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Land claim deal key to Lower Churchill project beset by legal, local wrangling

SHESHATSHIU, N.L. - A multimillion-dollar deal to win aboriginal support critical to the development of Labrador's Lower Churchill hydro megaproject is beset by delays, an Innu Nation leader says.

SHESHATSHIU, N.L. - A multimillion-dollar deal to win aboriginal support critical to the development of Labrador's Lower Churchill hydro megaproject is beset by delays, an Innu Nation leader says.

Days after Premier Danny Williams said the agreement was near completion, deputy grand chief Peter Penashue said legal wrangling has slowed ratification of the Tsash Petapen or New Dawn Agreement.

The contentious offer has split this hard-scrabble Innu community near Happy Valley-Goose Bay and has left Penashue's own family at odds as his mother passionately campaigns against the proposal.

And there's no resolution in sight. The package that Innu leaders and the provincial government announced as a near-done deal on Sept. 26, 2008, still needs approval from Ottawa, Penashue said.

"At one point we were looking at splitting the agreement" into provincial and federal areas of jurisdiction, he said.

A ratification vote for the Innu community of about 2,500 people was initially slated for early in 2009. That ambitious goal was missed, and the vote has been repeatedly put off.

"Subsequently, it has been agreed to by lawyers that (provincial issues) can't be separate from the feds because the feds have the constitutional powers and authority to finalize these agreements," Penashue said.

Namely, it's up to Ottawa to sign off on legal title to give the Innu about 12,950 square kilometres of land that are crucial to Lower Churchill going ahead. There are side matters that would also involve the federal Fisheries and Parks Canada departments, Penashue said.

New Dawn offers the Innu hunting rights within 33,700 square km of land, plus compensation of $2 million a year for flooding caused when waterways along the upper Churchill River were diverted 40 years ago.

That part of the agreement expires in 2041, when a rate-setting contract that Newfoundland and Labrador signed with Quebec to develop the Churchill Falls hydroelectric project expires.

After that, the Innu would collect a share of royalties from the Churchill Falls project along with a cut of any royalties from the proposed Lower Churchill project.

Penashue said federal officials are not yet at the table to start discussing details about royalties and land titles.

"It certainly could slow down the thing," he said.

"Sometimes there's a lot of confusion with ratification. People think that by initialling the agreement that it's ratified. There's a bit of a process even after that."

Recently, Williams said the Innu deal, a huge step toward his dream of harnessing Lower Churchill's power, is virtually sealed.

"That's in the very final stages," he told reporters last month.

"Government and the aboriginal people have signed off ... and that will ultimately go for ratification in the very near future."

But Penashue said it could be three or four years before the agreement winds its way through federal channels and is ultimately approved and voted on by his people.

Much will depend on whether federal Indian Affairs Minister Chuck Strahl opts to "take this file seriously" and fast track it, Penashue said.

Indian Affairs spokeswoman Patricia Valladao said she could not elaborate on the status of the New Dawn agreement, but noted there are land claim talks outside the deal that have been ongoing for years.

These bureaucratic twists are on top of a tentative deal that would see Hydro-Quebec buy key assets of NB Power, New Brunswick's public power utility - an agreement that could further impede development of the Lower Churchill.

If approved, Quebec could become the gatekeeper for the two most viable means of transmitting Labrador power to lucrative markets in Ontario and the northeastern United States.

Williams has vowed to fight the takeover before the federal Competition Bureau and possibly in court. He has complained bitterly and often about the Churchill Falls agreement struck in the 1960s - a bad deal that he says forced his province to essentially leave its hydroelectricity at Quebec's doorstep.

Since Churchill Falls started production, Williams says Quebec has generated $22 billion in revenue while his province has garnered $1 billion.

"What are they going to do to New Brunswickers?" he said.