Home And Native Land – Aboriginal Opposition To Enbridge’s Proposed Northern Gateway Pipeline Isn’t Anti-Business. It’s A Mature Approach To Their Emerging Role As Serious Economic Players In Canada
By Cooper Langford, National Post
April 10, 2012 4:02 AM
In many respects, the city of Kitimat is an iconic Canadian community. Situated in a wide, flat valley at the head of the Douglas Channel in northwestern B.C., it has, for the past 60 years, been home to one of the world’s great hydroelectric and aluminum smelting projects. A technological marvel when it was built by the Aluminum Company of Canada during the industrial boom that followed the Second World War, the project brought the modern world to a resource-rich wilderness and became the foundation of a prosperous frontier city.
More recent history, however, has been less kind to the Kitimat region. Technological advances mean the smelter, now owned by global mining giant Rio Tinto, no longer employs as many people as it once did. The businesses — methane, ammonia and paper — that followed it into the deep reaches of the province are no more. Kitimat is a community looking to re-stake its claim on the future. And there is a new prospect on the horizon: Calgary-based Enbridge has identified the community as the terminus for its proposed Northern Gateway pipeline project to ship bitumen from Alberta’s oil sands to the Pacific coast and, potentially, new markets in Asia.
Northern Gateway — if it goes ahead — will be a groundbreaking project in its own right, a 21st century statement of Canada’s role as a global energy supplier. But getting to that point is far from certain. Whatever technological and business innovation it may represent, the pipeline has become the centre of an iconic debate. When the federal panel reviewing Northern Gateway opened its hearings this past January in Kitimat Village, home to the local Haisla First Nation, among the first voices it heard were from local hereditary chiefs who, one by one, rose to speak in opposition to the project. “If there is a spill, all that we enjoy from the land and the sea will be destroyed,” said Chief Clifford Smith, echoing a widely held sentiment. “Let us put our strength together and stand as one, and say ‘no’ to Enbridge.”
The chiefs were not alone in their views. Enbridge is facing similar opposition from First Nation communities all along the proposed 1,170-kilometre pipeline route. And tempting though it may be to view the protests and threats of lawsuit through the narrative of aboriginal opposition to resource projects, that would be wrong. That lens no longer applies to the investment and economic development processes across most of Canada. Countrywide, aboriginal communities have been taking ever-more substantial leadership roles in business development and maturing as serious economic players. Investment and partnership have been cornerstones of progress.
For proof, look no further than a few kilometres further down the Douglas Channel where the Haisla First Nation is actively involved in two other energy projects on their home territory. The first — and largest — is a liquefied natural gas (LNG) project led by Apache Canada Ltd., a subsidiary of the Houston-based global energy powerhouse Apache Corp. It will see the construction of a liquefaction plant, storage facility and marine on-loading facility that will ship some five million metric tonnes of LNG annually on startup, which is expected in 2015. The band has already benefited to the tune of $50 million by selling their option for an equity stake in the project. Further employment and business provisions in the agreement between the Haisla and Apache Canada, as well as lease payments for use of traditional lands, will ensure benefits accrue for many years to come.
Even more intriguing is the Haisla’s second project: a smaller LNG project that it is building in a 50-50 joint venture with Houston-based LNG Partners. Working under the name BC LNG Partnership, the joint venture received an export licence from the National Energy Board in February and shipments should begin in the not-too-distant future. As myth-busting stories about aboriginal attitudes toward business go, the Haisla’s participation in LNG developments in northwestern B.C. is pretty good. After all, the demonstrated investment and cooperation hardly smack of anti-business attitudes. The stories might even generate more widespread coverage but for a simple fact: they are not especially unique.
In southwestern British Columbia, for example, the economic development arm of the Osoyoos Indian Band has been building a line of recreational businesses based on its traditional territory in one of Canada’s most unique desert regions. Among its holdings are a golf course, a resort and spa and an international award-winning winery.
In the Far North, the Yellowknives Dene have created a portfolio of companies around aviation, contract mining services, logistics and environmental services, focused in part on the territory’s diamond mining industry. Meanwhile, in Labrador, the Inuit-owned Nunatsiavut Group of companies is active in transportation with a 51% stake in Air Labrador Ltd. and a wholly owned shipping company, NGC Nunatsiavut Marine Transport, as well as other sectors such as construction and logistics.
These are but a handful of examples of business investments now being undertaken by Canada’s aboriginal communities, many of them executed under one of the more than 250 community-owned economic development corporations in operation today across the country. More significantly, they represent only a component of a rapidly growing aboriginal business sector that TD Economics valued at $9 billion by revenue in 2011. And while these impressive numbers don’t erase the fact that poverty and deplorable conditions continue to stalk many aboriginal communities, they put lie to prejudicial beliefs that economic independence is out of reach for those same communities or that they are incapable of full participation in Canadian economic life. As Clint Davis, CEO of the Canadian Council for Aboriginal Business (CCAB), puts it, “Economics and entrepreneurialism is innately human. When you look at participation in business, aboriginal people are no different than anyone else around the world.”
The question is, why are we seeing progress now? Several forces have been at work. Chief among them has been the commodities boom of the past decade and, more recently, the exceptional growth in the energy sector, which has brought large-scale investment to more remote areas of the country. Investment booms, however, are not socio-economic drivers in and of themselves, but catalysts that bring other factors into play. In the case of the rapid growth in aboriginal economic activity, one of those factors has been the growing recognition of aboriginal rights, either through land claims and other settlements or legal recognition of those rights in court rulings. Their absence has been a significant barrier in the past.
The original proposal for a Mackenzie Valley pipeline offers a case in point. Thomas Berger, appointed by the federal government to lead public hearings into the project, shocked the nation when he issued his report in 1977, supporting aboriginal opposition to the project and calling for a moratorium on pipeline development for 10 years to allow for the settlement of aboriginal land claims.
Whether the recommendation was as influential on pipeline development as popular retellings of the story hold is a matter for debate. (Many argue that changing economics killed the proposal and it is rarely mentioned that Enbridge opened an 870-kilometre pipeline in 1985 that linked the oil field at Norman Wells to Zama, Alta.) But it most certainly put land-claim settlements on the front burner. The Inuvialuit of the Beaufort Delta settled their claim in 1984, with many more Dene claims being finalized in the Mackenzie Valley in the years that followed.
The impact of these settlements on the investment climate was profound. At the end of the 1990s, a new proposal for a Mackenzie Valley natural pipeline began to circulate. Once more, the majority of community leaders — many of whom had cut their political teeth in the days of the Berger Inquiry — were back at the table with much to say. This time, however, they had not gathered to protest. They were looking to become one-third equity partners in the project through an organization called the Aboriginal Pipeline Group.
It will likely be years before a Mackenzie pipeline project finally gets off the ground, but the transformation in the attitudes of aboriginal governments it represents is not diminished by the project’s ultimate timetable. Neither are the shifts in attitude on the part of industry that make such proposals and negotiations possible. In many instances, partnerships with local aboriginal communities have moved beyond mere notions of corporate social responsibility or requirements under rights agreements and grown into mature business-to-business relationships.
Such is the case with the Fort McMurray, Alta.-based Athabasca First Nation Business Group. It got its start in 1994 with little more than a pickup truck, a small crew and a contract to collect garbage at the Syncrude site and take it to the landfill. Today, it has a portfolio of companies in businesses focused on the oil sands sector that range from waste management and ultra-sonic industrial cleaning to recycling off-road tires and camp services. Together, the companies generate some $230 million in annual revenue and employ more than 1,400 people.
Social and economic agreements with developers in the region have no doubt played a major role in seeding the business group’s initial opportunities. But according to CEO Garry Flett, the organization’s growth is based squarely on sound business practices and genuine industry partnerships built on results. “Initially, the agreements get you in the door,” Flett says. “But we don’t rely on agreements anymore. Now that we’re in the door, we rely on being the best at what we do. If you are not the best at what you do, there’s always someone else who wants to do it.”
Such perspectives are not limited to established economic development organizations operating in areas undergoing large-scale development. Entrepreneurship is also rising across the country as a generation of young, better educated aboriginal business owners comes into its own. According to TD Economics, this sector — engaged in a wide variety of business sectors and services — has seen its overall revenue grow to more than $970 million from less than $600 million during the past five years. It further projects earnings to increase to more than $1.2 billion by 2016, suggesting that the lessons learned at higher levels are filtering down to the individual level.
But even though these are encouraging trends, they also point to issues that must still be addressed. For starters, the economic opportunities enjoyed by the growing aboriginal business community are not evenly spread across the country. The resource investment driving many of the gains over the past decade is highly regionalized, as are the benefits that flow from it. Similarly, not all aboriginal governments are as experienced or as stable as they need to be to develop the kind of policies that will facilitate wider participation in local or regional economies. And the capacity of aboriginal communities overall still lags the rest of the country.
These issues, however, are not insurmountable, says CCAB’s Davis. Education, obviously, is a critical issue that must be addressed, especially in more remote communities where standards lag national averages at the critical primary and secondary levels. Stronger governance at the community and regional levels also needs to be developed and maintained so that local leaderships are better prepared to set economic policy and attract investment. And communities need to look at themselves and understand the competitive opportunities they bring to the table and their own goals for the future. “It’s not enough to say you are open for business,” Davis says. “Communities need to know what kind of industries they want to get into, what kind of partners they want and what they want to get out of those partnerships. They have to figure out what gives them a competitive advantage. ” But if past performance is any indicator of future potential, the momentum is moving in the right direction. It may be enough to shift the attitudes of Haisla First Nation when it comes to their position on Enbridge’s proposed Northern Gateway pipeline. Their opposition is based on another type of business decision: risk management. Their fear is that the environmental consequences of an oil spill are far worse than those of natural gas spill. That’s hardly an anti-development position. It’s one based on determining the type of business they want to be in. And that in itself speaks to the growing sophistication of aboriginal-owned business in Canada.