Fort McKay First Nation brings in $150 million annually from band-owned businesses and long-term deals with oil producers

In 1983 Dorothy MacDonald, chief of the small Fort McKay First Nation, which sits in the middle of the world's richest oilsands deposits, decided to take on the trucks roaring through her community night and day loaded with lumber for construction sites.

She mobilized a roadblock that lasted eight days and eventually pushed the Alberta government to intervene.

Though MacDonald had won a battle, she knew her small, poor community would never win the war when the government and oil companies were so keen to unearth the thick tar her people had once used to repair their canoes.

But this Cree First Nation, which sits on the banks of the Athabasca River about 60 kilometres north of Fort McMurray, wasn't going to be pushed around either.

They came up with a plan to ensure they got their share of the money being made from the vast territory that they and their ancestors called home.

MacDonald died in 2005, but she lived to see Fort McKay become a prosperous, thriving hub.

The 600 residents of Fort McKay lack for little. Almost everyone has a new house, with an SUV and a pickup truck in the driveway. A new school and a multimillion-dollar arena grace the town centre, and there's a first-class daycare. Elders have a new facility in which to meet and relax.

None of this would be possible if it weren't for the oilsands.

"If the whole oilsands area was a dartboard, we would be the bull's-eye," says Raymond Powder, 49, a band councillor who oversees economic and social projects.

This First Nation is in a perfect position to demand negotiations with any company planning a project because the land surrounding its reserve has traditionally been used by residents for hunting, trapping, camping and community rituals. They can claim it is still used for these purposes and a project would interfere with those activities.

"We have 10 signed long-term agreements and six in negotiations," says Alvaro Pinto, manager of sustainability for Fort McKay.

The agreements are confidential but they can include upfront and annual cash payments, commitments to build facilities (Shell Canada paid for the daycare and elder centres) and protection of certain areas - Chinese-owned Brion Energy recently agreed to make sure its extraction project did not interfere with the band's use of the Moose Lake area.

Suncor, the largest oilsands operator, has agreed to build and cover operating costs for a long-term-care facility at Fort McKay. Husky and BP recently collaborated to provide funds for a youth centre that will include a radio station.

The band uses revenue from these agreements to start its own businesses. It owns a sizable industrial park as well as companies that provide logistics, site services, fuel and lube delivery, and environmental services to oilsands developers. The band also entered two joint ventures with ATCO Ltd. to build and operate two sophisticated lodges that each house 1,500 commuting oilsands workers.

Together, the long-term agreements and the band-owned companies bring in about $150 million annually. In addition, many Fort McKay residents have their own businesses, including airlines, bus services, safety equipment and catering. Others have jobs in construction or in the operation of oilsands plants.

There are also monthly payments from the band to elders, and three times a year each resident receives $1,500. And, of course, since they live on reserve land, Fort McKay residents need not pay income tax.

"Why wouldn't I live here?" says Cort Gallup, 51, who works for the band administration and lived in Calgary and Hawaii before returning to the reserve where his mother, Lina Gallup, was born.

As Pinto acknowledges, the band has made a tradeoff: health and environmental worries such as fouled air and water in exchange for financial benefits. But he hasn't given up fighting for better conditions.

"People don't trust the water," he says. "And we need more of a co-ordinated effort among government, industry and public health agencies to make sure we know what is in the air we are breathing."

Residents such as 83-year-old Lina Gallup concede that the old ways of living off the land by hunting, trapping and fishing are long gone.

She doesn't miss them and is only too glad that her reserve can provide for her in her old age, also offering her children and grandchildren opportunities they would never have anywhere else.

Because of its location, Fort McKay has been able to secure lucrative deals with energy firms and benefited from related opportunities. But it has also paid an environmental price. From left, Maurice Bujold, his aunt Lina Gallup and band councillor Raymond Powder in the dining room at a work camp co-owned by the Fort McKay First Nation.Jeff McIntosh/The Canadian Press file photo Gillian Steward

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