Walk a Mile in Someone Else’s Shoes: A New Reconciliation Project for an Old Pipeline
A few weeks ago, I had the opportunity to listen to an Indigenous storyteller. To paraphrase their analogy: imagine having some guests over to your house. You have your family portraits up on the wall, herbs and flowers in the garden, and the furniture nicely set up. Think about how you would feel if your visitors started moving things around, pulling up your plants, or taking your favourite seat without talking to you first. Would you feel better if they explained why they disrupted your home, compensated you for the changes, or simply respected you as the owner of that property, to begin with?
While it might seem like a simple story, it provides some context for how First Nations might feel about interprovincial pipelines crossing their traditional territories, and why they are interested in mitigating any adverse effects to their ways of life. We are all awaiting a final decision from the Federal Government on the contentious Trans Mountain Expansion (TMX) pipeline project, due tomorrow, June 18th. In the weeks leading up to this Day of Reckoning, several First Nations’ suitors have expressed interest in purchasing the project from the Canadian government. In particular, Project Reconciliation, the Western Indigenous Pipeline Group, and Iron Coalition, have expressed interest in the Trans Mountain project.
Without getting into the technical details and lengthy history of TMX, the proposed $7.4 billion pipeline would move oil and refined products 1,150 kilometres (not quite 1,000 miles) from Edmonton, Alberta, to Burnaby, British Columbia (BC). Despite a previous approval from the Federal Government, in November of 2016, the Federal Court of Appeal (FCA) cancelled the Order in Council in August of 2018. In its decision, the FCA quashed the Order and volleyed it back to the Governor in Council, based on the National Energy Board’s ‘flawed’ process and findings regarding marine safety, as well as Canada’s failure to fulfil its duty to adequately consult Indigenous Peoples. Remarkably, the government concluded its third and final phase (Phase III) of consultations prior to the court’s decision.
Following the FCA’s decision, the Minister of Natural Resources announced the government’s three-step plan in October of 2018:
· First, no appeal would be made – likely to save time and to avoid litigation fees;
· Second, Canada would restart the Phase III consultations with all 117 First Nations impacted by the project;
· Third, the government appointed a former Supreme Court of Canada Justice, Honourable Frank Iacobucci, to oversee the process and ensure that the consultations would match the FCA’s expectations.
At the end of April 2019, Canada reported that it had consulted over 100 communities and had nine consultation teams, with over 60 team members on the ground. So far, it seems like they are on track to right their wrongs. To remediate the FCA's other concern, in February of 2019, the NEB released its Reconsideration Report, which recommended that the government approve TMX, with the justification that it is in the Canadian public interest. If Cabinet does approve TMX, the NEB will impose 156 conditions upon the project.
With that approval comes the opportunity for the current federal and provincial governments to reconcile – giving the First Nations an opportunity to participate in operations and planning, which includes determining the allocation of benefits. Assuming that the pipeline is approved, the federal government could sell off its $4.5 billion portion to interested parties – a decision which many Canadian taxpayers would also applaud.
With a majority stake, such as the one proposed by Project Reconciliation, TMX would be owned and operated by a consortium of Canadian First Nations and other investors. Such an ambitious dealing does not come without its challenges, including securing multi-billion dollar debt financing, arranging shipping contracts, and reaching a consensus with our British Columbian neighbours, who might make competing claims to traditional lands.
To mitigate some of these risks, the new Alberta Government announced that it will introduce legislation to create the Indigenous Opportunities Corporation (replacing the current Aboriginal Opportunities Corporation). This Crown Corporation intends to provide up to $1 billion in funding, which could support First Nations wanting to claim part of the TMX. These levers could take the form of loan guarantees or other Provincially-supplied financial instruments, which might cover part of the pipeline’s $7.4 billion price tag or fund other projects of interest.
Consistent with Canada’s principles respecting the government’s relationship with Indigenous peoples, an opportunity such as TMX, if properly executed, could support the First Nations’ right to self-determination and provide benefits for generations to come, including education and career opportunities. For example, Project Reconciliation estimates that its proposed 51 percent ownership stake could yield up to $12.5 billion in earnings (before interest, taxes, depreciation, and amortization), over the next 50 years. Out of this, the $200 million per year (80 percent) would be re-invested into a sovereign wealth fund, for infrastructure and environmentally sustainable initiatives; the remaining 20 percent would be distributed amongst participating Indigenous communities.
If TMX can prove to be a successful model for business and reconciliation, one might expect many more projects (energy-related or not) to strengthen our relationship with our 634 First Nations neighbours, going forward. After all, what better way to consult and engage than to have a seat on the board – ensuring that you have a say in your community’s present and future development.