Ask almost any Montreal lawyer about the Quebec government’s $80 billion plan for future development of the northern two-thirds of the province, and inevitably he or she will whip out a map and a pointer. A geography lesson follows: The targeted area, north of the 49th parallel, is twice the size of France, extending nearly to the Arctic Circle; it encompasses vast areas of pristine boreal forest and tundra, with neither roads nor railways; and the metal ore and diamond deposits are situated within lands controlled by the Cree or the Inuit, or claimed by the Innu and the Naskape.

Plan Nord, the development plan implemented by the previous Liberal Party government, promised to triple the province’s mining output over the next 25 years by pouring public seed money into infrastructure and by establishing a regulatory fast-track for mining and infrastructure projects. Not surprisingly, the plan was warmly adopted by the legal community: Under it, a billion dollars in new business was projected to flow to law, accounting, and engineering firms in Montreal over the next quarter-century. Quebec’s general election in September changed that calculation slightly. While the new provincial government formed by the Parti Québécois has expressed support for development in the north, its resources minister said in October that Plan Nord will now have to be rethought. Royalty rates for natural resources are likely to rise.

But the political uncertainties and logistical obstacles haven’t stopped mining companies from coming in. Among them are India’s Tata Steel Limited, Canada’s Goldcorp Inc., Luxembourg’s ArcelorMittal S.A., Switzerland’s Xstrata plc, and others. They’re drawn by Quebec’s major undeveloped deposits of diamonds and gold as well as the Labrador Trough, a 1,000-mile-long, 100-mile-wide iron ore deposit that is among the richest in the world.

Once on the ground, those companies are finding that what really counts in Quebec’s north are relationships with the Cree, the Inuit, and the Innu. Recent treaties and laws have shifted control over future development from the provincial government to the province’s 33,000 native peoples, known in Canada as First Nations. The aboriginal groups have tapped sophisticated counsel to represent their interests. Gowling Lafleur Henderson has advised the 16,000-member Cree’s central authority in that nation’s quest for greater control over its territory, and has worked on two model agreements with mining companies. Two Quebec regional corporate firms, Cain Lamarre Casgrain Wells and BCF, have won mandates to represent the Innu, a 16,000-member group with unresolved claims over northeast Quebec and western Labrador, in four other benefits agreements. Opposite them, representing the mining companies, are lawyers from Fraser Milner Casgrain (FMC), Fasken Martineau DuMoulin, Heenan Blaikie, and others. (The 10,000-member Inuit, for their part, have mostly looked to their longtime outside solo counsel and in-house counsel.)

The aboriginal peoples of northern Quebec are using their new leverage to strike profit-sharing and benefits agreements. In some cases they can make or break a deal. The deals they have reached are expected to steer billions of dollars in revenues to the groups while protecting their hunting and fishing lands and waterways. "You’ve got high prices for ores, high demand from China and Asia," says Stikeman Elliott’s Erik Richer La Flèche, cohead of the practice group that advises clients on collaborative projects between public sector authorities and private investors. "All of a sudden First Nations are settling land claims. You’ve got second- and third-generation college-educated First Nations negotiators who are looking at economic development in a new way."

The three largest groups, the Cree, the Inuit, and the Innu, differ greatly in culture, history, and political organization—and, importantly, in their historic relationship with the provincial and federal governments. The Cree, whose rights to lands north of the 49th parallel are recognized by treaty and expanded via subsequent agreements, still hunt and trap moose, caribou, and geese in traditional ways. For jobs and income, however, they rely increasingly on the power and mining sectors. The Inuit, who have traditionally lived at the edge of the sea ice as hunters and fishermen, likewise now have a growing stake in infrastructure and mine developments in Nunavik, their recognized territory north of the 55th parallel.

The Cree and Inuit are in a stronger negotiating position vis-à-vis development than the Innu, who claim as ancestral hunting and fishing lands the northeastern region known as Côte-Nord. Quebec has not signed a land treaty with the Innu, although in the past decade four Innu communities have reached preliminary land rights agreements with the province.

To add to the complexity, some areas, particularly around the Labrador Trough, are subject to overlapping land claims. "It’s something I have to tackle on many matters," says Ann Bigué, an aboriginal law partner who joined FMC in 2010 after two decades at McCarthy Tétrault and a stint at regional firm Lavery, de Billy.

Beyond knowledge of treaties, Quebec’s aboriginal law specialists have cultivated long relationships with the First Nations. They are familiar with local cultural norms. For instance, "You’ve got to be sensitive to the hunting season," explains Bigué. Among the Cree, work stops for moose hunting in the fall, and for goose hunting in the spring. "It really is a time when people will not be available for meetings," Bigué says. Likewise, she adds, "If you have to break the ice to ship materials to a development in Inuit territory, for instance, they are very sensitive to this. They see the ice as land."

That kind of deference to aboriginal culture in Montreal’s offices and boardrooms is relatively recent. It is in large part due to a game-changing battle over development in the early 1970s waged by the Cree and the Inuit with the help of a Montreal lawyer, James O’Reilly. The clash began when the public utility Hydro-Québec, without consulting the two groups, broke ground on a giant hydroelectric dam near James Bay, in territory claimed as ancestral land by both.

In 1972 O’Reilly was a lawyer at Martineau Walker (a predecessor of Fasken Martineau), which represented the entity developing the dam. But when the Cree asked him to represent them in fighting the project, O’Reilly left the firm. He’s been representing the Cree, and more recently the Innu and other groups across Canada, ever since; he has mentored a generation of lawyers at his firm, now known as O’Reilly & Associés, who have gone on to represent the aboriginal groups.

With O’Reilly’s help, the Cree and the Inuit won an injunction in 1973 that blocked the dam’s construction. The injunction was overturned, and the dam eventually built; but the court’s initial grant of the injunction led to intensive negotiations in 1974–75 between the Cree, the Inuit, Canada, and Quebec. The result, negotiated with O’Reilly’s help, was the first modern land claims treaty in Canada, formalized in a 450-page, 30-chapter behemoth known as the James Bay and Northern Quebec Agreement. "We lost that battle at [Canada's] Supreme Court," O’Reilly recalls. "But without that [first] injunction, there would not have been a land claims settlement."

The treaty was just the first in a string of agreements and high-value settlements with the province and Canada that have steadily increased the Cree’s leverage over development, while helping to empower other aboriginal groups. Ultimately, in 1982, Canada’s Constitution was amended to require the government to respect the aboriginal and treaty rights of aboriginal peoples.

The Cree were not shy about using their new clout. Cree opposition in the courts—with O’Reilly as counsel—and use of the media and protest tactics all contributed to Quebec’s 1994 decision to pull the plug on another gigantic hydroelectric project on the southeast shore of Hudson Bay, the Great Whale Project. And throughout the 1980s and 1990s, the Cree went to court to enforce provisions of the James Bay treaty that they said weren’t being respected. They relied on O’Reilly and Robert Mainville and Johanne Mainville at Gowling, both alumni of O’Reilly’s firm. (They are both judges now.) Led by Robert Mainville and assisted by attorney John Paul Murdoch, a Cree, in 2002 the Cree negotiated a new agreement with Quebec known as the "La Paix des Braves." The agreement established a new nation-to-nation partnership between the Cree and Quebec, providing for a sharing of revenues and joint management of natural resources.

But conflicts arose again after Quebec in 2001 suddenly altered the governance system in the James Bay Cree territory, shifting control to nonnative municipal councils. For eight years, the Cree leadership attempted unsuccessfully to get the provincial government to the table to change the system. Finally, in September 2009, the Cree voted to go ahead with a long-threatened lawsuit.

Coincidentally, the Liberal Party’s Jean Charest, then newly elected as premier, had recently announced his Plan Nord. Calling the plan a "historic opportunity for the government and the Cree to move forward together," the Cree’s leader, Matthew Coon Come, seized the opportunity to push for a resolution of the governance dispute. In a meeting with Charest in November 2009, the Cree’s position was clear: "If you want economic development in our territory, there has to be a good governance regime in place," recalls Gowling’s John Hurley, who advised the Cree in subsequent negotiations. (Hurley’s ties to the Cree date back to the 1970s dispute over the Hydro-Québec dam, when he was a junior research assistant to the O’Reilly-led team negotiating for the Cree. He went on to practice at Byers Casgrain and its successor FMC before joining Gowling in 2009.)

With Hurley at their side, the Cree began intensive negotiations with Quebec in 2010. In May 2011 the Cree and Quebec signed a preliminary agreement; a final one was signed in July 2012. Under the agreement, the Cree now have increased autonomy and powers over land and resource use and planning on certain lands, and share joint authority on the rest of the territory through a regional government composed of an equal number of representatives from the Cree and their nonaboriginal neighbors.

Meanwhile another O’Reilly protégé, Gowling’s François Dandonneau, 40, and Cree lawyer Murdoch were advising the Cree on the brass-tacks business of reaching benefits agreements with mining companies. After working as an associate for O’Reilly, Dandonneau worked in-house for a decade at the Mohawk Council of Kahnawake, then joined Gowling in 2008 and has been one of the Cree’s principal deal-side advisers ever since.

In February 2011, after three years of negotiations, the Cree, advised by Dandonneau and Murdoch, signed an agreement with Goldcorp Inc. allowing the development of one of North America’s largest gold deposits: the massive $2.1 billion Éléonore mine near James Bay. The first private participation deal between a mining company and the Cree since the Paix des Braves, the agreement promises the Cree both fixed payments and a share of future profits at Éléonore, and ensures that the project will proceed in a way that protects the Cree’s traditional activities and territory. Last year Goldcorp awarded the first $50 million in contracts; 80 percent of this amount went to Cree businesses. The company has said it hopes to use this agreement as a model for collaboration with local communities near its projects around the world.

According to Fasken’s Jean Gagné, who represented Goldcorp, Éléonore is a model in yet another way: as a template for future financing of infrastructure. In 2009 Goldcorp asked the government for help financing a road, airstrip, power line, and telecommunications facility. The Charest government was torn: "The government wants to encourage the building of infrastructure, but it doesn’t really want to pay for it," Gagné says. He and a colleague, Jean Masson, came up with a new funding mechanism that they say became part of the rollout of Plan Nord: Under it, a portion of mining royalties helps underwrite infrastructure for new development.

Since the Éléonore agreement, the Cree have signed off on other major projects. In late March, the Stornoway Diamond Corporation secured a similar deal with the group that allows Quebec’s first diamond mine, the Rénard Diamond Project, to move forward. Reserves are thought to be worth $4 billion. Once again, Dandonneau was on the Cree side of the table.

Stornoway, for its part, looked to Ann Bigué. The FMC partner, who declined to confirm her involvement in the project or any other current client matter, is often cited as among Quebec’s most experienced aboriginal law attorneys. Her aboriginal law practice dates back to the late 1970s, when she worked on pipeline projects at Canada’s National Energy Board. Those projects ran afoul of lands claimed by aboriginal groups; Bigué focused on resolving the conflicts.

In the 1980s and 1990s, Bigué led some complex litigations opposite the Innu in the context of hydroelectric development on behalf of Hydro-Québec, and forestry management activities on behalf of Kruger Inc. But these days, most of her time is devoted to negotiating agreements with aboriginal groups on behalf of her clients. Companies "should start early and build a solid relationship," she says. "To reach agreement, you need to get to know each other. It takes time, and it’s got to be done properly."

It’s a job that can be physically challenging. A native of Abitibi, a sparsely peopled land of boreal forest seven hours’ drive northwest of Montreal, Bigué is no stranger to frigid weather. But she remembers being so cold on some early trips north to Nunavik, an area of permafrost, that she wore her parka to bed. Another time, after walking alone and unarmed to a neighboring house in a seaside village, she was told never to do that again, since polar bears were known to attack in the area.

Still, "you tend to forget the difficulties," Bigué says, "because I’m always learning. This is an area of the law where you have to be creative. The rules have evolved, and they have been defined and redefined and expanded upon by the courts. We have learned to find a consensus around each individual project, and to reconcile the interests of development and the uses of the land by the aboriginal peoples."

Creativity will certainly be required by Fasken’s Gagné if he is to find a path forward for his new client, Quebec-based Strateco Resources Inc. The company is trying to get a construction permit for a uranium mine in Cree territory; but in August the Cree leadership, again represented by Gowling, flexed its political muscle, declaring a permanent moratorium on uranium exploration and mining on its lands. While Strateco said that it would keep talking with the Cree, a courtroom showdown is possible; Strateco’s most recent statement noted that only the Quebec government may declare such a moratorium. (Gowling’s Dandonneau and Hurley declined to comment.)

Like the Cree, the Inuit have struck development deals under the James Bay treaty and the governance agreements that followed. The first was a 1994 collaborative agreement with Falconbridge Limited related to a large nickel-mining project. The agreement, negotiated by the Inuit’s longtime business lawyer Sam Silverstone, became a precedent for later partnerships between native interests and mining companies. The company agreed to allot 20 percent of the jobs to the Inuit—17 percent to date, according to press reports—and the Inuit have received $75 million in initial cash compensation and profit sharing of more than $100 million since 2004. A 2008 contract with Canadian Royalties Inc.—now Jien Canadian Mining Ltd.—involving another nickel mine followed the same pattern. When the mine goes into production, it is expected to generate $50–80 million in benefits to the Inuit.

The Inuit say they are interested in promoting development. "We believe in [Plan Nord], but with a few hesitations," Jean-François Arteau, the group’s chief counsel until recently, told a news publication. "If there are no mines, there are no roads and then no fiber-optic transmission line" for Internet communications.

The Innu, whose land claims have not yet been officially inscribed in a treaty, are in a more difficult position vis-à-vis development. They have been hamstrung by internal divisions—nine Innu communities claim lands in Quebec and seven in neighboring Labrador—and by a historic reluctance to use the courts. Unlike the Cree, who struck settlements with the government and public utilities worth billions of dollars since 1975, the Innu did not garner big monetary settlements. Meanwhile, a dozen hydroelectric dams have been built in their territory, dams that supply roughly a quarter of Quebec’s power and that have generated scores of billions of dollars in revenues for Hydro-Québec.

Still, the Innu are making some progress. In 2004, after 30 years of negotiations, four Innu groups struck an agreement-in-principle with Canada and Quebec under which they are promised a stake in future development affecting their ancestral lands. But a final treaty settling Innu land claims, and an Innu role in governance, remain distant goals.

Recently, with larger projects coming in, the groups have begun tapping counsel at business firms to handle the complex new contracts. Cain Lamarre’s François Tremblay, who advised the four Innu groups on the 2004 preliminary land claims agreement, recently helped one Innu group negotiate a first private benefit agreement with Hydro-Québec, related to its massive new hydroelectric project at the Romaine River.

But not all Innu groups have agreed to the project. In June 2009—36 years after he helped the Cree win their landmark injunction against Hydro-Québec—O’Reilly was tapped to help a separate Innu group near Sept-Îles wage a court battle to stop construction of the dams. The group, which claims as ancestral lands an area that would be traversed by transmission lines, asserts that its aboriginal rights are being violated and that it was not consulted properly. Prompted by O’Reilly’s injunction motion, the utility offered to negotiate. In February 2011 the group’s representatives and Hydro-Québec reached agreement, signing a $125 million settlement—only to see the deal killed in a referendum by the Innu community. The case is now back in court.

But during that litigation, O’Reilly was helping the group strike private deals with mining companies on benefits. Since 2008, he has helped the Sept-Îles Innu negotiate development agreements with Tata Steel, ArcelorMittal, Labrador Mines Holdings Ltd., and Cliff Natural Resources. Innu agreements with the companies may be worth $500 million or more to the Innu over the next 30 years, he says.

Meanwhile, at the Quebec firm BCF, aboriginal law partner Nadir André has helped a separate Innu group, the Innu of Matimekush-Lac John, negotiate parallel deals with the same four mining companies. André, 41, himself a member of the group, remembers when the mines left his hometown of Schefferville in 1982, condemning many Innu residents to poverty for the next 30 years. Among the first, symbolic benefits he helped win back to his community was a promise by Tata and Labrador to fund the $4 million reconstruction of the town’s arena and swimming pool, which had been saved in the 1980s from the wrecker’s ball by a human chain of Innu children.

André notes that most companies are now very willing to sit down with the local Innu leadership, and that negotiations with Tata and the other companies was marked by goodwill. But that is not always the case: He is currently engaged in a difficult negotiation with an Iron Ore Company of Canada and Rio Tinto Limited joint venture on plans to triple an existing development’s iron ore production. (Bigué, he notes, is representing IOC.) Discussions ended in July over a disagreement over whether the company, which has mined in Innu areas for 60 years, needed to update an original benefits agreement. "We have to tell them we’re open for business," says André. "But First Nations will not allow a project to go on if our reasonable demands are not met."

Despite the Innu’s willingness to cut deals, without a treaty or a unifying Innu authority, legal uncertainties and dissident groups continue to dog development in Innu territory. Last June, for instance, the Innu band near Schefferville that had signed a benefits agreement shut down a main supply road to several new mining developments for several days over a number of complaints. (The blockade ended after company officials met with the protesters to listen to their concerns.) "There’s a profound mistrust of the government" among the Innu, says O’Reilly, "and some people distrust their own people handling large amounts of money."

The recent agreements between the Cree, Inuit, Innu, and mining and power companies represent a new template for development of Quebec’s far north. In October, however, with a new party in power, many lawyers were advising clients to wait and see what the new government’s plan on royalties and infrastructure investments will be. "Bottom line: There is uncertainty and confusion," says Richer La Flèche.

Still, the consensus was that with or without Plan Nord, the world’s appetite for Quebec’s metals will continue to drive investment. Moreover, Plan Nord’s explicit recognition that aboriginal groups play a key role in development will likely remain part of any future plan. "Before," says André, "the train of development never bothered to stop for First Nations—it just went through them, and they were perceived as opposing it. Now, with Plan Nord, the train stopped at the station and invited us in. Most aboriginal groups have jumped on board."

 

The Law Firms on Key Plan Nord Projects and First Nations Agreements

Firm Size of Plan Nord team Head of Plan Nord Team Representative Work
BCF 21 lawyers on natural resources strategic team Nadir André and André Morrissette BCF represented the Matimekush–Lac John Innu community in four investment benefit agreements with mining companies and is currently representing the same group in negotiations with the Iron Ore Company of Canada in its expansion plans.
Cain Lamarre Casgrain Wells 13 lawyers André Gauthier Cain Lamarre represented four Innu communities in investment benefit agreements with several mining companies; it is also involved in negotiations with Hydro-Québec on hydroelectric projects. It negotiated a socioeconomic participation agreement with Metanor Resources Inc. on behalf of the Cree of Waswanpi for a new gold mine project in late September.
Fasken Martineau DuMoulin 10 partners Jean Gagné and Jean Masson Fasken represents Goldcorp Inc. on $2.1 billion Éléonore Gold Project, Investissement Québec and Yara International ARA in an $800 million apatite project, Xstrata Nickel in the Raglan gold mine project, and Strateco Resources Inc. in a proposed uranium mine project.
Fraser Milner Casgrain 20 lawyers Ann Bigué Fraser represented Stornaway Diamond Corporation in negotiations with the Cree for the Rénard Diamond Project and is currently advising the Iron Ore Company of Canada in its expansion plans for an iron ore development near Sept-Îles.
Gowling Lafleur Henderson 10 lawyers Luc Lissoir Gowling represented the Grand Council of the Crees in the July governance agreement and has recently advised on several investment benefit agreements with mining and infrastructure companies.
Heenan Blaikie 25 lawyers Eric Maldoff Heenan represents Century Iron Mines Corporation in its Attikamagan iron ore project; BlackRock Metals Inc. in an iron and titanium project near Chibougamau; and Quest Rare Minerals in a project near the Labrador-Quebec border.
McCarthy Tétrault 20 lawyers Marc Dorion McCarthy represented Wuhan Iron & Steel (Group) Corporation in its investment in Consolidated Thompson; Rio Tinto Limited in its ilmenite mine expansion; Anglo American plc in a joint venture with Virginia Mines Inc.; and Toyotsu Rare Earth Canada Inc. in acquiring a 49 percent stake in rare earth assets of Matamec Exploration Inc.
Osler, Hoskin & Harcourt 16 lawyers François Paradis, Ward Sellers, and Étienne Massicotte Osler represents the Canadian National Railway Company in its proposed venture to build a $5 billion railroad from Sept-Îles to the Labrador Trough.