Coastal GasLink estimates $115-million in payments to elected Wet’suwet’en band councils over 25 years

Open this photo in gallery:

Coastal GasLink estimates that its B.C. pipeline project would pump $115-million during a 25-year period to five elected Wet’suwet’en band councils and generate more than $60-million in construction contracts for local Indigenous businesses in the region.

Five elected Wet’suwet’en councils along the controversial pipeline route would receive the cash distributions totalling $4.6-million a year, also known as “annual legacy payments” that would last a quarter-century. The five councils have supported the pipeline.

Those estimates are set out in a letter sent in 2014 by Coastal GasLink to the Office of the Wet’suwet’en, a non-profit society governed by hereditary chiefs.

Coastal GasLink posted a redacted version of the eight-page letter on its website last month, blacking out one entire page and portions of two other pages. The Globe and Mail has obtained an unredacted copy, marked confidential, revealing details under a section titled “Economic opportunities available to the Wet’suwet’en people from Coastal GasLink.”

Hereditary leaders and environmental groups have characterized the elected Wet’suwet’en councils’ agreements – the financial size of which have been kept secret for years – as a strategy by Coastal GasLink to buy the support of Indigenous people.

A group of Wet’suwet’en hereditary chiefs oppose the $6.6-billion pipeline project, saying they have jurisdiction over their unceded territory, not elected band councils on federal reserves under the Indian Act.

Since Feb. 6, protests and blockades have spread across Canada in support of Wet’suwet’en hereditary chiefs who are fighting Coastal GasLink’s plan to build a natural gas pipeline from northeast B.C. to the coast to supply LNG Canada’s $18-billion export terminal under construction in Kitimat.

The 20 elected band councils along the route, including the five elected Wet’suwet’en councils, have reached impact-benefit agreements with Coastal GasLink, the terms of which are confidential.

On March 1, hereditary chiefs announced a tentative agreement with the federal and B.C. governments to expedite negotiations to implement rights and title for the Wet’suwet’en Nation over unceded traditional territory and recognize the hereditary governance system. A resolution to the pipeline dispute, however, was not reached.

The Wet’suwet’en Nation comprises five clans, under which there are 13 house groups, each with a hereditary head chief position (four are currently vacant). One house chief has taken a neutral position on the pipeline project. Eight hereditary house chiefs spanning the five clans are opposed to Coastal GasLink.

Clan meetings to discuss rights and title are being held this week, including one gathering on Friday in Witset, B.C., and another on Saturday in Smithers, B.C.

The eventual payouts to elected Wet’suwet’en band councils could turn out to be much higher, said the letter signed by Rick Gateman, who served as Coastal GasLink’s president from 2012 until early 2019.

“It is not unusual for LNG facilities to continue for 50 years or more,” he wrote. “This could effectively double the Wet’suwet’en’s revenue stream to $230-million. As these payments are contractual obligations in sums certain, they can be used to finance long-term community infrastructure needs.”

Mr. Gateman said in the letter the five elected Wet’suwet’en band councils along the route that signed project agreements stand to reap a total of $10-million in other cash. Coastal GasLink has said that, under the provincial environmental-assessment process, it was not required to negotiate with Hagwilget, a sixth Wet’suwet’en community that is located farther away from the pipeline corridor.

Indigenous contracting opportunities are forecast to surpass $60-million and “could be substantially higher, based on the capability of the companies available to complete the work in Wet’suwet’en territory,” Mr. Gateman wrote.

In response to The Globe’s queries about Mr. Gateman’s letter, Coastal GasLink spokesman Terry Cunha replied: “To ensure we respect the commitment we have with the communities, along with our legal responsibility, we cannot discuss the contents of any of our benefit agreements.”

Mr. Cunha said the pipeline is on track for completion by the end of 2023. “We currently have over 1,200 individuals working directly along the project route with over 350 local Indigenous workers, including Wet’suwet’en members,” he said in an e-mail.

About 190 kilometres of the 670-kilometre pipeline route cross the Wet’suwet’en Nation’s traditional territory.

A copy of the uncensored letter is an exhibit from a legal case related to Coastal GasLink, entered in court last year to supplement an affidavit signed by Mike Ridsdale, the Office of the Wet’suwet’en’s environmental assessment co-ordinator. Mr. Ridsdale’s affidavit also included a copy of a letter that he sent to the BC Oil and Gas Commission in November, 2018, saying hereditary chiefs oppose all pipeline routes through their territory.

Mr. Gateman’s letter began by acknowledging previous discussions with hereditary chiefs in 2014 about an alternative route, known as the McDonnell Lake option. Coastal GasLink made that portion of the letter public on its website last month.

In a Dec. 31, 2019, judgment related to the pipeline, Justice Marguerite Church of the B.C. Supreme Court noted the Office of the Wet’suwet’en had proposed the McDonnell Lake option.

Coastal GasLink ultimately rejected the option for reasons that included up to $800-million in increased costs, greater adverse environmental impacts, a one-year delay and the desire to avoid urban areas.

The McDonnell Lake option would have followed the route of an existing natural gas pipeline while still crossing portions of Wet’suwet’en territory. But it would have avoided the Morice River Bridge area, where Wet’suwet’en members opposed to the pipeline have maintained a camp since 2010.

On Feb. 14, Coastal GasLink issued a statement outlining its reasons for rejecting the alternative route, including that it would involve eight additional major river crossings and that some sections would not be able to accommodate a 48-inch-diameter pipeline. The existing natural gas pipeline in the region is 10 inches in diameter.

The past four weeks have seen protests in support of Wet’suwet’en hereditary chiefs, but a group of business, Indigenous and civic leaders from across the country – called Confidence in Canada – issued a joint statement on Thursday to say the voices backing Coastal GasLink are growing louder.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.