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Grace Islet is a small island in Salt Spring Island's Ganges Harbour seen here December 10, 2014 where an Edmonton businessman is constructing a home on a B.C. First Nation burial ground.

John Lehmann/The Globe and Mail

B.C. has finalized its deal to buy Grace Islet, with the lion's share of the purchase price going to the former owner who had planned to build a retirement home on the picturesque site.

The province announced Monday it has put up $5.45-million for the property – in Ganges Harbour off Saltspring Island in the Gulf Islands – consisting of $850,000 for the land and $4.6-million as a settlement with the previous landowner.

That amount represents "costs incurred over the past two decades by the landowner and his lost opportunity for future enjoyment of the property," the province said in a statement Monday. Costs also reflect the expense of putting in utilities and materials for a "high-end house," the statement added.

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The province announced its plans to buy the island in January but had not disclosed a price. Reached after months of controversy, the deal was struck to protect the ancient aboriginal cemetery that covers the property.

While the deal is expected to end the conflict over Grace Islet, other sites could trigger similar disputes.

A group of lawyers, archeologists and anthropologists have urged the province to update its heritage laws to reflect the cultural importance of burial sites to First Nations communities.

Under the Grace Islet agreement, the Nature Conservancy of Canada holds title to the land and will work with local First Nations and the province to develop remediation and conservation plans. Those plans are expected to remove all evidence of recent construction from the site.

The former landowner, Barry Slawsky, lives in Edmonton and bought Grace Islet in 1990. At the time, the site was known to have archeological importance and had been registered as an archeological site in 1966.

But it was later zoned as residential land and Mr. Slawsky bought it with that zoning in place.

In the summer of 2006, kayakers discovered ancient human skeletal remains on Grace Islet, leading the province to commission an archaeological impact assessment in 2010 that identified 15 rock features that may be burial cairns.

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Mr. Slawsky obtained a building permit in 2011. His lawyer told The Globe and Mail that the provincial archeology branch approved the building plans, which were designed to protect the burial cairns.

But as construction went on, the uproar grew.

There was talk of legal action and protests. In December, construction stopped and in January, the province announced a deal.

The agreement was the 12th time since the 1970s that B.C. has purchased land to settle a conflict over what the law deems to be of archeological value.

With a report from Justine Hunter in Victoria

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