Challenges to the Trans Mountain pipeline expansion, the cancelled Energy East pipeline and Ottawa’s killing of the Northern Gateway pipeline all provide headlines on deals that are very — and understandably — challenging.
But away from the news stories, in many parts of the country First Nations are working with energy companies on more straightforward deals.
“From coast to coast to coast, First Nations are developing joint ventures in energy,” says Candice Metallic, a partner at Maurice Law, an Indigenous-owned national law firm. “You only have to look at the wind farms, the transmission lines, the development of hydroelectricity — things that are consistent with First Nations values.”
And often they’re not just signing impact-benefit agreements, they’re taking an ownership stake. “For renewable energy joint ventures I think 51 per cent ownership is the norm for First Nations. And I believe the major companies are more open to those types of deals.”
Many Indigenous groups have opposing internal views on certain energy developments, Metallic, a citizen of the Listuguj Mi’gmaq Nation, acknowledges from her office in Pikwakanagan, near Ottawa.
“Even if you look at BC and Alberta, there are First Nations there who are more business-minded and want to develop an economy for their communities. They are more accepting of pipelines and those types of projects.
“I don’t think opposition to pipeline projects is necessarily the overwhelming position of First Nations across the country.”
In fact, late last year, dozens of First Nations leaders met to discuss purchasing the embattled Trans Mountain pipeline from the federal government.
The Indian Resource Council (IRC), which represents 134 First Nations with oil and gas resources on their land, said afterward the majority of members want to acquire the pipeline project and make it wholly Indigenous owned and operated. It’s been reported the IRC is in talks with Ottawa, which bought Trans Mountain to try to shepherd it through all the required approvals and litigation.
But at the end of April, in an open letter, the Union of British Columbia Indian Chiefs laid out a myriad of reasons why the IRC should back off, including cost overruns and a decreased demand for oil due to climate change. There was also a veiled threat the battle would continue no matter who owns it. “We would remind you that it would only take opposition from a single Nation to cause significant delays and further cost overruns.”
Metallic says the stance was not entirely surprising. “Unfortunately there will always be people who are just not open to any type of development in any part of their territory, and people who want to get involved in business to economically benefit their community. That’s a reality.”
Reconciling the two views may not always be possible, she says.
, an energy, Indigenous and environmental law partner at Gowling WLG (Canada) LLP
, sees more and bigger Indigenous-owned energy projects coming in the future.
In Alberta, there were roughly 330 Indigenous-owned enterprises doing business with oil and gas operations in 2017, according to the Canadian Association of Petroleum Producers. And Premier Jason Kenney has promised to form a new $1-billion Crown corporation to help Indigenous communities invest in resource projects, including pipelines.
Meanwhile, Seaman points to the Eagle Spirit pipeline, a proposed $16-billion First Nations-owned pipeline that would be operated in conjunction with four Canadian pipeline unions, including Teamsters Canada. It would ship oil from Fort McMurray in Northern Alberta to Prince Rupert, BC — and to the Pacific Ocean for export, finally expanding Canada’s market beyond the US.
“These days equity ownership is very much front and centre,” says Seaman, a citizen of the Manitoba Métis Federation. He says projects are “an easier sell, in a sense” in BC, where no historic treaties were signed with the federal government, which means title to the land was never ceded.
That gives First Nations full say — and presumably greater leverage on an ownership stake — on any project that impacts their land.
When First Nations communities are part owners, it ensures there have been detailed discussions, which helps avoid later claims that the Constitutional duty to consult with the affected communities was not met.
“There’s often lots of heartburn around the duty to consult and the regulatory regime in Canada not providing certainty,” Seaman says from his Vancouver office. “When you have the Indigenous community as part of the commercial enterprise, they are a de facto project proponent. They’re part owners. It doesn’t make sense to be consulting with yourself, if I could put it that way.”
That said, he points out that participation still depends on the community and the type of project.
“There are storage terminals, electrical transmission lines and alternative energy projects. Then there are pipelines that carry a substance like heavy crude, which tend to be more polarizing than a transmission line or a pipeline carrying gas.”
But Seaman doesn’t see the end-game for most Native groups in Western Canada as full ownership of new energy projects. “It could happen, but what we’re seeing is more of a consortium kind of a model because one of the ways you manage risk is to have more than one partner.”
To own or to partner, it’s a conundrum many Native communities in Québec wish they had.
In most of the Maritimes and the Gaspé Peninsula in Québec, First Nations bands signed Peace and Friendship Treaties which, unlike the historic treaties in other parts of Canada, did not involve surrendering title.
But Indigenous groups in swaths of Québec and Ontario never signed any kind of treaty. Many of them are poorly treated by energy developers, says James O’Reilly of O’Reilly & Associés in Montréal.
“In many cases, they don’t acknowledge it’s Indigenous land,” says O’Reilly, who has specialized in Aboriginal law, with an emphasis on the advancement and protection of Aboriginal rights, for more than 40 years.
“They say, ‘We’ve got our permits, we’ve got our authorizations from the Québec or federal government and we have to talk to you, but that’s it.’ They say, ‘You don’t have your rights proved. Go prove your rights, take the governments to court.’”
The problem is many bands are small or poorly organized or don’t have the money for a long court battle, he says.
“My view is that the companies like Hydro-Québec, the biggest energy developer in Québec, along with the major mining and forestry companies, typically do not recognize the true rights of the Aboriginal peoples.
“In my view you can easily say they ride roughshod over the rights of the Innu, the Algonquin and the Atikamekw Nations and the Mi’gmaq. They haven’t been able to ride roughshod over the Cree, the Cree have fought them back each time and they know that.” The Mohawk are also powerful, he adds.
“I’d like to be able to tell you that things are great but from my experiences in court that’s not the case,” says O’Reilly, who was named an Honorary Chief of the Samson Cree Nation of Alberta, among other Native accolades. “Things are as difficult now or more difficult than 45 years ago.
“With what’s happening out west, the Trans Mountain pipeline possibly being stopped, maybe people see Aboriginal groups as pretty powerful in affecting large energy developments. But it’s not like that all over the land.”
For those bands that want to get involved in their own projects, financing remains one of the biggest obstacles, says Nancy Kleer
of Olthuis Kleer Townshend LLP
, which specializes in representing First Nations.
“Economic-development capacity in First Nations governments is one of the issues, they don’t have a lot,” she says from Toronto. “They’re working on it but they’ve had limited involvement in business development because they’ve been living on tiny little reserves and not able to raise capital easily. It’s been challenging.”
Kleer says the Indian Act
precludes them from using their land as security, so they have little to backstop loan requests.
“A lot of First Nations are looking at business development to benefit their communities, so they set up limited partnerships to try to get involved. Joint ventures are how a lot of economic development happens at this point, so many are now working on building capacity internally.”
Some groups are asking the project proponent for loans to allow them to acquire an equity stake, she says. They are also training their own people to develop and run projects.
She points to the East-West Tie transmission project in Northern Ontario, where six Northern Superior Anishinabek First Nations are partnering with NextEra Energy Canada, Enbridge Inc. and OMERS Infrastructure on a 450-kilometre transmission line.
The six Nations also formed a partnership and created an economic development company, Supercom Industries, to help contract, train and employ First Nations people on the project. Supercom already has 195 graduates, including surveyors, power-line crew, heavy-equipment operators, mechanics, electricians and work-camp support staff.
“People are getting good educations. They’re also going to university, getting business and engineering degrees, and bringing their expertise back to their communities,” says Kleer. “It’s a slow process, but it’s happening.”