In public debates over pipelines, mines, dams and other major infrastructure projects, governments often make assurances that any communities or other parties adversely affected by the development will be “compensated” for losses. The language sounds fair and rational: Impacts to lands and people that remain after mitigation will be measured, damages calculated, and payments provided to those who experience negative impacts.

But for many individuals and communities, this promise rests on a profound misunderstanding that at times borders on an outright lie — one that is usually convenient for commercial interests driving the development.

The problem is more fundamental than simply the flawed methodologies used to evaluate environmental damages and assess compensation, which typically focus on tangible losses that can be counted — jobs eliminated, fish harvests lost, acres flooded or revenues forgone. Using economic tools, these measurements are then converted into dollar amounts.

Yet the losses that often matter most are ones that impact evaluation frameworks generally ignore — the hard-to-measure consequences of an action that are typically overlooked because they lack common definitions and are not easily enumerated, quantified and expressed in monetary terms.

What impact evaluations often fail to include

Such neglected losses can be caused by hydroelectric dams (in Canada, the U.S. and India); mining initiatives (in Ontario and Quebec, including current battles centred around the Ring of Fire); forestry practices (in Australia and Western Canada); and pipelines (from Trans Mountain in the west to Enbridge’s Line 5 into Ontario). Many of these initiatives end up mired in lengthy court cases, with solutions left to judges rather than elected officials or science-based assessments.

The problem is not simply one of oversight. It is also structural, built into current systems to support certain economic interests while ignoring those of affected communities. As a result, important losses or gains that are the hardest to quantify (effects on cultural knowledge, the right to a robust role in decision making, mental health, the protection of sacred places, relationships between communities and ecosystems) are often excluded altogether from decisions made on the basis of project impact evaluations or compensation assessments.

What remains are the ramifications that are easiest to price out. This produces a troubling pattern. The bottom line of impact and benefit agreements may look substantial on paper, yet too often the deepest harms created by a large development project remain invisible, neither acknowledged nor evaluated.

Nowhere is this felt more strongly than in Indigenous communities in Canada and around the world. Although each Indigenous population is unique, the majority have spent generations living in, connected to and dependent on a place that is home, where lands and waters are more than economic assets.

Non-Indigenous researchers like ourselves often hear about neglected losses including relationships to land and the continuity of local knowledge or oral-historical records; degradation of long-standing governance systems and social relationships; fundamental changes to the natural environment; and limitations on access to hunting and fishing sites. These losses can undermine the collective identities of communities and degrade their responsibilities to families and future generations.

These cultural, language, social and knowledge losses cannot be captured in cost-benefit analyses, and when such intangible devastation is ignored compensation becomes less an act of justice than an accounting exercise that legitimizes harm in the name of promoting either economic development (and its promise of jobs and revenues) or the public interest (vaguely defined but supportive of the status quo and economic interests).

Who sets the rules?

The problem of partial compensation is not just incomplete measurement but one of framing and power. Systems of impact assessment and compensation do not simply assess losses, they define what can even be considered losses, how they should be described and the extent to which they may be compared with other impacts. They establish rules that determine which values are visible, which are marginalized and what trade-offs are deemed legitimate.

Expanding the scope of analysis to accurately characterize what has been lost is an important step forward, reflected in several recent successful impact and benefit agreements and in the Supreme Court of Canada’s landmark 2021 decision that the Crown’s fiduciary duty “does not melt away” in the face of competing interests. But it fails to resolve the deeper question of who has the authority to set these rules, or whether all valued impacts should be considered comparable within an assessment or decision framework that heavily relies on monetary valuations of impacts.

Recent work in the environmental and social sciences, often led by Indigenous scholars, has documented the systematic nature of this failure. Despite highly visible initiatives like the 2007 United Nations Declaration on the Rights of Indigenous Peoples, and more recent legislation here in Canada, many impact assessments that underlie project proposals and compensation agreements have been found to emphasize economic and environmental metrics while neglecting other critical impacts essential to the continuity and identity of the impacted communities.

However, encouraging advances in interdisciplinary assessment methods — drawing on psychology, anthropology, ecology, economics and Indigenous knowledge — make it possible to identify and represent a broader range of impacts. These approaches help ensure that what matters to impacted communities and their well-being is not ignored.

Yet, even when these values are comprehensively articulated and carefully weighed alongside economic effects, a critical tension remains.

Recognition is not the same as legitimacy or reconciliation. A process may acknowledge profound cultural losses and treat them as factors to be balanced against impacts like jobs, revenues or energy security. Yet doing so risks reducing deeply held relationships and responsibilities into line items on a ledger — vulnerable to decision makers trading these against other impacts within a framework that the affected communities did not design.

This problem runs deeper than flawed methodology or misplaced ethical priorities. It reflects a broader psychological and social dynamic described as “virtuous violence,” whereby harmful actions are justified when viewed as serving a greater good. Wars are fought to defend freedom. Harsh punishments are imposed in the name of justice. Destructive projects are defended as necessary for economic progress or energy security.

What 50 years of buried data tell us about Canada’s mining oversight

Ottawa needs to step in before nuclear waste project goes any further

When policymakers legitimize development projects for bringing jobs, growth or energy independence, any harms inflicted on communities or on the environment can be cast as lamentable but necessary sacrifices. The narrative becomes morally reassuring: The damage is regrettable, but it serves the public interest. In this framing, the moral and methodological violence associated with ignoring cultural and social losses becomes easier. If a project is seen as benefiting the public interest, any suffering it causes is rationalized as unfortunate collateral damage rather than injustice.

The concept of virtuous violence helps explain why impact assessments and compensation agreements so often discount what affected communities value most. It is not simply a case of these values being difficult to measure; fully acknowledging them would challenge the very assumption that development is inherently beneficial. Recognizing these harms as central, rather than peripheral, risks acknowledging that some projects should not proceed at all.

Some harms are not negotiable

The issue is not how much compensation to offer, but whether the harm itself is even permissible. No amount of money, no balancing of quantified impacts can restore what is lost when key social or cultural relationships are damaged or destroyed. For marginalized communities, treating these losses as being compensable misrepresents their meaning and undermines the very values that the assessment seeks to recognize.

A more legitimate approach to compensating harms requires moving beyond improved methods and more comprehensive accounting toward rethinking the rules that frame the overall decision-making process. This includes defining how decisions are made; what counts as an impact; identifying which consequences are non-substitutable and irreversible; determining how priorities should be represented; and deciding where and when trade-offs are acceptable.

It also requires acknowledging that fair outcomes may not always take the form of negotiated payments or reparations. In some cases, communities may reject proposed developments outright because the losses at stake are simply not available for exchange.

Recognizing this possibility does not impede decision making but rather clarifies it, shifting the focus from how to compensate harms after the fact to whether, and under what conditions, such harms should be allowed to occur in the first place.