The new religion of economic development — mines, pipelines, power projects and private property — is being promoted by Bob Rae, Jim Prentice, and even former prime minister Brian Mulroney as the only realistic alternative for First Nations.

Bob Rae FNLP 20130724

Bob Rae, former federal Liberal leader and former Premier of Ontario, was appointed chief negotiator for the Matawa First Nations in regional strategy negotiations with Ontario. (Sean Kilpatrick/ Canadian Press)

Last month Rae, acting as a negotiator for nine Ontario First Nations, joined Premier Kathleen Wynne to celebrate the signing of a framework agreement that would open up the province's far north to a mineral development bonanza.

The Ring of Fire, now re-branded as Wawangajing, is located in one of the largest intact wetlands on the planet, 500 kilometres northeast of Thunder Bay in the James Bay Lowlands.

The Ring of Fire apparently holds a treasure chest of chromite, nickel and other minerals. If we are to believe the Chamber of Commerce, it has the potential to drive the Ontario economy for decades.

The chamber estimates that within the first 32 years of operation, the Ring of Fire could generate more than $25 billion in economic activity across a number of sectors.

'Big idea' of a First Nation social contract

Under the new Ring of Fire social contract, the government's job is to help build the all-season roads, string power and broadband lines, train First Nation workers and share a portion of mining revenues with the First Nations. Public investment would be on the order of $2 billion.

The corporation's job is to pay decent wages, buy from First Nation suppliers and take care of the environment with First Nation monitors.

Brian Mulroney

In a recent speech, Brian Mulroney urged the Canadian government to increase efforts to obtain agreements with First Nations in order to proceed with greater certainty towards the goal of continental resource integration and energy independence, say David Peerla and Shiri Pasternak. (Sean Kilpatrick/The Canadian Press)

The Ontario government invests in a new economy for First Nations, subsidizes the project costs for corporations and helps the federal government contain expenditures on First Nation health, housing and education.

It’s a virtuous circle. First Nation sovereignty is never mentioned.

The "big idea" of a First Nations social contract has the power of the Canadian elite’s great and the good behind it. One of the biggest advocates of a new social contract for First Nations is Rae’s free-trade adversary, Mulroney.

In a recent speech, the former prime minister urged the federal government to increase efforts to obtain agreements with First Nations in order to proceed with greater certainty toward the goal of continental resource integration and energy independence.

The roots of the new social contract go back to a series of First Nation legal victories in the 2000s. The courts have made First Nation consultation a necessary requirement for any major resource development in Canada. First Nations have leveraged the delays created by the legal requirement and the uncertainty around the meaning of "consultation" into so-called impact and benefit agreements with resource corporations and the sharing of revenues with provinces.

The more sophisticated sectors of the Canadian political and business elite have recognized that a new social contract with First Nations is essential to developing the oilsands, building pipelines, ports, LNG plants and dams, and opening up new mines.

Big business needs a new First Nation social contract to stabilize the business environment. Governments need First Nations to develop their own sources of revenue to fund their growing social expenditures on housing, education and health care.

Social contract as containment strategy

On the surface, these strategies seem progressive in the sense that they are focused on the redistribution of wealth though revenue sharing, but they are really a containment strategy akin to the transition from wildcat strikes to national labour legislation in the 1930s.

'It is all designed to blunt the more radical demands of indigenous sovereignty movements for real decision making and control of natural resources on their lands.' - David Peerla and Shiri Pasternak

Just as the the right to strike was contained within the right to labour peace in collective bargaining, the demands of First Nation for sovereignty, and all the land rights and decision-making power that go with sovereignty, have been contained in the new social contract.

The enlightened Canadian elites, fearing indigenous resistance — most famously represented in the Idle No More movement — are creating a First Nation social contract reform agenda that includes resource revenue sharing, project equity and an elaborate consultation process.

It is all designed to blunt the more radical demands of indigenous sovereignty movements for real decision-making and control of natural resources on their lands.

'The new First Nation social contract will now be doubly vulnerable to both the limits of the government budgets and the cyclical ebb and flow of markets for commodities.' -  David Peerla and Shiri Pasternak

Taking a page out of the new corporate collaboration agenda that saw environmentalists make peace with forest companies, the new First Nation social contract embraces those aims most consistent with the free market and forecloses development paths that threaten the way the world currently works.

But as environmentalists discovered, there is a difference between a deal and success.

The new First Nation social contract will now be doubly vulnerable to both the limits of the government budgets and the cyclical ebb and flow of markets for commodities.

Mines have a limited lifetime. Oil runs out. An economic crisis limits government expenditures, no matter how well-intentioned.

The First Nation social contract was a solution designed to be capable of winning support in the Canadian corporate elite. Whether it will win support with the grassroots members of First Nation communities is an open question.

David Peerla is the author of No Means No: The Kitchenuhmaykoosib Inninuwug and the Fight for Resource Sovereignty. Shiri Pasternak is a Postdoctoral Fellow at Columbia University in New York City.