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 (yx 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.
