Pathways to Prosperity: Exploring Indigenous Participation in Major Energy Projects

March 05, 2024

Written By Martin Ignasiak, Jason Kenney and Lisa Rodriguez

On February 15, 2024, Bennett Jones' Calgary office welcomed nearly 80 project stakeholders and industry leaders—with hundreds more tuning in online—to talk about Synergy in Energy: Building Effective Indigenous Partnerships.

Moderated by Martin Ignasiak KC, Head of Bennett Jones' Energy Regulatory practice, the panel touched on trends, best practices and common challenges in energy-related transactions involving Indigenous stakeholders. Panel guests included:

• the Honourable Jason Kenney, former Premier of Alberta;
• Chana Martineau, CEO of Alberta Indigenous Opportunities Corporation (AIOC);
• Billy Morin, Managing Director of Axxcelus Capital Advisory; and
• Tom Schwartz, SVP of Liquids Pipelines Strategic Projects for Enbridge.

Fostering and Financing Indigenous Empowerment

Alberta Indigenous Opportunities Corporation (AIOC), established by the Kenney government at the end of 2019, offers financing for First Nations groups that want to own and participate in major resource development, agriculture, transportation and telecommunications projects. As Mr. Kenney noted, one of the biggest barriers to Indigenous participation and ownership in major projects is access to credit. AIOC helps break those barriers, offering loan guarantees that can be leveraged so that there are real returns to Indigenous communities right away. Projects are only approved for AIOC investment if they are commercially viable, but AIOC offers First Nations stakeholders an opportunity to connect with seasoned advisors to aid inexperienced proponents in complex financial and legal transactions.

It is tough to argue against the impact of this first-of-its-kind organization: AIOC has so far invested over $680 million into 7 major projects co-owned by 42 different First Nations groups. In November of 2023, AIOC announced a loan guarantee capacity increase to $3 billion, a further testament to its track record of fostering and financing Indigenous empowerment.

Strengthening Communities Through Successful Partnerships

One of AIOC's successes is the Cascade Power Project, which is a collaboration between industry stakeholders and a consortium of six First Nations groups. Billy Morin—elected at the time as the youngest Chief in Enoch Cree Nation’s modern history—co-led this AIOC project, which involved a $93 million transaction to secure equity in the project for Indigenous stakeholders.

Chief Morin saw firsthand the effects of AIOC, noting that money invested in the Cascade Power Project was able to be leveraged immediately into community projects such as an on-reserve surgical centre and a hockey arena. He said that the ability to make those investments are especially impactful for rural communities that may not have access to the same opportunities as First Nations groups that are nearby major urban centers.

Building Trust with Indigenous Stakeholders

When asked what companies should do to foster partnerships with First Nations communities, Chief Morin said that trust is necessary. He emphasized that Indigenous groups are interested in long-term commitments to develop and care for their land, so there is potential for deep, meaningful relationships with companies wishing to invest: "You can get to the business part really, really quick if you just build that trust and put the time and effort in… Don't walk in with your term sheet… take the time and you might just find that… you may have a new friend for years to come."

Tom Schwartz has experience building that sort of trust, having been involved in a several significant projects where Enbridge has worked closely with Indigenous partners, including a landmark, $1.12 billion transaction in 2022 involving 23 Indigenous nations—the largest Indigenous energy partnership in North America to date. Through the process, Mr. Schwartz learned that respect and humility were important for building Indigenous partnerships: Communication is key. He remarked that Indigenous leaders care deeply about their communities, water and land. In his experience, First Nations groups bring a high level of environmental stewardship to partnership arrangements between industry and Indigenous stakeholders.

Championing Economic Reconciliation

Chana Martineau, CEO of AIOC, emphasized the importance of Indigenous economic reconciliation: "There is no political independence and sovereignty without economic independence and sovereignty… This is about catching up Indigenous people from being held back in the economy we have today." She shared her views that projects focused on economic reconciliation need to have a singular focus as opposed to grouping them together with environmental objectives that may distract from the goal of economic reconciliation.

Mr. Kenney said he is extremely proud of what AIOC has accomplished and hopes to see other jurisdictions follow suit, including a federal version of AIOC. He says that momentum is building, noting that big players in industry—banking and government—have been asking about AIOC's experiences and successes. Other jurisdictions are taking notice of AIOC’s ability to effectively champion Indigenous economic reconciliation: At the end of February, the British Columbia government launched a new $1 billion Indigenous loan guarantee program. There is much to look forward to as Canada explores what a nation-wide Indigenous loan guarantee program may look like in next year’s federal budget.

Chief Morin remarked that an important effect from AIOC projects is seeing Indigenous leaders and advisors in important positions: "Now the people in these communities can actually see themselves in those advisor seats on Bay Street. It's real. That's the cascading effect, no pun intended."

In the spirit of creating pathways to prosperity for industry and First Nations groups alike, Bennett Jones and AIOC stand at the forefront of supporting Indigenous participation in major projects. Our Energy Regulatory and Aboriginal Law teams help project proponents and Indigenous stakeholders navigate the complexities of regulatory frameworks, provide strategic advice on the formation of effective partnerships and assist with the process of securing approvals for major projects. To discuss how we can support your objectives regarding meaningful economic reconciliation and sustainable development, please contact one of the authors.

Authors