To ensure indigenous citizens were not ignored while resource extraction projects were carried out in their territories, consultation requirements were imposed on companies working on Crown lands, but those usually just led to one-time payouts to local indigenous bands to get them out of the way. Sometimes efforts were made to hire local people or contract their companies. The indigenous people were seen as a local hindrance to pacify and bypass and weren’t seen as a potential partner or asset for the operations.
In the Northwest Territories, companies operating were compelled to partner with indigenous people. I spent three years working in the Mackenzie Delta region surveying oil and gas exploration projects. Our “partnerships” involved cutting a deal with a local indigenous person and dedicating a small percentage of the gross revenues from the project to them. While that did spread some of the money around, real working partnerships weren’t fostered and when the job was done, contractors headed back south, and the partnerships dissolved. The partnerships were a form of tokenism at best.
The TC Energy deal changes everything. A consortium of 72 indigenous communities has become a major shareholder in the company. They have not been bought off. They have been brought to the table and have a shared interest in the prosperity of TC Energy’s operations. A relationship that used to be adversarial is now a true partnership. The indigenous consortium will benefit from the success of TC Energy and the profits will ease the economic challenges plaguing isolated indigenous communities.
The partnership will facilitate the expansion and operation of TC Energy’s gas pipeline network as opposition from indigenous groups will fade. People living in areas potentially impacted by pipeline activity will no longer have to ask, “What’s in it for me?”
Not everybody will be happy with this partnership. Environmental activists opposed to all oil and gas development, however, will have lost some potential allies in their battle against progress. Activists from distant urban centres will find themselves less than welcome if they try to blockade a project where the local indigenous band owns a stake in it. The groups will no longer be able to pretend they speak on behalf of local indigenous interests.
It’s not that indigenous partners will tolerate irresponsible development in environmentally sensitive areas. Their voices will now be at the table seeking a balance between the preservation of land and extracting a material benefit for their people.
The TC Energy partnership with the indigenous consortium doesn’t come without risks. The equity stake is being purchased through a loan guarantee from the Alberta Indigenous Opportunities Corporation (AIOC). The AIOC is a Crown corporation backstopped by the provincial government. If the deal goes off the rails down the road and the indigenous consortium defaults on the loan, taxpayers will find themselves on the hook. Albertans already lost $1.3 billion when the government invested provincial funds and offered loan guarantees in the Keystone pipeline project. The partnership with TC Energy isn’t as high-risk as the Keystone project was, but no loan comes without risks.
Companies wanting to take part in resource extraction in Canada now have a path toward future approvals through partnerships with indigenous interests. Not only will oil and gas companies benefit from these partnerships, but so will forestry, fishing, and mining companies. As isolated indigenous bands see the benefits of responsible resource development in their regions, they will seek out new partnerships.
Federal regulatory policies have been one of the biggest hindrances to resource development in Canada for years. If projects weren’t shut down outright, they were driven out of existence through being mired in heavily onerous regulatory requirements. Federal ministers will be less inclined to try to slow-roll or shut down resource developments when they know it will lead to indigenous leaders showing up on the doorstep demanding to know why they can’t do business.
Projects must be developed with the interests of the indigenous population and the company shareholders in mind. With partnerships, those interests are now mutually beneficial. The TC Energy partnership with the indigenous consortium could lead to a boom in new resource development—and Canada’s economy can certainly use it.
