Canadian governments are turning their attention to fixing the damage the COVID-19 pandemic has wrought on our economy. Billions of dollars have already been earmarked for green infrastructure projects that will drive growth and jobs for decades to come.
As Canadian governments and private investors begin to pour money in the rebuilding of our economy, Indigenous people – many of whom will be asked to host these projects on their lands – see an opportunity to be fully included in the environmental, economic and employment opportunities that these projects can offer.
Last year, the First Nations Major Project Coalition (MPC) undertook a worldwide survey to learn how local and Indigenous people in other jurisdictions meaningfully benefited from infrastructure projects in their countries and regions. The final survey report detailed 60 examples of local and Indigenous equity ownership arrangements in energy generation, transmission and distribution infrastructure.
MPC found that the main drivers of this growth in equity ownership is an increase in global demand for clean energy, a growing desire of Indigenous people to have a say in all aspects of resource development in their territories and an interest in acquiring long-term revenue streams that can fund self-determination priorities.
From an Indigenous perspective, equity ownership is the culmination of a 70-year process that has seen an increase in court decisions favourable to Indigenous rights, increasing availability of legal and technical resources, changes in societal attitudes and the rise of internet-supported activism and knowledge sharing.
Capitalizing on these changes, there has been a corresponding increase in Indigenous influence on large capital and infrastructure projects through negotiated participation agreements with companies and governments. Many Indigenous people are no longer interested in being passive hosts of infrastructure projects but want to share directly in the prosperity of projects via preferential contract bidding, revenue sharing and, increasingly, equity.
Equity ownership of resource and infrastructure projects is increasingly seen by Indigenous people as a means to proactively exercise rights, protect community environmental interests, and share in the economic benefits derived from traditional territories.
This global trend of Indigenous infrastructure ownership has already taken hold in Canada. MPC found numerous initial examples of Indigenous equity holdings in B.C. and Ontario power generation and transmission projects. And this trend will rapidly increase in 2021.
The biggest driver of this change will be the United Nations Declaration of the Rights of Indigenous People (UNDRIP). Already in effect in B.C., and soon nationally, UNDRIP frames how Indigenous people see development and their ability to direct decisions that support their interests.
Adding to the equity trend is the increasing availability of lower cost capital to fund First Nations infrastructure investments. Ontario maintains a $650 million Ontario Aboriginal Loan Guarantee Program to support Indigenous participation in green energy infrastructure, including wind, solar and hydroelectric projects.
The First Nations Financial Authority (FNFA), a non-profit, Indigenous-run institution, provides First Nation governments with access to low cost, long-term loans for essential infrastructure and economic development. This year the FNFA provided more than $1 billion in low interest loans to First Nations.
And banks are starting to use capital market instruments like bonds to assist First Nations finance revenue-producing investments. In 2017, RBC led a $545 million bond issue to finance the purchase of 49% of the Alberta East Tank Farm Development, a bitumen storage, blending, and cooling facility operated by Suncor.
The new reality of Indigenous infrastructure owners has significant benefits for First Nations and Canada alike, including greater investment certainty and reduced opposition to projects, First Nations with access to capital sources leveraging investment market funds to invest in the national economy, and the improvement of environmental, social, and governance sustainability ratings of utility companies to attract private sector capital.
Token consultation will no longer be enough to ensure Canada’s 2021 post-COVID-19 success. Going forward, First Nations expect to be equal partners in all aspects of the economy, including nationally important green infrastructure. •
Mark Podlasly is the director of economic policy and initiatives at the First Nations Major Project Coalition and a member of the Nlaka’pamux Nation.
