Protests against Coastal GasLink are unlikely to stop the project. Instead, Chris Sankey warns that they will absolutely make it more difficult for Indigenous nations and entrepreneurs to access capital, to become owners, and to move communities towards self-determination in the future.
By Chris Sankey, December 17, 2021
Indigenous economic development has moved from impact and benefit agreements to equity ownership as the gold standard for industry engagement. Equity means an Indigenous nation is a shareholder in a project, and entitled to a portion of the profits. It also means we have more of a say in how the projects proceed, for example in its environmental performance. But because it’s hard for Indigenous nations to get financing at competitive rates, we’re often left out of projects, or they don’t go ahead at all.
A risk premium is the term to describe the additional costs imposed by investors to compensate for a higher level of risk on a given project. They are usually demanded for projects in developing nations due to their political instability, adverse government regulations or economic risks. But now, in Canada, they are regularly assessed on projects in Indigenous territories.
Now why is a risk premium being applied, you might ask? Because of the systemic protests against development in our communities, which are organized almost entirely by environmental NGOs from urban areas. Such protests are designed to delay projects and make them more expensive, through legal challenges and work disruptions. Government regulations, like the Impact Assessment Act, also make resource development in our territories riskier by adding unclear or changing requirements for consulting with Indigenous nations.
So imagine the frustration of Indigenous leaders and entrepreneurs – who are doing the hard work to attract investment, qualify for financing, and build up equity in order to create opportunities in their communities – when they see coordinated protests like #DefundCoastalGaslink, happening the week of December 20. This “Week of Action” will see environmental activists targeting the banks and insurers willing to invest in major projects in Indigenous territories. And their goal is to make those banks regret it.
I don’t think these protests will affect Coastal GasLink at all. But they will absolutely make it more difficult for Indigenous nations and entrepreneurs to access capital, to become owners, and to move our communities towards self-determination in the future. It should be condemned for the discriminatory and damaging act that it is.
These coordinated attacks don’t happen for developments everywhere. It’s always Indigenous economic development that is politicized, and always our rights that are used as part of these campaigns. It’s one more obstacle put in front of our people and it’s neither fair nor right.
Access to capital is one of the biggest barriers to Indigenous prosperity. The nature of reserve land, as defined by the Indian Act, has made it useless as collateral. The inability to own our own homes on reserve has meant most Indigenous families don’t have the ability to borrow against it to start a small business. Because of this, Indigenous communities and entrepreneurs get shorter term loans and higher interest rates than other Canadians, when they qualify for loans at all.
Years of effort have gone in to addressing this challenge. Dozens of Aboriginal Financial Institutions have been established to provide easier loans and financing to Indigenous communities and entrepreneurs. The First Nations Financial Authority and First Nations Financial Management Board were created to improve our financial management capacity. And nations everywhere have worked hard to develop relationships with banks in order to get access to the financing they need to build infrastructure and grow their business holdings.
And now I see people who don’t understand the consequences of their actions going out and sitting in the lobby of banks to protest projects in our territories – even when those projects have the support of the majority of our people and our leaders. It doesn’t matter if their intentions are good. These kinds of protests make the road harder and longer for Indigenous people to get out of poverty and back to independence.
Protesters needs to stop putting a wedge between Indigenous peoples and banks, and Indigenous peoples and industry. We need capital just like everyone else to build infrastructure in our communities and to participate in the economy. We need jobs and revenues to create opportunities for our youth.
We have enough barriers to getting out of poverty. It’s time for protesters to stop adding to them, and help us start removing them instead.
Chris Sankey is a prominent Indigenous business leader, a senior fellow at the Macdonald-Laurier Institute and a former elected Councillor for the Lax Kw’alaams Band.
