By Dan Pujdak, December 09, 2020
The resource sector is moving hand in hand with Indigenous peoples in Canada and the outcomes will be theirs to own together – literally.
From early equity to preferred procurement, Canada’s resource sector has been making strides toward implementing the Truth and Reconciliation Commission’s Call to Action 92 (CTA 92), which implores the private sector to bring reconciliation into policy and operational frameworks. This trend will set the stage for the future of domestic resource development and will change the value propositions of projects from something done by companies and investors “to” communities, to business-driven outcomes achieved “with” communities.
Buried under the headlines of contentious battles related to energy and mining are a plethora of positive CTA 92 stories over the last few years.
For instance, a high voltage transmission line completed in 2019 from Wabaun, Alberta to Fort McMurray was completed with 20 First Nations across the route approving the project. Today, a consortium of seven First Nations now owns 40 percent of the project.
This past July, the Qikitani Inuit Association signed an agreement worth more than $1 billion that will create a road map to move forward with Baffinland’s iron ore mine. Royalties from the mine will increase to 3 percent over the next five years. Baffinland has committed to local employment and procurement opportunities, backstopped by a $10 million bond.
Several weeks ago, Golden Predator Mining announced the completion of its 2020 drill program – an activity enabled by their socio-economic accord with Tr’ondëk Hwëchin First Nation.
There’s a common narrative arc here: industry and communities win by working together.
This trend will almost certainly continue into the future and First Nations are gearing up for it. This year Waubetek, a business development corporation serving 27 First Nations along the north shore of Lake Huron, announced an agreement with Laurentian University to create a Centre of Excellence for Indigenous Mineral Development. Rio Tinto has agreed to contribute $1 million over the next five years to the school. Going forward, First Nations in the region will be poised to be more than simply “employed” by the mining sector – they’ll be ready to run it. It’s a good win-win for the sector.
The idea that partnerships with Indigenous peoples is a business asset isn’t unique to the mining and energy sector. The recent announcement of fishing giant Clearwater’s billion-dollar sale to a coalition of Mi’kmaq First Nations in partnership with Premium Brands Holdings Corporation shows this is just the beginning of a Canada-wide full-scale private resource sector realignment towards CTA 92.
And there’s more to come. This past October, the First Nations Major Project’s Coalition’s Annual Report noted it will be releasing new ideas about how First Nations can work with investors and companies to define Environment, Social and Governance (ESG) standards. ESGs are defining investment trends around the world – Bank of America referred to a “tsunami” of capital moving into ESG assets – and a First Nations voice in setting standards in Canada is another positive step down the road of CTA 92. ESG assets are currently worth more than $40.5 trillion globally and there is a real opportunity for Indigenous peoples and corporate Canada to create a positive investment-driven feedback loop that reflects the substantial value of their partnerships.
The trends are positive but there’s still work to be done regarding access to capital. Dominique Collin and Michael L. Rice explored this topic well in their Macdonald-Laurier Institute (MLI) paper Evening the Odds: Giving Indigenous Ventures Access to the Full Financial Toolkit. Sharleen Gale has also unpacked it in a 2018 Globe & Mail op-ed, as have publications by the National Aboriginal Capital Corporations Associations and the Canadian Council for Aboriginal Business. Panelists on an MLI webcast this past September also shared ideas about capital. It’s a known problem with plenty of space for private-sector and public-market led solutions.
At this point, it’s becoming cliché to say good relationships with Indigenous peoples are good business. That’s a good thing. It means CTA 92 is becoming a normalized and embedded part of Canada’s business culture. And as we head into post-pandemic economic recovery, it means the resource sector will be leading the pack in helping to close the socio-economic gap between Indigenous and non-Indigenous Canadians.
Dan Pujdak is a senior fellow at MLI.