FINANCIAL SUPPORTS FOR INDIGENOUS INVESTMENTS IN CORE ECONOMIC SECTORS (2023)

Issues

Industry is adapting the way they do business, as Indigenous Nations need to be a part of decision making on future development in their territory. Recent agreements made with Indigenous Nations will bring more predictability for the province and provincial economy, while helping ensure that land management decisions are made in partnership with affected Indigenous nations. These agreements will change how natural resources projects are developed in Canada.

Indigenous participation in resource development will often include equity participation (i.e., ownership stake) opportunities, which is an important step toward achieving economic self-sufficiency. However, barriers, such as credit risk issues, loan guarantee requirements, and inability for Indigenous Nation property to be used as collateral, prevent Indigenous Nations from capitalizing on and fully benefiting from the potential projects.

Background

The BC Chamber of Commerce and its members are committed to reconciliation with Indigenous Peoples and supporting the fulfillment of the Truth and Reconciliations Calls to Action #92. Under 92 (ii) the corporate sector is called upon to “Ensure that Aboriginal people have equitable access to jobs, training and education opportunities in the corporate sector and that the Aboriginal communities gain long-term sustainable benefits from economic development projects”[1]. Chambers across the province are supporting businesses in determining their role in reconciliation and the specific actions they can take to support this call.

The Yahey Decision of 2021, and the resulting agreements signed between the province and the certain First Nations in B.C. Treaty 8 territory, means developments cannot proceed without the First Nations’ involvement and consent, as they will have a seat at the decision-making table when it comes to projects moving ahead in their traditional lands. While the landmark case is based in Northeastern British Columbia, the impact is pan-provincial and international: domestic and international industry players are watching, as are many of the other over 630 First Nations in Canada.

In March 2022, for example, TC Energy signed an equity option agreement with 16 Indigenous communities across the Coastal GasLink project corridor.

In another example, in September 2022, Enbridge Inc. signed a deal to sell a minority stake in seven pipelines in the Athabasca region of northern Alberta to a group of 23 First Nation and Metis communities for $1.12 billion.

Most currently, Cedar LNG became Canada’s first Indigenous majority-owned LNG facility to receive an Environmental Assessment Certificate from the provincial government. There are Indigenous co-ownership opportunities of mining projects that may come to fruition in the future in Southeast British Columbia.

Historic, game-changing opportunities are being presented, but First Nations in B.C. do not have the financial support available to their counterparts in Alberta, Saskatchewan, and Ontario, specifically the provision of loan guarantees for eligible projects.

1. Alberta Indigenous Opportunities Corporation (AIOC).
2. Saskatchewan Indigenous Investment Finance (SIIFC).
3. Ontario Financing Authority Aboriginal Loan Guarantee Program (ALGP).

A First Nation has access to financial instruments that other levels of government in Canada have at their disposal, through the First Nations Finance Authority (FNFA), once they become borrowing members. The steps to becoming a borrowing member, however, complete the process of the First Nations Financial Management Board (FMB) and the First Nations Tax Commission (FNTC) to give members and other stakeholders confidence that the Nation is well-run, transparent and accountable. The process requires significant time and financial resources to complete and there can be significant opportunity costs to the Nation. As of August 2022, there were 145 borrowing members, out of over 630 recognized First Nations governments or bands across Canada. In B.C., there were 57 borrowing members, out of more than 200 distinct First Nations.

The creation of a financing support vehicle that provides a financial mechanism, such as loan guarantees, to eligible Indigenous communities and organizations to support investment in the core economic sectors of British Columbia, will create opportunities in Indigenous communities and across the province, and will further demonstrate governments commitment to economic reconciliation and increasing Indigenous participation in the economy. [2]

THE CHAMBER RECOMMENDS

That the Provincial Government:

1. Establish a loan guarantee program, or other financial mechanisms, to facilitate Indigenous investments and ownership in major projects within the core economic sectors of British Columbia.