Vancouver Island's Great E & N Railway Land Grab

Scandal is not new to the private forest lands on Vancouver Island

by Will Horter

Coal MIne Shaft No. 6, Cumberland, British Columbia | Via BC Archives

Fortunes have been made – and are being made – by resource companies that benefit from sweetheart deals that privatize vast tracts of land in BC. A select few, with the right government connections, reap the benefits. The public, especially First Nations, pay the price. The BC government’s recent decision to privatize 28,000 hectares of forestlands previously in Western Forest Products (WFP) tree farm licences (TFL) is only the latest scandal in a sordid history that traces back to BC’s entry into the Canadian Confederation.

Few British Columbians are aware that a land privatization deal was written into the Terms of Union when BC joined Canada in 1871. As forester Ray Travers points out, “Clause 11 of the Terms of Union conveyed in trust to the federal government, provincial lands along the entire length of the railway across BC, some that later became the Esquimalt and Nanaimo (E&N) land grant on southeastern Vancouver Island.”

The controversy surrounding the E&N land grant still haunts decision making today. In late October, the Hul’qumi’num Treaty Group, representing six Coast Salish First Nations, asked the Inter-American Commission on Human Rights in Washington to hear its complaint that 300,000 hectares of land converted to private property in the E&N land grant was “an act of egregious piracy.”

In the 1870s as part of its commitment to “connect the seaboard of BC with the railway system of Canada,” Canada agreed to contribute $100,000 annually towards the construction of a railway. BC later agreed to grant about two million acres plus $750,000 to the company that constructed a railroad on Vancouver Island.

Only a select few well-connected people reaped the bulk of the windfall. The man behind the E&N deal was coal baron Robert Dunsmuir. Dunsmuir was both the richest man in BC and, with a seat in the provincial legislature, influential in political circles.

Dunsmuir had little interest in railroads; what he wanted was the land, and with it control of the great reserves of coal and other minerals. He used his economic and political influence to secure the contract to build the railway.

The Esquimalt & Nanaimo Railway Company immediately began subdividing the grant into parcels and selling it off, making Dunsmuir and his colleagues millions. In 1905, the Canadian Pacific Railway Company (CPR) paid just over $1 million for the E&N and $1.25 million for the remaining 566,580 hectares of land not yet sold. In 1910, Dunsmuir sold his coal mining interests in the granted lands for $11 million.

Today, the Hul’qumi’num call this scandalous transaction “the great land grab” because it effectively privatized about one third of their territory. Robert Morales, chief negotiator for the Hul’qumi’num, said recently, “Dunsmuir and the government stole our land…and for the last hundred years their descendants particularly logging companies have been getting rich, while locking us out.”

The legacy of the E&N privatization is upsetting treaty negotiations. Even though Canadian courts have recognized Aboriginal title and rights on private lands, and directed the Crown to resolve the land disputes honourably, the government will not negotiate private land or compensation at the treaty table. Morales says the Hul’qumi’num are taking action because, “international laws say that if aboriginal lands are illegally confiscated, the lands need to be returned, or we need to be compensated.”

From Forests to Real Estate
“The conversion of excellent forestland to real estate development goes beyond Dunsmuir and the E&N land grant,” says Ken Millard, a Director of Galiano Conservancy. “What is now happening all over Vancouver Island began on Galiano in the 1970s. The public subsidizes logging companies for decades with preferential taxes, then these same companies try to develop the land and make a killing on real estate.”

Samuel Robins, a manager of a coal mine in Nanaimo, purchased large tracts of land in the Gulf Islands, including 8,294 acres on Galiano in 1899. The land passed through the hands of a number of coal and logging companies before MacMillan Bloedel took control in 1960. After high-grading the old growth, in 1972 MacMillan Bloedel proposed to subdivide and sell their lands. The fight was on.

Galiano residents organized and defeated the conversion, but the battle continued. In the 1990s island residents had to defend their community’s bylaws from lawsuits. “Maintaining our community against the developers requires eternal vigilance,” says Millard. “Every election is a referendum on the future of our island.”

The Galiano experience is now being replicated all over Vancouver Island. As the coastal timber industry declines after decades of overcutting, many logging companies are now becoming real-estate developers.

In 2003 conglomerate Brascan took over the failing Doman-WFP in bankruptcy proceedings. Since leveraging control of WFP, Brascan (now Brookfield Asset Management) has put together vast holdings of both public and Crown forest lands. It acquired all MacMillan Bloedel’s operations in 2004, folding the private lands into the 635,000 acres of fee simple timberlands it controls. WFP also controls the majority (7.5 million m3) of Annual Allowable Cut from coastal Crown lands.

TFL Land Removals

Forest Minister Rich Coleman’s decision to remove 70,000 acres of forestland from WFP’s TFLs in January of 2007 illustrates the continued erosion of a system with a scandalous history dating back over half a century. Since the BC Liberals were elected in 2001, forest ministers have selectively dismantled TFLs to create new windfalls for logging corporations friendly to their party. The latest scandal erupted with the announcement that WFP had put 6,300 acres of the former forestlands in the Sooke-Port Renfrew area up for sale. The listing of almost 5 kilometres of waterfront triggered outrage in the community.

In July, John Doyle, the recently appointed Auditor General, also condemned the deal. Using language seldom seen from a government appointee, Doyle concluded the BC government lacked “due regard for the public interest.” Doyle’s scathing report condemned the Ministry’s inadequate due diligence into WFP’s financial status, and highlighted suspicious trading patterns, unusual patterns of political donations and conflicts of interest. [See more details “Follow the Money,” word file]

TFLs have triggered scandal since their creation. Back in the 1950s, when the government originally set up the system, then Forest Minister Robert Sommers went to jail for taking bribes in allocating the new tenures. And in 2004, Forest Minister Mike de Jong privatized almost 215,000 acres of Weyerhaeuser‘s TFL lands, producing a potential windfall of $800 million for the US logging giant when it sold out to Brascan (who folded the lands into the supposedly debt-ridden WFP).

The fact that Weyerhaeuser had donated almost $500,000 to the Liberals over the previous decade raised eyebrows. Over 44% of the Hupacasath First Nation’s territory was affected, so they sued. In 2005, the BC Supreme Court ruled that government had breached its constitutional duty to consult with the Hupacasath over the removal decision and set a two-year period for the parties to negotiate. In November 2008, after the BC government failed to engage in meaningful consultation, the judge ordered a mediator to resolve the dispute.

Luckily sweetheart deals don’t mean real estate development is inevitable. Following Galiano’s example, communities on Vancouver Island are uniting to fight against subdivision and conversion of forestlands. The Capital Regional District rezoned the area around WFP’s forestlands to require a 120 hectare minimum lot size. But while then Community Development Minister Ida Chong delayed the approval of the new bylaw for six weeks, WFP applied to develop roughly 1400 ha. under the old rules. The bylaws and WFP’s actions are now before the courts. And the residents of neighbouring communities are gearing up for municipal elections.

If a hundred years of controversial land privatizations teaches us anything, it is that, while the benefits of these sweetheart deals may go to only a select group of well-connected people, it takes a legion of committed residents to ensure communities aren’t sacrificed to enrich real estate-obsessed logging companies.


Will Horter, formerly the executive director at DogwoodBC and a staff lawyer at EcoJustice (then Sierra Legal Defence Fund) is an activist and writer whose work focuses on reinvigorating democracy, redefining citizenship and pondering things that matter in the world.

From Watershed Sentinel November-December 2008

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