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Moose Cree Chief Norm Hardisty Jr., left, and Ontario Power Generation’s Mike Martelli chat near the Smoky Falls Generating Station.Josh O’Kane/The Globe and Mail

This is part of a series looking at infrastructure projects designed to create economic opportunities in the North.

Halfway between Timmins and James Bay, it's below zero and already snowing in October. The weather, though, does little to stop 1,100 workers stationed here. Men and women, professionals and apprentices – including many First Nations people – have been working year-round since 2010 to lay the foundation to power Northern Ontario for future generations.

If all goes according to plan, by 2015, they will double the capacity of the four dams that make up the Lower Mattagami River Hydroelectric Complex, a $2.6-billion project that will add 438 megawatts to the Northern Ontario grid – enough peak power for at least 400,000 homes.

In Smoky Falls, Ontario Power Generation is refurbishing three hydroelectic stations and completely replacing a fourth along the Mattagami River, which flows north into James Bay. It's a long play on sustainable energy infrastructure in Canada's North: By building onto existing stations, the project will avoid disrupting additional watersheds, minimizing its environmental impact while maximizing output.

But the project recognizes more than just the land that surrounds it; it also pays long-overdue respect to some of the first people who lived there. In a landmark partnership, the Moose Cree First Nation has a 25-per-cent stake in the project that will see them share in its revenue for generations.

"There is so much to the agreement," says Moose Cree Chief Norm Hardisty Jr. His band's reserve is north of the project in Moose Factory, Ont. "Certainly, it's not just today we're dealing with. We're just not looking at this generation. Moving forward, we're already prepared to have a trust and looking to invest most of the revenue we will be generating."

The Lower Mattagami refurbishment is "more than just a way to build capacity without flooding more lands for headponds," says Mike Martelli, OPG's senior vice-president of hydro-thermal operations. Partnering with the Moose Cree has "resulted in an improvement in the capacity of the First Nation," he says, through revenue sharing, skills training, employment and subcontracting opportunities.

This is not the first First Nation-utility partnership of its kind, but it is the largest. In 2009, OPG began to operate the 12 MW Lac Seul Station in a 25-per-cent partnership with the Lac Seul First Nation, northeast of Dryden, Ont. The Lower Mattagami project will add 36 times as much capacity as Lac Seul. The capacity of a hydroelectric project depends on two characteristics of the generating station: the head, or difference in height between water intake and the turbine, and flow, the amount of water the station can take in. These are ideal at Lower Mattagami, says Mr. Martelli, an engineer who's spent most of his career working with Ontario's hydroelectric generating stations; therefore, he says, it makes sense to build on the existing stations' capacities. (Smoky Falls, for instance, has an excellent head differential of 40 metres.)

The structure of these hydroelectric stations can last more than 100 years; the Decew Falls I Generating Station near St. Catharines, for instance, went into service in 1898.

While three of the generating stations – Harmon, Kipling and Little Long – will receive one additional generating unit each, the original Smoky Falls structure is being completely replaced, with a new three-unit station being built adjacent to it. This will bring the total generating capacity at Lower Mattagami to 924 megawatts from 486 megawatts.

Smoky Falls was built in the 1920s by Spruce Falls Power and Paper Co. to supply power for its Kapuskasing pulp and paper mill, which for a time supplied newsprint to its longtime co-owner, The New York Times. Thirty years later, Ontario Hydro built its own three stations near Smoky Falls: Harmon and Kipling stations downstream and Little Long Station upstream.

Ontario Hydro agreed to buy the Smoky Falls station at the end of the 1980s, and began to look into expanding the capacity of all four stations, holding environmental hearings and consultations with First Nations on whose traditional lands the project would use – the Moose Cree.

Bob Rae's NDP government gave the project a go-ahead in 1994 without a formal environmental review, but the utility eventually backed down; not only did consultations with the Moose Cree break down, but the utility also took a $280-million writeoff in 1996 in drastically reducing the project's potential scope.

"We didn't really know each other well at the time," Chief Hardisty says. While the utility did try to get the band's consent, "we were given an offer, and we said no."

In 2005, the utility – then named Ontario Power Generation after a restructuring under premier Mike Harris – came back to the table with the Moose Cree. Over time, an agreement was drafted that Chief Hardisty says takes into account the futures of both the First Nation and the land the project sits on. This includes agreements on environmental impact goals, contracts to work on the project and a 25-per-cent stake in the project, which will bring them a share of the profits for the life of the stations.

This stake is a central part of the reconciliation for past harm done to the First Nation throughout the Lower Mattagami facilities' history – the dams were built on traditional Moose Cree territory without consultation, and treaty rights were ignored.

While a small group of Moose Cree from the Kapuskasing area have publicly called the terms of reconciliation insufficient, a majority of Moose Cree members voted in favour of the agreement in 2009, making it legally binding.

The non-financial benefits are also extensive for First Nations, including Moose Cree members. As part of the agreement, the project promised 200 person years of employment to First Nations workers – which OPG says has now surpassed 350 – as well as some crucial skills training.

"It's great to see our people get a chance to work and get into the trades," says Christopher Gangon, a 25-year-old Moose Cree member working at Lower Mattagami as an electrical apprentice. And Karen McKay, 45, got experience driving a variety of high-load trucks. "It really opened a lot of doors with the experience I got here."

The stations will each go into service individually once construction is complete. The first station, Little Long, is undergoing a series of final tests and is expected to be in service by the end of the year.

Some not happy with partnership

Not all Moose Cree members are happy with the OPG partnership. A group representing about 200 aboriginal people, whose ancestors lived in the Smoky Falls area and who are officially Moose Cree members, say their voices have been historically neglected by the Moose Cree, and that its partnership with OPG on the Lower Mattagami project is the straw that broke the camel's back.

The group, which calls itself the Kapuskasing Cree First Nation, is based primarily in Kapuskasing, Ont., about 250 kilometres from Moose Cree's headquarters in Moose Factory. The group, while not a registered band, believes it was arbitrarily assigned to the Moose Cree while living in the bush in the mid-20th century, and it does not want to affiliate with the Moose Cree.

The group has filed a statement of claim with the Ontario Superior Court of Justice in Cochrane, Ont., and plans to fight for a representation order to be able to litigate as a collective – with the aim to some day become its own band, as well as to declare itself a stakeholder in the Lower Mattagami project. While the members don't necessarily want to halt the project – some are even employed there – they want a separate financial stake, at least equal to the Moose Cree's, as they believe the reconciliation and environmental terms of the agreement are insufficient.

"Fifty years ago, the damage was done. We want to be reassured it won't happen again," says Gaius Napash, the group's chief.

The members believe that the funds used for the Moose Cree's stake in the Lower Mattagami project will not sufficiently flow to their families, who were removed from the bush in the 1960s and 70s; Chief Napash lived there until he was a teenager. Their homes were destroyed, and they claim that their traditional trapping and hunting grounds were damaged, and that gravesites were lost to the original project, including in the headpond of Little Long Station.

With their stake, the group hopes to establish a reserve near the project, where their ancestors lived until a railroad to the Smoky Falls dam was removed 40 years ago.

"We just want a place that we can call home," says Archie Sutherland, the group's deputy chief.

But Chief Hardisty of the Moose Cree says that the group was duly consulted before the agreement was legally ratified by the band's membership, and that they benefit from the partnership as equal Moose Cree members. "Any project in the Moose Cree Traditional Territory is taken as a collective," Chief Hardisty says. "What we have today is a collective agreement that represents all [of our] people."