• SUMMARY HIGHLIGHTS -

An independent report by Grant Thornton Management Consultants confirms and updates a January 1996 study conducted by KPMG Management Consultants on behalf of the government of British Columbia. KPMG's "Benefits and Costs of Treaty Settlements in British Columbia" found that the benefits of treaty settlements will outweigh the costs.

The Grant Thornton report takes into account the Nisga'a Final Agreement and other developments and factors affecting treaty negotiations to provide a range of financial and economic impacts of treaty settlements on British Columbia. The key findings of this study are:

• The total settlement costs for all treaties will range from $9.2 to $9.4 billion over 40 years. This includes costs of $6.0 to $6.3 billion ($1998) for cash transfers to First Nations, payments to third parties and the costs of transferring land and resources. In addition, rural Crown land with a residual value of $2.8 to $3.5 billion, after the value of forest and other resources is accounted for, will be transferred as part of overall settlements.

 
• The provincial government's $2-billion share of the financial costs will average $50 million annually over 40 years. This is about 25 cents for every $100 in the current provincial budget.

 
• After deducting British Columbia's total financial costs, B.C.'s net financial benefit is estimated at between $3.8 and $4.7 billion. The total cost to provincial taxpayers for completing all treaties in B.C. - including cash, the value of transferred resources, pre-treaty and negotiation costs and B.C. taxpayers' share of federal costs - is estimated at $2.1 to $2.5 billion. Financial transfers worth roughly twice that amount will flow into the B.C. economy.

 
• Total economic benefit to British Columbia from the investment of cash transfers and other spin-off effects is estimated at between $7.0 and $11.6 billion. This includes the investment climate dividend resulting from certainty over land title and land use.

 
• British Columbia's net financial benefit from the Nisga'a Final Agreement is estimated at $188 million. Cash flows into B.C. will exceed B.C.'s costs by almost $200 million. Grant Thornton adjusts the provincial government's August 1998 statement of B.C.'s costs to arrive at a financial cost to B.C. of $159 million out of a total financial value of $347 million, over a 40-year period. The balance will be transfers to British Columbia from taxpayers outside the province.

 
• The Nisga'a Final Agreement is consistent with the 1996 KPMG predictions for costs of all treaty settlements over the next 20 years. Assuming the costs associated with other treaties are similar to the Nisga'a agreement, the province is on course with the cost estimates published three years ago.

 
• The fact that 38 First Nations are now negotiating toward an agreement in principle, versus the three First Nations at the time information was prepared for the KPMG report, is a strong indication of the intent of First Nations to settle land claims issues. Nevertheless, it is estimated that it may take as many as 20 years before all land claims are settled in a satisfactory manner.

Internet: (http://www.aaf.gov.bc.ca/aaf/pubs/pubs.htm) Ministry of Aboriginal Affairs

Toll-free: 1-800-880-1022

March 1999