Chief Dan George: First Nations are eyeing equity partnerships

Chief Dan George’s guest column in The Province, 22 February 2019: 

Many B.C. First Nations have benefit agreements with LNG and other resource projects, offering reliable and predictable revenues for Indigenous communities, their people and their governments.

Now there’s growing interest in taking a more ambitious step: going for equity ownership, a share of the corporate action. That offers the prospect of increasing returns, not just fixed payments, as a resource project hits its full economic pace. It could also mean longer-term revenue flows linked to the economic life of the project.

One interesting opportunity is presented by TransCanada (soon to be called TC Energy). It’s working toward the sale of as much as a 75-per-cent stake in the Coastal GasLink pipeline project, which would supply natural gas from northeastern B.C. to the LNG Canada project at Kitimat.

The elected councils of 20 First Nations along the pipeline corridor already have approved agreements with Coastal GasLink.

The company has earmarked $620 million in contracting and employment opportunities for northern Indigenous businesses. And an additional $400 million is to be awarded to First Nations and local community businesses during construction.

Now attention is being focused on the potential for taking an actual equity share in the line.

It’s yet another way to bring in revenue to address the poverty and social issues that plague First Nations: astronomical unemployment rates, child-welfare cases, suicides, addictions, low levels of education and poor housing conditions.

Already we have seen First Nations buy oil wells and oilsands initiatives in Alberta and negotiate ownership stakes in proposed pipelines and storage projects.

Under active discussion is the interest of First Nations in ownership of the Trans Mountain pipeline project that is owned by the federal government — meaning potentially 100-per-cent Indigenous ownership.

On that, the Indian Resource Council is working on a proposal to Ottawa to acquire the pipeline project. The IRC represents 134 First Nations that have oil-and-gas resources on their land, or would see their territories crossed by the Trans Mountain expansion.

The IRC says the majority of its members want to buy the project and make the pipeline 100-per-cent owned, operated and monitored by Indigenous people.

“We all want a safe and proper environment, the environment is so key,” says Stephen Buffalo, president and chief executive officer of the IRC. “But we can continue to still do some economic development and have that balance. And that’s what we need to strive for — to find that balance.”

Another proponent of Indigenous equity ownership is Joe Dion, president and CEO of the First Nations-owned Frog Lake Energy Resources Corp. in Alberta. He says First Nations have traditionally settled for “the smaller stuff” — benefit payments or royalties from non-Indigenous energy firms.

But now, Dion says: “The revenue-sharing piece is here. It’s assets that create cash flow. We get a piece of the action. That is where we have to go.”

Looking at the Coastal GasLink pipeline, the idea of equity ownership is well worth pursuing, since the elected councils of all 20 First Nations on the route have approved the pipeline and others have endorsed the LNG Canada project that it will feed.

It will obviously take time to explore the potential for First Nations to invest in the Coastal GasLink line. And there may be other projects on the table in B.C. that will also be open to true Indigenous partnerships.

If equity partnership is a faster way of closing the shocking gap between the standards of living of First Nations and the standards generally enjoyed by non-Indigenous Canadians, First Nations deserve the chance to fully assess the opportunity and to participate should they wish.

The First Nations LNG Alliance is ready to help, although any decisions will of course be up to each Nation and its people.

Dan George is the elected chief councillor of the Ts’il Kaz Koh First Nation (Burns Lake Band) and chair of the First Nations LNG Alliance.

The guest column as it appeared in The Province on 22 February 2019.

It also ran in The Saskatoon StarPhoenix and The Regina Leader-Post.

(Posted here 23 February 2019)