When power utility BC Hydro launched a procurement process earlier this year to seek new clean energy sources for the provincial grid, it included a specific requirement: projects had to be at least 25 percent owned by Indigenous peoples.
The procurement was BC Hydro’s first competitive tender in more than 15 years, and the company ended up receiving three times as much energy as it had hoped to achieve. The company plans to announce the winner by the end of the year.
BC Hydro’s electricity generation program and the company’s decision to mandate Indigenous share ownership requirements are just one in a series of milestones achieved this year towards increasing Indigenous economic participation in Canada.
Other major achievements in 2024 include a positive final investment decision by the proponent of Cedar LNG, a $4 billion liquefied natural gas terminal being constructed off the coast of British Columbia. The facility is majority owned by the Haisla Nation, making Cedar LNG Canada’s largest Indigenous-owned infrastructure project.
The year also saw the announcement of a $1 billion deal for TC Energy to sell a minority stake in its Western Canadian natural gas transmission network to a consortium of Indigenous communities. The deal has been stymied by what TC Energy called “deal structuring issues” and has yet to close, but it could be the largest Indigenous equity deal in Canadian history.
“It’s certainly been a good year and it’s given us, as Indigenous people, a lot of hope about the future, especially looking towards 2025,” said Charlene Gayle, former chief of Fort Nelson First Nation in British Columbia and chair of the Indigenous Major Projects Coalition.
“I truly hope that in 2025 we will see great progress.”
Historically, some of Canada’s largest infrastructure projects, from mines to pipelines to power generation facilities, have been built on Indigenous lands.
Companies are beginning to recognize that indigenous communities deserve to benefit from projects that take place on their lands, but in recent years these benefits have typically come in the form of construction jobs and procurement opportunities, and stop short of giving indigenous people full equity rights.
But things are starting to change.
Indigenous communities across Canada are increasingly interested in gaining equity in major projects and infrastructure as a way to generate revenue and economic opportunity for themselves.
Interest in equity ownership comes at a time when Canada is working toward reconciliation with Indigenous peoples, including recognizing their right to economic self-determination, and the companies themselves are seeing the benefits to be gained from such deals as securing the support and consent of Indigenous communities becomes increasingly essential to building and operating large-scale projects.
“(Equity ownership) is widely recognized as a new evolution in the relationship between Indigenous communities and operators operating on their traditional territories,” said Justin Boak, president of Athabasca Indigenous Investments, a partnership of 23 First Nations communities in northern Alberta that came together to buy an 11.57 per cent stake in seven pipelines operated by Enbridge in 2022.
“We’re still focused on respecting rights and providing access to procurement opportunities, jobs, employment and training. And that’s not going to go away now that we’re talking about more equity. But as Canada develops, Indigenous communities want to be partial owners in the future,” Bourque said.
According to law firm Fasken, which has been tracking announced Indigenous equity investments in Canadian energy and related infrastructure projects, the past two years have seen a dramatic increase in the number of deals concluded. The firm has reviewed 135 energy and related infrastructure projects that are partially or fully owned by Indigenous people over the past 15 years. Twenty-eight percent of these Indigenous equity investments occurred in the past two years alone.
Historically, one of the biggest barriers preventing Indigenous partners from pursuing equity ownership has been a lack of access to capital, said Amy Carruthers, regional leader of Vancouver-based Fasken’s global energy group. Canada’s Indian Act prohibits First Nations from mortgaging land, and Indigenous communities struggle to obtain competitive interest rates through mainstream capital markets.
Government-backed loan guarantees, such as those offered in Alberta since 2020 through a provincial corporation called the Alberta Indigenous Opportunities Corporation, have helped boost the number of deals in recent years.
“Access to capital is really the biggest challenge,” Carruthers said, adding that a new federal loan guarantee program announced earlier this year will likely lead to a surge in project announcements, but additional financing options will be needed for First Nations to take on larger project ownership positions than ever before.
“We need to find alternative sources of funding through private and other means to supplement what government programs are already doing,” she said.
The number of wind, solar and other clean energy projects across Canada with some level of Indigenous equity ownership has grown by about 30 per cent each year since 2020, said James Jenkins, executive director of the non-profit group Indigenous Clean Energy.
There are currently about 600 mid- to large-scale renewable energy projects with Indigenous participation in investment in Canada, and that number is likely to grow significantly as the clean energy transition accelerates, which is why it’s important to maintain the recent momentum, he said.
“There’s still a lot of work to be done if we want the same level of participation in this time of growing energy demand,” Jenkins said.
“We need to do all we can to continue to build capacity and leadership development in Indigenous communities and businesses so they’re prepared for the wave of large-scale projects that are coming.”
This report by The Canadian Press was first published Sept. 25, 2024.
