.



Claimed "Overall Increase"



The Government "Comparison" document calculates the total value of the 1989 "take-it-or-leave-it" offer at $46,539,000 and the total value of the 1992 so-called "equivalency" offer at $55,018,400 -- a claimed overall increase of $8,479,400.



In arriving at these figures the "Comparison" document says that it has adjusted capital construction costs to take inflation into account (which isn't true), is presuming that there are 500 Lubicons "entitled" to be counted for purposes of calculating the $25,000 per capita in economic development monies (although reliable inside Government sources advise that the Government is only prepared to count between 250 and 300 as "entitled"), and that the Government has added another $2.5 million as a so-called "incentive to settle".



Even if one takes these Federal Government numbers at face value, which one clearly cannot do with regard to such things as proposed socio-economic funding, the Federal numbers are comparing 1988 dollars in the so-called "take-it-or-leave-it" offer to 1992 dollars in the so-called "equivalency" offer. When one really adjusts the numbers to take into account the impact of inflation, the so-called "equivalency" offer has a claimed value of only $37,742,622 in 1988 dollars compared to a claimed value of $46,539,000 in 1988 dollars for the so-called "take-it-or-leave-it" offer -- an effective loss of $8,796,378 instead of the claimed overall increase of $8,479,400.





MEMBERSHIP



Although the "Comparison" document conveniently fails to mention it, the 1992 so-called "equivalency" offer returns to both the unacceptable "counted-once rule" (with regard to the socio-economic funding formula) and to the equally unacceptable condition that the Federal Government must "verify who on the Band's membership list are eligible to participate in the adhesion". The agreement made in December of 1988, which was predictably not spelled out very clearly in the so-called "take-it-or-leave-it" offer but neither is it denied, provided that all Lubicons on the Lubicon determined membership list are entitled to adhere, and that everybody who adheres thereby becomes entitled to both the full benefits of the settlement agreement and of treaty status. In this regard the so-called "equivalency" offer represents significant regression over the progress made during negotiations in December of 1988.





CAPITAL CONSTRUCTION



Excepting only some relatively minor, seemingly almost inadvertent differences the capital construction section of the supposedly new "equivalency" offer is essentially the same as so-called Federal books one and two, which were essentially the same as the so-called "take-it-or-leave-it" offer.



For example Program Planning and Management has inexplicably decreased $5,000 from $1,585,000 to $1,580,000.



Inflation adjustment has decreased over $650,000 from $3,680,767 to $3,019,100.



Instead of simply deleting development of a natural gas utility, as was done in Federal books one and two, the supposedly new "equivalency" offer indicates that development of a natural gas utility is "subject to further discussions". (As the Lubicon people have pointed out many times to seemingly uncomprehending Federal negotiators, "subject to further discussions" is not an "offer".)



Regarding construction of a combined community shop/vocational training centre, the supposedly new "equivalency" offer no longer attaches a letter from Regional Indian Affairs Director General Gary Wouters to Lubicon lawyer Bob Sachs saying that the Province is considering a proposal from an unknown source -- certainly not the Lubicon people -- to contribute up to a million dollars towards the addition of an industrial arts shop on the proposed high school. Instead it says cryptically that "Options may exist to incorporate these facilities into the proposed school design to enhance the usage of both facilities". Presumably the latter is just a deliberately less explicit way of saying the former. In neither case do we have a serious proposal for construction of the absolutely essential combined community shop/vocational training centre.



On water supply we were disappointed to see that the supposedly new "equivalency" offer repeats earlier rejected Federal proposals to haul water from Cadotte or Joker Lake.





SOCIO-ECONOMIC DEVELOPMENT



Even assuming that one accepts without question the highly dubious $10,675,000 socio-economic (commercial and agricultural development) number claimed for the "take-it-or-leave-it" offer, and the equally dubious $12,500,000 number used in the supposedly new "equivalency" offer, just the impact of inflation reduces the claimed $12.5 million in 1992 dollars to only $8,575,000 in 1988 dollars -- an effective loss of over $2 million from the $10,675,000 claimed for the "take-it-or-leave-it" offer.



In addition there are a number of significant differences between the socio-economic development proposals discussed contained in the so-called "equivalency" offer and proposals tabled with the Lubicon people by representatives of the Federal Government following our June 5th meeting.



Proposals tabled with the Lubicons by representatives of the Federal Government following our June 5th meeting were for a flat $20 million in up-front 1988 dollars not tied to a per capita formula. The proposal contained in the so-called "equivalency" offer is $25,000 per capita in 1992 dollars for each Lubicon somehow determined by the Federal Government to be entitled to be counted, for a maximum of $8,575,000 in 1988 dollars from the Federal Government, plus an additional un-indexed $5 million over a ten year period or $2,325,500 in 1988 dollars from the Provincial Government.



Proposals tabled with the Lubicons by representatives of the Federal Government following our June 5th meeting also were to invest the $20 million in up-front 1988 dollars ($29 million in 1992 dollars) at an estimated 10% return and then draw on it annually over a 9 year period in line with Lubicon cash flow projections. Using this approach it would be possible for the Lubicons to cover proposed commercial and agricultural developments worth over $23 million during the course of a 9 year development period.



However covering proposed Lubicon commercial and agricultural developments over a 9 year period or any other period is not possible with the approach contained in the so-called new "equivalency" offer. Even if one were to assume that the Lubicons would receive the maximum possible amount under the per capita formula of $8,575,000 in 1988 dollars from the Federal Government, and the Provincial Government actually provided the $2,325,500 in 1988 dollars up-front instead of at the rate of an un-indexed $500,000 per year for a period of ten years, the proposals contained in the supposedly new "equivalency" offer would only provide the Lubicons with funds to cover the costs of the first three of a projected 9 year commercial and agricultural development period.



Interestingly the concluding paragraphs on the socio-economic section of the supposedly new "equivalency" offer speculate about what would happen if the Federal Government somehow determines that there are only 300 Lubicons entitled to be counted in the $25,000 per capita socio-economic formula, generating only $7.5 million in 1992 dollars instead of the $12.5 million used in the "Comparison" document obviously for propaganda purposes. In this case, it says, the proposed socio-economic fund would reach a deficit position in year 6 of the proposed 9 year commercial and agricultural development period. Actually $7.5 million in 1992 dollars is only $5,145,000 in 1988 dollars and the proposed fund would be fully expended at the end of the second year of a proposed 9 year commercial and agricultural development period.



The supposedly new "equivalency" offer then goes on to assert that a loss of $5 million ($12.5 to $7.5) resulting from the Government only counting 300 out of 500 Lubicons to be entitled to be counted for determining socio-economic funding "could be compensated for if enhanced by the $2.5 million compensation floor referred to by the Minister", which, it says, is described in a note on page 1 of the supposedly new "equivalency" offer. We would appreciate an explanation of how a $5 million dollar loss can be made up with a $2.5 million "compensation floor". There is no descriptive note on page 1 of the supposedly new "equivalency" offer.



"If the Federal offer were reduced because of a reduction in the population figures from 500 to 300", the supposedly new "equivalency" offer says, "one could argue that the band's economic plan should be likewise reduced from $23.1 million (in 1988 dollars) to $13.9 million" ($7.5 million in 1992 dollars worth about $5.1 million in 1988 dollars from the Federal Government; $5 million in un-indexed dollars to be provided by the Provincial Government over a ten year period worth about $2.3 million in 1988 dollars; the remaining $1.4 to $6.5 million being another mystery we'd like explained).



We would also like to know how it would be possible for us to reduce the cost of socio-economic plans designed to support a population of 500 people just because the Federal Government somehow determines that 200 of our people supposedly aren't entitled to be counted for purposes of calculating the Federal Government's proposed $25,000 per capita socio-economic development funding formula.



Lastly the Federal Government's supposedly new "equivalency" offer says that "the inflationary factor" between Lubicon proposals worth $23.1 million in 1988 dollars and Federal and Provincial proposals worth about $7.4 million in 1988 dollars ($5.1 million from the Federal Government and $2.3 million from the Provincial Government) can somehow be offset "with earned interest" resulting from "advancing the Federal/Provincial resources for socio-economic development up-front". Aside from noting that the Provincial Government is not proposing to advance "resources for socio-economic development up-front", we would like an explanation in plain English as to exactly what this seeming gobbledygook means.





INDEMNIFICATION



Clause 3.3 of Section I of the Federal Government's supposed response to Lubicon settlement proposals (areas for further discussion) indicates that "a process will need to be developed whereby the Band will indemnify Canada against future treaty land claims or severalty claims by all Band members who are Indians but who fail to provide (specified) elections, releases and indemnities..." We disagree and consider this proposed "process" to be a clear abdication of the Federal Government's exclusive Constitutional responsibility for dealing with aboriginal lands and the rights of aboriginal people.



We can only be responsible for those people we represent. Any Lubicons who for whatever reasons aren't included in a settlement agreement may well retain a legitimate cause of legal action against the Government of Canada. But the Lubicons who do participate in any settlement agreement cannot and should not be expected to indemnify the Federal Government against the consequences of the Federal Government failing to fully meet its Constitutional responsibilities.





COMPENSATION/ARBITRATION



The Compensation/Arbitration section of the Federal Government's supposedly new "equivalency" offer claims that "Canada has paid a level for negotiations significantly higher than any other band in Canada, an amount of $1.5 million plus another $250,000". This statement is not true with regard to either the amount of monies paid to support negotiations elsewhere or with regard to monies paid to the Lubicons supposedly to support negotiations.



According to public information the amount of money paid by 1990 to support Dene/Metis negotiations in the NWT, for example, was $40 million. And the money provided to the Lubicons by the Federal Government was not to support negotiations but to reimburse the cost of legal action by the Lubicons which the Lubicons were forced to take after the Government of Canada utterly failed to meet its legal obligations to the Lubicon people under the Canadian Constitution.



Specifically the $1.5 million was provided basically to repay a bank loan pursuant to a recommendation by Federal Inquiry Officer E. Davie Fulton who concluded, rightly, that the Lubicons had no reasonable alternative but to pursue legal action against the Government of Canada. $51,000 of the $250,000 (actually $242,000) was provided to pay accumulating interest on the involved bank loan while Mr. Fulton sought to obtain funds from the Federal Government to repay the necessary bank loan. And the remaining $191,000 was used to reimburse the costs of technical experts required to support the necessary legal action (albeit their work has also been used to support negotiations).



Lastly the Federal Government's supposedly new "equivalency" offer claims agreement on July 8, 1992 to arbitrate compensation under the Commercial Arbitration Act. There was no such agreement between the Lubicon people and the Government of Canada on July 8th or at any other time.



Instead there was agreement between lawyers for both sides to recommend arbitration of compensation under the Commercial Arbitration Act to their respective clients. Lubicon lawyers did so but the Lubicon people have a number of serious questions about provisions of the Commercial Arbitration Act which will have to be satisfactorily resolved before agreement will be possible.





I regret to say that we do not consider the supposedly new "equivalency" offer to be either fair or just. While minor, essentially cosmetic changes have been made in Federal Government proposals they remain basically the same as those contained in the "take-it-or-leave-it" offer tabled in January of 1989. There is still no adequate provision for the Lubicon people to once again achieve social, political and economic self-sufficiency.



Moreover we are distressed by the demonstrably false claims made about the supposedly new "equivalency" offer and over the continuing numbers games it contains. It is frankly very hard not to conclude that the Federal Government is not sincere about negotiating a settlement of Lubicon land rights and is only seeking to maintain the pretense of sincere negotiations in order to deflect criticism and buy time until the Lubicon society deteriorates to the point where the Lubicon people can no longer fight for our rights. This is a strategy which serves neither your Government nor the Lubicon people well and I hope it will be reconsidered.







Sincerely,



Bernard Ominayak, Chief
Lubicon Lake Indian Nation