Investing in Indigenous communities is not only the right thing to do, writes Brian Lee Crowley. It also looks good on a balance sheet.
By Brian Lee Crowley, Oct. 27, 2016
Out of the fog and confusion created by two generations’ worth of Indigenous political activism, constitutionalisation of Aboriginal and treaty rights and judicial decisions we are seeing emerge some points of clarity on which we can base genuine reconciliation between Aboriginal and non-Aboriginal Canadians, particularly where business development is concerned.
Such reconciliation is desirable for many reasons, not least of which is that it is the right thing to do and has been far too long in coming. But for those in the business community who are unmoved by such sentiment, here is the business case for reconciliation.
About one half of all business investment intentions in Canada at any one time is destined for the natural resource sector, those mines, pipelines, smelters, mills and more that unlock the value of Canada’s vast resource endowment. Almost the entirety of that investment is proposed in regions where Aboriginal, Inuit or Metis communities live. And virtually none of it can occur today unless the Aboriginal people affected have been carefully consulted and good faith efforts made to accommodate their legitimate interests.
Proponents of resource projects such as TransMountain Pipeline or Pacific NorthWest LNG might be surprised by my statement that some points of clarity are emerging in how to make this new relationship work. The news seems full of stories of what appears to be intractable Aboriginal opposition to such resource-based development.
That may be, however, because the business community has not yet caught up to what the Indigenous world is trying to tell them. Look, for example, at the testimony of the First Nations Major Project Coalition with the support of the First Nations Financial Management Board (FNFMB) before a Senate committee this week. In the eloquent and elegant case laid out there by a Coalition representing 23 First Nations you can see first-hand what they are looking for to be willing and indeed enthusiastic partners in development.
Proponents of resource projects such as TransMountain Pipeline or Pacific NorthWest LNG might be surprised by my statement that some points of clarity are emerging in how to make this new relationship work.
Four points leapt out at me from their brief to the Senate.
First, Aboriginal people cannot be an afterthought. They have to be full participants and decision-makers from the outset in projects that affect them and their land.
Second, things must be done in the right order. Aboriginal concerns about environmental protection must be addressed first, and that includes not just the effects of any single project, but the cumulative effects of what can potentially be numerous projects on the same territory. Only after they are satisfied that the environmental issues can and will be successfully addressed will Aboriginal communities look at the economic merits of individual projects.
Third, First Nations want a reasonable share of the economic benefits of projects, not just during the development phase, but over the project’s entire life, including the ancillary benefits that such projects make possible in the wider economy.
Finally, a point that weaves all the others together, First Nations are coming round to an understanding that ownership has its privileges. In other words they see that if they want to be taken seriously in the business and financial world, if they want to be decision-makers and not just observers, if they want to capture a full share of project benefits, they have to be at the table as owners and risk-takers. In other words, they need to have an equity share in projects on a business basis. That means they must be able to borrow capital, invest it on business terms, and share the risks and rewards that come with it.
First Nations are coming round to an understanding that ownership has its privileges.
One roadblock, then, is that the mechanisms do not yet exist for Aboriginal communities, encumbered by the limitations of the Indian Act, weak balance sheets and underdeveloped business capacity, to find the capital to be the participants they want to be in these projects. First Nations are already thinking about how to find access to such capital, with the FNFMB playing a vital supporting role, including in establishing high standards of business transparency and probity among participating Aboriginal communities.
Another roadblock is the institutions of Aboriginal governance. The scale of the opportunities now opening up before some communities is immensely larger than anything they have experienced before and there is great anxiety and trepidation about how to proceed. Put that together with weak governance structures and the all-too-real risk is that a deal struck with one band council to proceed with a project will be repudiated in a band election a year later, with disastrous consequences not only for the project but for the credibility of communities as business partners.
Here too though Aboriginal communities are aware of the problem and are seeking their own solutions, envisaging for the first time decision-making that could durably engage all the First Nations in a region affected by development.
These ideas may not be the fully formed and tested solutions we all need, but they shine a bright light on the principles on which those solutions will ultimately be based.
Brian Lee Crowley (twitter.com/brianleecrowley) is the Managing Director of the Macdonald-Laurier Institute, an independent non-partisan public policy think tank in Ottawa: www.macdonaldlaurier.ca.