Monetary benefit sharing from dams: A few examples of financial partnerships with Indigenous communities in Québec (Canada)

Abstract

Abstract Development practitioners have long recognised that the undeniable benefits of infrastructure projects based upon resource extractive activities, such as dam projects, often carry an associated price tag in terms of environmental and socio‐economic impacts on communities in their area of influence and on taxpayers in general. Beyond the mitigation and compensation of negative impacts, sponsors increasingly recognise the need for directly sharing project benefits with local communities. The economic rationale for benefit sharing is the existence of an economic rent. Other justifications for benefit sharing include: (a) the need for fair redistribution of benefits to negatively affected populations; and (b) the need for financing development investments over and above mandatory compensation for damages and losses. These issues need to be considered in decision support systems designed for planning dams. This article discusses mechanisms that ensure a direct monetary redistribution of project‐related revenues or profits from dam projects to local populations. A review of international case studies reveals that such mechanisms may pursue one or several of the following objectives: (a) providing additional long‐term compensation to affected populations; (b) establishing a partnership with local communities based on sharing of the economic rent generated by the dam project; and (c) establishing long‐term regional development funds. The review also reveals that the following five types of mechanisms may be considered: (a) revenue sharing; (b) development funds; (c) equity sharing; (d) taxes paid to local or regional authorities; and (e) preferential electricity rates and other water‐related fees. The article illustrates the revenue sharing and equity sharing forms of benefit sharing mechanisms with two examples of financial partnerships with Indigenous communities in the province of Québec, Canada: the Paix des Braves Agreement between the Government of Québec and the Grand Council of the Crees and the Minashtuk project.