The Robinson Treaties and Renegotiated Payments

 

There was a news item yesterday of great importance both to the Anishinaabe signatories and descendants of the Robinson-Huron and Robinson-Superior Treaties of 1850 as well as the people of Ontario.  There has been litigation underway for a good many years regarding renegotiating payments that have not changed since 1875. A ruling in 2018 that the Crown had a mandatory and reviewable obligation to increase the treaties annuities when economic circumstances warranted was appealed by the Ontario government and was on its way to the Supreme Court of Canada when suddenly it appears that the Ontario government has decided to enter negotiations after all to determine a fair sharing of resource revenues from their territories. 

 

This is a complicated and longstanding issue but briefly in 1850 the Anishinaabe of the upper Great Lakes region signed two historic Treaties with the Crown, the Robinson Huron Treaty and Robinson Superior Treaty, that provided for a land cession of a vast territory in Northern Ontario. The Crown paid a lump sum up front and promised to pay a perpetual annuity to the Anishinaabe, to be increased subject to certain conditions. The annuity has not been increased since 1875 when it was set at $4 per person. The nature of the annuity and the conditions under which increases are to be made were the subject of this litigation and will now be the focus of negotiations with Ontario and Canada.  As well, the increases are expected to be tied to resource-based revenues.

 

There are really two calculations that should be made here.  The first is what the resource-based revenues for the Treaty areas would have been between 1875 and 2022 if some type of reasonable pattern of increases had been made.  The second, is what the sharing arrangement for future resource-based revenues should be.  These will be interesting and complicated problems – especially the redress of past underpayments.  It is a little remembered fact that resource-based revenues from 1867 to 1920 were a significant proportion of Ontario’s provincial government revenues averaging about 20 percent of total revenues.  Indeed, forestry and mining fees for the Ontario government were the equivalent of oil for Alberta today.  Today, these revenues amount to at best several hundred million dollars a year and the question going forward will be what proportion should accrue to the Robinson Huron and Robinson Superior communities - something that will inevitably be decided by lawyers and accountants though one hopes both sides will have also enlisted assistance from economists - always the helping profession.

 

The first question is of more interest to an economic historian.  What would the per capita payment look like today if some pattern of reasonable increase had occurred in every year since 1875?  Suppose the payment had increased each year by the rate of inflation?  If one uses the CPI for Canada from 1870 to 2020 from the Jorda-Schularick-Taylor Macro Database and calculates annual inflation and takes the average, one gets an average annual inflation rate of 2.4 percent for that 150-year period.  If one applies a 2.4 percent growth rate to the base amount of 4 dollars and works forward (y^x where y is 1.024 and x the number of years from 1875 to 2022) then that 4-dollar amount in 1875 would be about $134 dollars per capita today.  The total payment in 2022 using this per capita number would need to be multiplied by population of the affected Treaty areas.  By way of “an estimate” according to Statistics Canada, the total population by Aboriginal Ancestry in private households in the Robinson Superior Treaty Area in 2016 was 3,340 while for Robinson-Huron it was 7,060 making for a total of 10,400. That would make the payment in 2022 alone about $1.394 million dollars.  Doing such a calculation backwards to 1875 would result in a lump sum settlement payment in the hundreds of millions of dollars if not more based on what the population estimate for previous years was.  Naturally, the population estimate both in the past, currently and going forward will be of extreme importance.

 

Of course, this is only one approach and a crude one at that to estimating the past payments.  Indeed, there will be more precise ways of calculating the past payments based on what the actual resource revenues were each year which governments invariably must have as well as the actual population receiving the $4 annually which the provincial and federal governments must have buried away somewhere in their finance ministries.  So, this is a necessary step for the government and people of Canada to undertake given the historic injustice of keeping the payments frozen for a century and a half.  Hopefully, the negotiations will not take another century.  

 

 

Reflections on a Town Hall: Trudeau in Thunder Bay

Well, in the wake of the release of the 2019 Budget, Prime Minister Trudeau is off to Thunder Bay where he will be hosting a Town Hall on the campus grounds of Lakehead University on Friday March 22nd.  Indeed, the preparations for his arrival are already underway as the grounds of the C.J. Saunders Fieldhouse where the event will occur are being swept and tidied up from the accumulated grit of a harsh winter.  This is apparently Trudeau’s first visit to Thunder Bay since 2016 which is a signal that the election campaign is already underway.  The festivities get underway at 7 pm (but if you want a front row seat you need to register and arrive by 5:00 pm).

Thunder Bay can be considered a relatively politically safe place for the federal Liberals to have a Town Hall given the two ridings have returned mainly Liberals to Ottawa for nearly 100 years.  Thunder Bay voters are actually very conservative voters in the sense that they dislike change and always do the same thing – that is, return Liberals to Ottawa.  The only way they deviate from their inherent conservatism is to actually vote Conservative. Indeed, the last federal Conservative party politician who was elected was Robert Manion, who if memory serves me correctly, was around in the 1930s.  Of course, there was MP Joe Commuzzi circa 2007 – who started as a Liberal but then switched to the Conservatives and served as a Minister– but he was not elected as a Conservative so my initial point stands.

So what issues will Prime Minister Trudeau have to face in Thunder Bay? Well, the audience is likely to be filled with gushing supporters who will hang on his every word and engage in numerous standing ovations despite the recent disillusionment over the SNC-Lavalin-Raybould Affair.  Indeed, the Prime Minister is probably looking forward to an evening’s relief from the stress and acrimony of Ottawa.  There is nonetheless the potential for some fireworks and charged questions on a number of topics should the Town Hall decide to deviate from what is likely to be a large pep rally.  For those who might be interested, here are the parameters of just two interesting question areas.

What is the Federal Government going to do to help Thunder Bay address the December 2018 report by the Office of the Independent Police Review Director on relations between Indigenous People and the Thunder Bay Police Service? It is true that the local police are a municipal function and municipalities are creatures of the provinces, but it remains that First Nations and Indigenous peoples are a very important responsibility for the Federal government.  The recommendations for the Thunder Bay Police Service are going to involve a substantial increase in expenditures on an already stretched municipal tax base.  Is there any real federal financial assistance coming or is Thunder Bay on its own in dealing with this? Indeed, given that Thunder Bay is a regional centre for health and education services for area First Nations, what can the federal government do to assist in this regard?

As well, what is the Federal Government doing to actually implement its own growth plan for the  Northern Ontario economy?  All of us are familiar with the 2011 Northern Growth Plan released by the Ontario Liberal government which, over the course of the next 25 years, was supposed to assist the North in reversing its economic decline.  Well after five years of the provincial Northern Growth Plan – the plan to end all plans – the population of the North remains flat, employment is down and the value of new investment is also down.  

This lacklustre result has not deterred the Federal government from announcing its own Prosperity and Growth Strategy for Northern Ontario in April 2018 with twelve areas of action.  However, since then there really has not been much to be seen and heard as to specifics of what this strategy entails, aside from mentioning the strategy whenever there is an announcement of federal money from FEDNOR as was the case in Sudbury in December 2018.  Aside from this, there is little to be found in a Google News search when the term "Prosperity and Growth Strategy for Northern Ontario" is typed in.  So, is there an actual Federal action strategy for Northern Ontario or is it just another election marketing ploy?

I guess we will have to wait until tomorrow night to see if we learn anything new.  I for one expect there will indeed be some entertainment involved in this Town Hall Meeting.  Who knows, maybe we'll even get yet another announcement of federal support and commitment for the Ring of Fire? At the very least, in an election year one might expect some federal infrastructure dollars to finish four-laning the highway to Nipigon.