Connect with us
[the_ad id="89560"]

Energy

First Nations Buy Into Pipelines

Published

9 minute read

From the Frontier Centre for Public Policy

By Brian Zinchuk

“Meaningful Indigenous participation in our resource economy is maturing. At first, First Nations used to ask for compensation, the jobs, and then for the contracts that created those jobs, Now they seek purchase equity in the project itself. Soon they will create the project and seek others to invest in it. Then they will have real economic power.”

It’s taken years to get here, but there’s a new trend in Canada’s pipeline industry, and it couldn’t come soon enough. That’s because the path we’ve been on until now has been one to ruin.

On July 30, TC Energy announced it was in the process of selling 5.34 per cent of its Nova Gas Transmission Ltd. (NGTL) System and the Foothills Pipeline assets for a gross purchase price of $1 billion. “The Agreement is backed by the Alberta Indigenous Opportunities Corporation (AIOC) and was negotiated by a consortium committee (Consortium) representing specific Indigenous Communities (Communities) across Alberta, British Columbia and Saskatchewan. This results in an implied enterprise value of approximately $1.65 billion, inclusive of the proportionate share of the Partnership Assets’ collective debt,” TC Energy said.

This comes a few months after its March 14 announcement to sell “all outstanding shares in Prince Rupert Gas Transmission Holdings Ltd. and the limited partnership interests in Prince Rupert Gas Transmission Limited Partnership (collectively, PRGT). PRGT is a wholly owned subsidiary of TC Energy and the developer of a natural gas pipeline project in British Columbia and potential delivery corridor that would further unlock Canada as a secure, affordable and sustainable source of LNG.”

The Nova system sale is significant. It’s the principal natural gas gathering system throughout Alberta and a bit into B.C. In addition to supplying Alberta with its gas needs, Nova, in turn, feeds the TC Energy Mainline. It also supplies Saskatchewan via Many Islands Pipe Lines and TransGas, both subsidiaries of SaskEnergy. And since Saskatchewan’s domestic gas production keeps falling, we now rely heavily on Alberta gas to keep our furnaces lit and our new gas fired power plants turning, keeping the lights on. When you look at the Nova map, it’s basically the map of Alberta.

Some of the most significant difficulties in getting major pipeline projects built in this country over the last 16 years has been Indigenous opposition. One of the first stories I wrote about with Pipeline News during the summer of 2008 was a First Nations protest on the Enbridge right of way at Kerrobert, complete with a teepee. That was for the Alberta Clipper project, but it was relatively quickly resolved.

Then there was Enbridge’s Northern Gateway project, which was approved by the Conservative federal government but halted by the courts because of insufficient Indigenous consultation. It was ultimately killed very early into the Trudeau-led Liberal administration, when he said, “The Great Bear Rainforest was no place for a pipeline, a crude pipeline.”

Northern Gateway would have terminated at Kitimat. Yet, curiously enough, that same forest had to be crossed to built the TC Energy Coastal GasLink project. It went grossly overbudget in no small part due to delays and resistance in every manner possible from the Wet’suweten in northern B.C. As Canadian Press reported on Dec. 11, 2023, “By the time the pipeline was finished, its estimated construction cost had ballooned from $6.6 billion to $14.5 billion.”

And then there was Trans Mountain Expansion. It had opposition from the BC government, City of Burnaby, and everyone who could apply a Sharpie marker to a Bristol board. But Indigenous opposition was a major factor. As Pipeline Online reported via the Canadian Press, “The project’s $34-billion price tag has ballooned from a 2017 estimate of $7.4 billion, with Trans Mountain Corp. blaming the increase on “extraordinary” factors including evolving compliance requirements, Indigenous accommodations, stakeholder engagement, extreme weather and the COVID-19 pandemic.”

By this spring, the number was $34 billion, and I anticipate its final cost will be higher still.

Maturing

There’s been a big change in recent years, not just in pipelines, but in other energy industries like wind and solar. That change had gone from consultation to jobs to equity investment.

The word used almost always is “reconciliation.” That can be a loaded word in many ways, Some feel it will heal wounds, and right past wrongs, or at least try to. Others would say it’s a form of extortion. And some take issue with racial overtones. But here’s something I heard this week that makes a lot of sense:

“Meaningful Indigenous participation in our resource economy is maturing. At first, First Nations used to ask for compensation, the jobs, and then for the contracts that created those jobs, Now they seek purchase equity in the project itself. Soon they will create the project and seek others to invest in it. Then they will have real economic power.”

That’s what Steve Halabura, professional geologist, told me. And he would know, since he’s been working with First Nations on this economic development front.

And you see that in the timeline I laid out. The 2008 protests were very much about compensation and jobs. Trans Mountain Expansion saw significant First Nations’ owned and operated firms awarded contracts. And now, they’re buying equity positions.

You know what? If First Nations bands, and people, do indeed become owners in these resource companies and infrastructure, if it helps pay for housing and water treatment plants, if it means meaningful work and paycheques, are they likely to fight the next project tooth and nail? Or will they want to be a part of it?

And think of it this way – if we could have gotten to this point ten years ago, maybe these projects might have gone much more smoothly. Maybe their final costs wouldn’t have been double, or quadruple, the original budget. When you think of it in that perspective – if a billion dollar equity stake meant Coastal GasLink could have cost $5 billion less, would it have been worth it to bring First Nations in as equity partners?

Some will say that’s extortion. Others would say it’s justice, or reconciliation. But maybe, just maybe, this is how we move forward, and everyone in the end wins. And maybe then Canada can, once again, build great things.

Brian Zinchuk is editor and owner of Pipeline Online and occasional contributor to the Frontier Centre for Public Policy. He can be reached at [email protected].

Energy

Unceded is uncertain

Published on

Tsawwassen Speaker Squiqel Tony Jacobs arrives for a legislative sitting. THE CANADIAN PRESS/Darryl Dyck

From Resource Works

Cowichan case underscores case for fast-tracking treaties

If there are any doubts over the question of which route is best for settling aboriginal title and reconciliation – the courts or treaty negotiations – a new economic snapshot on the Tsawwassen First Nation should put the question to rest.

Thanks to a modern day treaty, implemented in 2009, the Tsawwassen have leveraged land, cash and self-governance to parlay millions into hundreds of millions a year, according to a new report by Deloitte on behalf of the BC Treaty Commission.

With just 532 citizens, the Tsawwassen First Nation now provides $485 million in annual employment and 11,000 permanent retail and warehouse jobs, the report states.

Deloitte estimates modern treaties will provide $1 billion to $2 billion in economic benefits over the next decade.

“What happens, when you transfer millions to First Nations, it turns into billions, and it turns into billions for everyone,” Sashia Leung, director of international relations and communication for the BC Treaty Commission, said at the Indigenous Partnership Success Showcase on November 13.

“Tsawwassen alone, after 16 years of implementing their modern treaty, are one of the biggest employers in the region.”

BC Treaty Commission’s Sashia Leung speaks at the Indigenous Partnerships Success Showcase 2025.
BC Treaty Commission’s Sashia Leung speaks at the Indigenous Partnerships Success Showcase 2025.

Nisga’a success highlights economic potential

The Nisga’a is another good case study. The Nisga’a were the first indigenous group in B.C. to sign a modern treaty.

Having land and self-governance powers gave the Nisga’a the base for economic development, which now includes a $22 billion LNG and natural gas pipeline project – Ksi Lisims LNG and the Prince Rupert Gas Transmission line.

“This is what reconciliation looks like: a modern Treaty Nation once on the sidelines of our economy, now leading a project that will help write the next chapter of a stronger, more resilient Canada,” Nisga’a Nation president Eva Clayton noted last year, when the project received regulatory approval.

While the modern treaty making process has moved at what seems a glacial pace since it was established in the mid-1990s, there are some signs of gathering momentum.

This year alone, three First Nations signed final treaty settlement agreements: Kitselas, Kitsumkalum and K’omoks.

“That’s the first time that we’ve ever seen, in the treaty negotiation process, that three treaties have been initialed in one year and then ratified by their communities,” Treaty Commissioner Celeste Haldane told me.

Courts versus negotiation

When it comes to settling the question of who owns the land in B.C. — the Crown or First Nations — there is no one-size-fits-all pathway.

Some First Nations have chosen the courts. To date, only one has succeeded in gaining legal recognition of aboriginal title through the courts — the Tsilhqot’in.

The recent Cowichan decision, in which a lower court recognized aboriginal title to a parcel of land in Richmond, is by no means a final one.

That decision opened a can of worms that now has private land owners worried that their properties could fall under aboriginal title. The court ruling is being appealed and will almost certainly end up having to go to the Supreme Court.

This issue could, and should, be resolved through treaty negotiations, not the courts.

The Cowichan, after all, are in the Hul’qumi’num treaty group, which is at stage 5 of a six-stage process in the BC Treaty process. So why are they still resorting to the courts to settle title issues?

The Cowichan title case is the very sort of legal dispute that the B.C. and federal governments were trying to avoid when it set up the BC Treaty process in the mid-1990s.

Accelerating the process

Unfortunately, modern treaty making has been agonizingly slow.

To date, there are only seven modern implemented treaties to show for three decades of works — eight if you count the Nisga’a treaty, which predated the BC Treaty process.

Modern treaty nations include the Nisga’a, Tsawwassen, Tla’amin and five tribal groups in the Maa-nulth confederation on Vancouver Island.

It takes an average of 10 years to negotiate a final treaty settlement. Getting a court ruling on aboriginal title can take just as long and really only settles one question: Who owns the land?

The B.C. government has been trying to address rights and title through other avenues, including incremental agreements and a tripartite reconciliation process within the BC Treaty process.

It was this latter tripartite process that led to the Haida agreement, which recognized Haida title over Haida Gwaii earlier this year.

These shortcuts chip away at issues of aboriginal rights and title, self-governance, resource ownership and taxation and revenue generation.

Modern treaties are more comprehensive, settling everything from who owns the land and who gets the tax revenue from it, to how much salmon a nation is entitled to annually.

Once modern treaties are in place, it gives First Nations a base from which to build their own economies.

The Tsawwassen First Nation is one of the more notable case studies for the economic and social benefits that accrue, not just to the nation, but to the local economy in general.

The Tsawwassen have used the cash, land and taxation powers granted to them under treaty to create thousands of new jobs. This has been done through the development of industrial, commercial and residential lands.

This includes the development of Tsawwassen Mills and Tsawwassen Commons, an Amazon warehouse, a container inspection centre, and a new sewer treatment plant in support of a major residential development.

“They have provided over 5,000 lease homes for Delta, for Vancouver,” Leung noted. “They have a vision to continue to build that out to 10,000 to 12,000.”

Removing barriers to agreement

For First Nations, some of the reticence in negotiating a treaty in the past was the cost and the loss of tax exemptions. But those sticking points have been removed in recent years.

First Nations in treaty negotiations were originally required to borrow money from the federal government to participate, and then that loan amount was deducted from whatever final cash settlement was agreed to.

That requirement was eliminated in 2019, and there has been loan forgiveness to those nations that concluded treaties.

Another sticking point was the loss of tax exemptions. Under Section 87 of Indian Act, sales and property taxes do not apply on reserve lands.

But under modern treaties, the Indian Act ceases to apply, and reserve lands are transferred to title lands. This meant giving up tax exemptions to get treaty settlements.

That too has been amended, and carve-outs are now allowed in which the tax exemptions can continue on those reserve lands that get transferred to title lands.

“Now, it’s up to the First Nation to determine when and if they want to phase out Section 87 protections,” Haldane said.

Haldane said she believes these recent changes may account for the recent progress it has seen at the negotiation table.

“That’s why you’re seeing K’omoks, Kitselas, Kitsumkalum – three treaties being ratified in one year,” she said. “It’s unprecedented.”

The Mark Carney government has been on a fast-tracking kick lately. But we want to avoid the kind of uncertainty that the Cowichan case raises, and if the Carney government is looking for more things to fast-track that would benefit First Nations and the Canadian economy, perhaps treaty making should be one of them.

Resource Works News

Continue Reading

Alberta

This new Canada–Alberta pipeline agreement will cost you more than you think

Published on

CAE Logo
By Natalia Bankert

Canada and Alberta’s new net-zero energy deal is being promoted as progress, but it also brings rising costs. In this video, I break down the increase to Alberta’s industrial carbon price, how those costs can raise fuel, heating, and grocery prices, and why taxpayer-funded carbon-capture projects and potential pipeline delays could add even more. Here’s what this agreement could mean for Canadians.

Watch Nataliya Bankert’s latest video.

Continue Reading

Trending

X