Quebec, Cree reach C$3.5 bln land-claim settlement

QUEBEC CITY - The Quebec government and native Indians in the province's James Bay region signed an agreement of principle on Tuesday to end a bitter legal dispute over hydroelectric development in the area and open the door to further resource development in northern Quebec.

Under the agreement, the Cree will receive C$3.5 billion ($2.2 billion) of natural resources royalties over 50 years from the province in return for giving up all legal action against a major power project in the region.

"This agreement constitutes, I am sure, the basis of a great peace between Quebec and the Crees," Quebec Premier Bernard Landry said before a signing ceremony with Cree leader Ted Moses.

"This is an historic turning point and a truly profound revolutionary vision for the Cree and aboriginal peoples generally," Moses said.

The Cree of northern Quebec -- strongly opposed to the separatist agenda of the province's ruling Parti Quebecois -- have been battling with the government for decades over a 1975 James Bay agreement that allowed massive power developments on the region's waterways.

Tuesday's agreement could allow provincially owned utility Hydro-Quebec to launch a C$3.8 billion power project on the Eastmain-Rupert river system of Northern Quebec.

The project, which had been on hold for several years because of opposition from the Cree, should produce 1,300 megawatts, or about 15 percent of the power from entire James Bay area, and create some 8,000 jobs during six years of construction.

The provincial government is expected to launch environmental impact studies on the project as soon as a final agreement is reached -- likely by December -- and work could start in 2004-2005.

The agreement in principle also allows Quebec to develop other natural resource sectors in the region, including forestry and mining.

The Cree will be allowed to use the royalties as they see fit to foster economic growth among their communities, made up of 60 percent of youths under the age of 25.

($1=$1.57 Canadian)