Indigenous Ownership of Major Projects is Key to Economic Growth and Empowerment

What are the key drivers of change within Canada’s Indigenous economy?

I think there has been a paradigm shift in favour of the Indigenous economy in Canada. This is partly because of the advances in case law through a number of Supreme Court cases. Moreover, there is now government recognition of Indigenous issues as well as a sense of economic empowerment among Indigenous communities. We now stand up and take part in Canada’s economy.

“In Canada’s current landscape, it is very hard, if not next to impossible, for governments to ignore the interests of Indigenous people in natural resources policymaking.”

We are the owners of the land and it is time to do business according to our laws, traditions and interests. This does not happen overnight, we have a long way to go. I have been working in this realm for about 15 years and have seen a lot of it change over that time, primarily through legislative advancements that were First Nations led. For example, the First Nations Fiscal Management Act and the First Nations Commercial and Industrial Development Act moved communities away from the restrictiveness of the Indian Act and towards social and economic self-determination. In Canada’s current landscape, it is very hard, if not next to impossible, for governments to ignore the interests of Indigenous people in natural resources policymaking.

What are the goals of the First Nations Major Projects Coalition (FNMPC) and how does project ownership fit into the Aboriginal economic development system?

First Nations communities needed greater access to capital to become owners of the development projects proposed for their territories. FNMPC initially came to be to fulfil that need. It was started in 2014 by 11 communities in Northern British Columbia, with the support of the First Nations Financial Management Board. Today, we are a membership of nearly 50 operating communities, five provinces and one territory. FNMPC was originally mandated to build capacity among First Nations so that they could make informed business decisions regarding project development. There are many platforms in this country like the Assembly of First Nations (AFN) that provide a good service, but many of them are politically driven. Our leadership wanted an organization that was non-political, business-focused and with no specific focus on any industry. We are a thinking and technical partner to our communities and do not take a position for or against projects. Rather, we let communities retain their own decision-making authority while offering independent assistance.

“If done right, a major project presents an opportunity for First Nations to finally take advantage of Canada’s economic mainstream through infrastructure ownership in their territories.”

If done right, a major project presents an opportunity for First Nations to finally take advantage of Canada’s economic mainstream through infrastructure ownership in their territories. When you have ownership, you have skin in the game. Sitting at the decision making table also helps communities influence other aspects of the projects, such as their environmental impact and mitigation strategies. First Nations should be sitting on the board of directors, making decisions with industry and enabling projects to move forward. There is a broad willingness and recognition by First Nations that economic development is required for long-term well-being. However, while governments and industry players are well equipped to make business decisions, Indigenous communities are often not. FNMPC wants to level the playing field to make sure that there is fairness at the project negotiation table when the communities get there.

“We must try to create sub-economies off of major project opportunities; the further a project dollar can go within Indigenous communities, the faster their economies will develop.”

The First Nation Major Projects Coalition is also a piece of the procurement puzzle since we are at the forefront of project development. If the major projects we are involved in move forward, then we would want to see First Nations lead their procurement and contracting. I think the Canadian Council for Aboriginal Business (CCAB) has some models that would dovetail quite well into what we are doing. You need projects in order to have procurement opportunities, so FNMPC sees itself as a medium to increase Indigenous procurement. First Nations and the private sector need to work together to create the opportunities for Aboriginal businesses in the supply chain of major projects. We must try to create sub-economies off of major project opportunities; the further a project dollar can go within Indigenous communities, the faster their economies will develop.

How must government and industry engage and include First Nations in the planning of future projects?

A project that does not satisfy the Indigenous interest creates a high degree of risk to investment. I think the Trans Mountain pipeline is a good example of this. Canada needs a solution that mitigates that risk and provides independent advice to Indigenous people for business decision making. FNMPC has a process called Project Identification and Capacity Support, which includes scoring criteria that our members developed to score future development projects according to the First Nations’ viewpoint.

“A project that does not satisfy the Indigenous interest creates a high degree of risk to investment. […] Canada needs a solution that mitigates that risk and provides independent advice to Indigenous people for business decision making.”

About a year ago, I sat down with Moody’s Investors Service to discuss this framework. They told us, in principle, that if our criteria do indeed determine if a major project satisfies Indigenous interest, a higher credit rating could be achieved on that project. Both industry and government must recognize that First Nations have the capacity, when provided with the right tools, to develop processes that ensure higher predictability and security for their investment. That cannot come from government or industry; it has to be First Nations-led. But, industry and government have to be prepared to accept the fact that First Nations are coming to the table with their own solutions.

How can First Nations, industry and governments work better together when assessing proposed major projects’ impacts?

FNMPC has developed an Environmental Stewardship Framework document through our members’ input. It is comprised of six key components all designed to put Indigenous traditional knowledge and cultural values at the forefront of mitigating the environmental impact of major projects. There is a misconception among the Canadian public that Indigenous people are often caught in the middle of major project development and environmental stewardship. We are sometimes portrayed to be anti-development, which is not what we see at our tables. We do see paramount concern for the environment; our top criterion in the major projects identification framework is environmental stewardship. However, we and our members recognize that there has to be predictability across the board as to how Indigenous people approach environmental stewardship. Of course, we must recognize that each Indigenous community is unique, but there needs to be a baseline approach that is common. Historically, successive governments have used the environmental assessment process as a tool to divide and conquer the interests of First Nations so that projects could proceed without opposition. That kind of mindset has resulted in court challenges and further delays.

“We are creating a project impact assessment process that is based on Indigenous values but is also commercially understandable to businesses.”

We are creating a project impact assessment process that is based on Indigenous values but is also commercially understandable to businesses. The ultimate goal is for First Nations communities and project proponents to submit permits together, not as adversaries but as business partners. The final objective of both players is often the same, but since their approaches are different, there has to be further education. One challenge that industry needs to take up better is to get company executives out of the office and into Indigenous communities to build relationships.

How do you envision the Indigenous and Canadian economy in 2050?

In the next 10 years, Canadian First Nations will start taking ownership decisions on major projects and use the revenue derived from them to create sovereign wealth funds. When Carol Anne Hilton of the Indigenomics Institute talks about growing the Indigenous economy to $100 billion, she is not wrong in her estimates. Wealth generation enables economic diversification. As autonomous governments, Indigenous communities need that economic base to further their autonomy and go after other opportunities. Over the next 10 to 20 years, the federal government should broadly recognize that the policy mandates of its central agencies need to change. We cannot have a top-down view, which assumes that Ottawa knows best when it comes to First Nations policymaking. The current government has initiated that paradigm shift, which needs to be accelerated by the governments that follow. While the government has created the space for Indigenous people to become solution providers and take control of their future, we have yet to see it respond to our proposed solutions. So, again, I would urge the federal government to listen to and act on the advice coming from Indigenous groups. We need to take Indigenous communities’ interest in ownership seriously if we want to boost project development in Canada. It is time to think outside the box.

Part of the Indigenous Economic Development Series presented by: