Lubicon Lake Indian Nation

April 22, 2008

Arthur Cunningham

Senior Aboriginal Policy Advisor

TransCanada Pipelines Ltd.

Dear Mr. Cunningham:

Re: Your letter of April 21, 2008

I don’t know why TransCanada is surprised by my letter of April 17, 2008 responding to the last version of your April 15th letter. The basic Lubicon position on the issues has not changed since our first discussions with TransCanada a year ago last March.

You say you’re surprised by the Lubicon response to the last version of your April 15th letter “considering our most recent discussions”. You don’t spell out the substance of those “most recent discussions” but they should have left no confusion on your part. The substance of those “most recent discussions” is as follows:

On April 8, 2008 you phoned and asked for a meeting saying “I come with a TransCanada position around recognition of the traditional territory”. You said “TransCanada has no problem recognizing that the Lubicons assert unceded land rights”.

You were told that the Lubicons require recognition and respect for Lubicon land rights, not merely recognition that the Lubicons assert unceded land rights. You were told that it is a matter of fact that the Lubicons did not sign Treaty 8 ceding Lubicon rights to Lubicon Territory. Moreover, you were told, the Lubicon people have not subsequently ceded Lubicon rights to Lubicon Territory to anybody through treaty or in any other historically or legally recognized way.

You told us “TransCanada cannot give the Lubicons land rights”.

You were told that the Lubicon people are not asking TransCanada to give the Lubicons land rights. If TransCanada wishes to build a pipeline across unceded Lubicon land, you were told, TransCanada will be required by the Lubicon people to recognize that the Lubicons have rights over unceded Lubicon Territory, and to show respect for Lubicon land rights by agreeing not to proceed with an application to the province until you have answered Lubicon questions regarding pipeline construction and operation, addressed Lubicon environmental and other concerns, and offered the Lubicon people economic opportunities related to pipeline construction.

You told us TransCanada has “four language phrases” regarding recognition of Lubicon land rights that TransCanada “can live with”. Those “four language phrases”, you said, are:

“1.)TransCanada acknowledges and recognizes that part of the right-of-way for the North Central Corridor Pipeline Project falls within land the Lubicons consider unceded.

“2.)TransCanada acknowledges and recognizes that part of the right-of-way for the North Central Corridor Pipeline Project falls within asserted unceded Lubicon land.

“3.)TransCanada acknowledges and recognizes that part of the right-of-way for the North Central Corridor Pipeline falls within land claimed by the Lubicon Nation as unceded territory subject to a jurisdictional dispute with the federal and provincial governments.

“4.)TransCanada acknowledges and recognizes that part of the right-of-way for the North Central Corridor Pipeline falls within land that the Lubicon Nation claims as traditional territory.”

You were told that the Lubicons will not accept the term “right-of-way” because it suggests an existing legal right. You were also told that the Lubicons will not accept the qualifiers “asserted”, “claimed” or “considers”. We suggested the simple, factual sentence “TransCanada acknowledges and recognizes that part of the proposed route for the North Central Corridor Pipeline falls within unceded Lubicon Territory”.

You told us “TransCanada needs to be cautious because Alberta is not the only place where we’re dealing with unceded Territory”. You said “We can’t take a position before settlement”.

You were told that the Lubicons do not require TransCanada to take a position before settlement. What the Lubicons do require, you were told, is that TransCanada either remain neutral in an acknowledged jurisdictional dispute or stay out of the area until the question of land rights has been settled. Refusing to recognize that the Lubicons have unceded land rights while recognizing the right of the province to regulate activity in unceded Lubicon Territory, you were told, is tantamount to siding with the province in the jurisdictional dispute and supporting provincial assertion of jurisdiction over unceded Lubicon land.

You said “TransCanada is also prepared to put in a clause saying that it is the position of TransCanada to encourage all parties to negotiate a settlement of Lubicon land rights”.

You were told that TransCanada should consider saying that TransCanada acknowledges and recognizes that the Lubicon Lake Indian Nation has unsettled land rights over part of the proposed route for the North Central Corridor Pipeline Project. You were told TransCanada might then want to consider a couple of sentences indicating that the issue of Lubicon land rights has been the subject of negotiation between the Lubicon Lake Indian Nation and both levels of Canadian government for many years and that TransCanada encourages all parties to return to the table to negotiate a settlement of Lubicon land rights that defines mutually acceptable jurisdictional rights and responsibilities. Pending settlement of Lubicon land rights, you were told, TransCanada will be required by the Lubicon people to meet Lubicon regulatory requirements prior to proceeding with TransCanada’s application to a provincial regulatory agency. Such an approach, you were told, would set out the factual situation and allow the parties to proceed without TransCanada taking sides or setting a precedent for anywhere else.

On April 9th it was agreed to meet in Little Buffalo Lake on April 10th to discuss these issues further. Assuming agreement could be reached on the prior question of recognition of Lubicon land rights -- and with an eye on a “Prehearing Meeting” of the Alberta Utilities Commission (AUC) regarding TransCanada’s provincial application scheduled for the following week -- you were specifically asked if you would involve everyone in the April 10th meeting required to deal with all of the involved issues including environmental concerns and contracting opportunities. You were told that the objective of the meeting should be to deal with all of the outstanding issues prior to the scheduled “Prehearing Meeting” of the AUC. You said “Yes, that’s my job -- to reach agreement on all of the issues necessary to go forward”.

During the meeting on the 10th you again tabled the same “four language phrases” you put forward during the discussion on April 8th. “If we can agree on one of them”, you said, “we can proceed”. You said you considered these so-called “four language phrases” “respectful”.

I told you that the Lubicon people have repeatedly explained our situation to TransCanada. I told you we are not prepared to enter into consultations on other things until we reach agreement on recognition that the Lubicons have land rights.

I told you that the Lubicon people do not just claim land rights. I told you that the Lubicon people have land rights that we have never ceded to anybody through treaty or in any other historically or legally recognized way. I pointed out to you that the Lubicon people have been in on-again off-again negotiation of recognized Lubicon land rights with both levels of Canadian government since at least 1985.

I told you that the Lubicon people have lots of questions about construction of the pipeline including whether it will just be a straight through pipeline or if it will involve construction of lots of lateral pipelines connecting it to a growing network of gas wells in Lubicon Territory. However, I told you, before we discuss how much disruption the proposed pipeline is going cause in Lubicon Territory, we have to agree that the Lubicon people have land rights that will be respected by TransCanada agreeing not to proceed with TransCanada’s application to the province until Lubicon concerns have been addressed.

You told me “The issue to us is who owns the land”.

I told you that the process for Canada to obtain rights to Indian land is through negotiation of a treaty with the original aboriginal owners. I told you that the Lubicons are the original aboriginal owners of Lubicon Territory and no treaty has ever been negotiated with us. If TransCanada wants to operate in Lubicon Territory, I told you, TransCanada is going to have to recognize that the Lubicon people have land rights.

You said “If the land I claim is mine; the people and the law of the country say is not mine; I couldn’t prevent you from coming on it”. You said “TransCanada is governed by the laws of the land”.

You were told that the laws of the land provide that the land belongs to the original aboriginal owners until it is ceded by treaty. Until there is a settlement of Lubicon land rights, you were told, the Lubicon people do not recognize provincial authority to approve construction of the TransCanada pipeline across Lubicon land without Lubicon consent.

You were told that the Lubicon people have tried to come up with an approach that would allow TransCanada to proceed in Lubicon Territory prior to settlement of Lubicon land rights in a way that would both respect Lubicon land rights and allow TransCanada to meet provincial regulatory requirements. However, you were told, TransCanada has failed to take advantage of that opportunity.

You said “Our people need to understand that”. You said “Our experience elsewhere is that there are a lot of implications to land rights”. You said “Our people need to get over that risk from a business standpoint”.

You were told that TransCanada can eliminate the business risk by either staying out of the disputed area or by meeting the requirements of both parties to the jurisdictional dispute.

You were asked if TransCanada intends to proceed whether the Lubicons object or not.

You said “Yes”.

I told you that I didn’t know how else to explain the Lubicon position to you. I suggested that you discuss possible wording with our advisor Fred Lennarson to see what can be worked out. I said you could talk back and forth with your lawyers in Calgary by phone to see what could be worked out.

I told you that the Lubicon people are looking for a simple agreement that recognizes and respects Lubicon land rights. If the government returns to the negotiating table and negotiates a settlement of Lubicon land rights that defines mutually acceptable jurisdictional rights and responsibilities, I said, that will change everything and we will not have to go through this difficult process every time somebody wants to proceed in the Lubicon area.

However, I told you, you are a very foolish man if you think TransCanada is going to proceed with construction of a major pipeline through unceded Lubicon Territory without Lubicon consent. I told you the Lubicon people are not going to accept being threatened by anybody.

After some internal discussions, Fred Lennarson tabled the following proposed wording for you to discuss with your colleagues at TransCanada:

“TransCanada acknowledges and recognizes that the Lubicon Lake Indian Nation has never signed treaty with the Government of Canada ceding Lubicon rights to the Territory identified in the attached map.

“TransCanada acknowledges and recognizes that the Lubicon Lake Indian Nation consequently has unsettled aboriginal land rights over part of the route for the proposed North Central Corridor Pipeline Project.

“TransCanada acknowledges and recognizes that there is an on-going dispute between the Lubicon Lake Indian Nation and the Government of Alberta over who exercises rightful regulatory authority over the Territory identified in the attached map.

“TransCanada acknowledges and recognizes that settlement of Lubicon land rights has been the subject of negotiation between the Lubicon Lake Indian Nation and both levels of Canadian government for many years and encourages the Governments of Canada and Alberta to return to the table and to expeditiously negotiate a settlement of Lubicon land rights with the Lubicon Lake Indian Nation resolving the dispute over rightful regulatory authority in the Territory identified in the attached map.

“Pending settlement of Lubicon land rights, TransCanada is prepared to meet Lubicon regulatory requirements prior to proceeding with TransCanada’s application to the Alberta Utilities Commission.”

You told us that your colleagues would be concerned about the phrase “Lubicon regulatory requirements” because they won’t know what’s involved.

We told you that the proposed clauses are only the whereas clauses in a proposed agreement between TransCanada and the Lubicons. We told you the regulatory requirements would be spelled out in the body of the agreement which, again with an eye on the Prehearing Meeting of the provincial regulatory agency scheduled for the following week, we told you we were prepared to sit down and negotiate with you right then. We told you that TransCanada would then know specifically what’s involved in meeting Lubicon regulatory requirements and in any case there will be no Lubicon agreement not to oppose the provincial application unless there is agreement on all of the involved issues.

You indicated that you were not concerned about the upcoming Prehearing Meeting of the provincial regulatory agency and would have to go to Calgary to discuss proposed Lubicon language with TransCanada lawyers and officials face-to-face. You also said, contrary to what you’d said on April 9th when the April 10th meeting was agreed, that you would need to involve others in discussion of such things as Lubicon environmental concerns and contracting opportunities.

You phoned Fred Lennarson the morning of April 11th and asked if we could say “land rights” instead of “aboriginal land rights” in the second clause of Lubicon proposals. You said “People are uncomfortable with the word ‘aboriginal’ because they don’t know what the implications are”. You said “They’re worried about setting a precedent”. You said “Everything else is OK”.

Fred Lennarson checked with us and we agreed to say “land rights” instead of “aboriginal land rights”. When Fred Lennarson phoned you back to agree to your proposed wording, however, you said “No, the problem is not with the word ‘aboriginal’”. You said “The problem is with the word ‘land’”. You said “Our people would rather just say ‘aboriginal rights’”.

Fred Lennarson checked with us again and then phoned you back to tell you that we would not agree to leave out the word “land” in “land rights”.

You told Fred Lennarson “I thought you’d have a problem with that”. “OK”, you said, “let’s go back to the original Lubicon wording ‘unsettled aboriginal land rights”.

A short while later you phoned Fred Lennarson again and said “People would also like to end the second paragraph with ‘aboriginal land rights’ and drop ‘over part of the route for the proposed North Central Corridor Pipeline Project”. You said “They don’t think it’s necessary because the map provided by the Lubicons will be attached”.

Fred Lennarson pointed out to you that the TransCanada had originally proposed the language it was now proposing to take out. He told you the Lubicons had only changed the term “right-of-way” to “route” because the term “right-of-way” suggested an existing legal right.

You told Fred Lennarson “I know the language originally came from us but people now think it’s unnecessary”.

After consulting with us Fred Lennarson phoned you back and agreed to drop the last part of the second clause reading “over part of the route for the proposed North Central Corridor Pipeline Project”. However, Fred Lennarson told you, the Lubicons are not prepared to keep endlessly going back and forth over such things as putting in and taking out and putting back in the same phrase.

You assured Fred Lennarson “Everything else is fine and I hope to keep my commitment to have you a letter by the end of the day”.

At 3:45 that afternoon I received a faxed letter from you agreeing on the first four proposed Lubicon clauses but not mentioning the fifth clause -- the one pertaining to TransCanada’s agreement to meet Lubicon regulatory requirements prior to proceeding with TransCanada’s application to the provincial regulatory agency. On my instructions Fred Lennarson immediately sent you the following email:

“What happened to the last or fifth paragraph of the agreed wording regarding TransCanada not proceeding with the AUC application until Lubicon regulatory requirements have been met?

“There was no discussion of this fifth paragraph in our phone conversations yesterday and in fact you started those discussions yesterday by stating that TransCanada’s only concern was with language in the second paragraph and that ‘Everything else is OK’. While we continued to discuss the language in that second paragraph back and forth yesterday until we reached agreement, there was no discussion at any point yesterday about the last or fifth paragraph.