​Rising up: First Nations focus on relieving poverty through taking ownership of resources

Joe Dion, CEO of Frog Lake First Energy Resources, says First Nations need to take control of their own destiny. Image: Jason Franson/JWN

Canada’s First Nations have worked long and hard to have rights recognized by governments and industry. Those rights were recently reinforced by the United Nations’ Declaration On the Rights of Indigenous Peoples, which sets out global expectations for how governments should deal with indigenous communities. So First Nations aren’t about to let environmental groups get in the way of industrial projects that communities need in order to build schools, better housing and a healthier future.

“Environmentalists have hijacked the indigenous agenda,” Joe Dion, chief executive officer of Frog Lake Energy Resources, told an audience at the Indigenous Conference on Energy and Mining at this year’s Global Petroleum Show.

“Our rights are constitutionally entrenched in Canada and have allowed us to win all these court cases, but I’m afraid that we have been hijacked and we have basically lost control.”

In an interview with Oilweek following his presentation, Dion explained that the indigenous and environmental agendas are not the same, despite often being lumped together in a larger protest movement.

As constitutional coordinator for the National Indian Brotherhood in the early 1980s, Dion played a direct role in the entrenchment of indigenous rights in the Canadian Constitution under then–prime minister Pierre Trudeau. The political power that came out of that now holds a strong allure for other groups.

“We have this powerful leverage and the NGOs have used that to basically achieve their agenda,” Dion said.

“Some of these environmental groups just want to stop development at all costs. In that case, go lobby the Chinese. Go lobby the Russians. If you want to have an impact, go there because that’s where the big impacts are happening.”

First Nations and environmentalists share a concern for Earth’s land, water and air. They often stand on the same side of the fence on these issues, but the core of the indigenous agenda is raising its communities from poverty.

Recently, Chief Jim Boucher of the Fort McKay First Nation told an Assembly of First Nations gathering in Gatineau, Que., that environmentalists should be ignored because they are to blame for widespread poverty in Canada’s North.

In contrast, the community of Fort McKay in the heart of the oilsands has an unemployment rate of zero, an average annual income of $120,000 and financial holdings in excess of $2 billion. It’s the result of working with Canada’s oil and gas industry. That money has been invested into education, long-term care homes for seniors and other community infrastructure.

Boucher said that without this direct involvement in industrial projects, the Fort McKay First Nation would be living “in poverty right now.”

Dion takes a similar view. Frog Lake Energy Resources is an oil and gas exploration and production company that’s wholly owned by the people of the Frog Lake First Nation. The company is part of an indigenous expansion into equity ownership in natural resource development and infrastructure projects. This goes beyond just taking jobs or securing service contracts.

Fort McKay’s agreement last year with Suncor to buy a 34.3 per cent equity interest in the company’s East Tank Farm Development is another example.

Economics is the driver for this participation, but traditional indigenous values are part of the package as well.

“Of course, we’ll protect the environment,” Dion said. “Stopping development isn’t hard to do, but how are you going to eat? We need to speak up for the poverty that is out there in our communities. We need to address how we’re going to get our people out of poverty when the majority of wealth is being held by so few.

“Poverty outstrips all of the concerns about climate change and environment. If you focus too much on climate change, First Nations will be at a standstill and we won’t have any development. So climate change is important, but it’s not everything.”

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He points to a southern Alberta First Nation that recently struck a deal with an Australian coal mining company. For the community, it’s an opportunity to build capacity; however, being a coal project, environmental groups oppose the project.

“So here we have a situation,” Dion said, “where the Blackfoot folks told the environmentalists, ‘We don’t need you. We’ll protect the environment. We’ll represent the environmental issues ourselves.’”

Rent or own?

Today, Frog Lake Resources is a small producer, with production reaching 3,000 bbls/d. But its vision for 2020 is to “continuously create business opportunities and deliver long-term value for the benefit of the Frog Lake First Nation and its partners.”

Crossing the divide between resource extraction support and resource extraction lead is a big step for First Nations. But it’s one that Chris Insley, Member of the New Zealand Deep South (Antarctic) National Science Challenge Maori Advisory Panel, 37 Degrees South Limited, says indigenous people need to make.

The return speaker to this year’s Indigenous Conference on Energy and Mining extended the discussion to key lessons from New Zealand’s Maori economy, which is currently worth about $42 billion and is growing at a faster rate than the New Zealand economy. (This compares to C$30 billion “directly linked” to the contribution of indigenous peoples to the Canadian economy, $12 billion of which is directly attributable to indigenous businesses, according to Philip Jennings, associate deputy minister of natural resources.)

“We own half of the New Zealand fishing industry, 30 to 40 per cent of New Zealand’s farming industry, and in forestry we have 30 to 40 per cent ownership,” Insley told the audience during the Spotlight on Indigenous Leaders panel discussion. The Maori are also becoming more active in geothermal and hydro and are currently attempting to secure financing for a major solar project.

“So we are practically involved in the ownership of power stations,” Insley said. “My point is we are not passive. We are active players, where we take a lead rather than just bidding on contracts.”

Insley urged indigenous people to aspire to control and to have ownership of the industries associated with their lands. Ownership provides the strongest returns on investment. Control allows indigenous traditional values to guide these operations.

“Our community leaders take a long-term view,” he said. “There is some tension between the classic western short-term view—work, make money in two or three years and, if that doesn’t work, don’t do it. This is the difference in these discussions.”

Education is fundamental to realizing indigenous ownership. The Maori recognized that the lack of education was the biggest obstacle to project ownership, so it made an effort to provide high-quality government and leadership-development programs to its people in their own language.

“They’re being taught how to read a balance sheet. They’re being taught whether an investment is a good deal or a dumb deal. They’re being taught about strategic plans and how to measure the performance of an organization,” Insley said.

Those efforts are paralleled in schools. Maori children are encouraged by parents and community elders to attain the highest levels of education at the best universities around the world.

In Canada, the Suncor/Fort McKay tank farm deal and other ventures suggest that local industry is ready to extend ownership opportunities to indigenous groups. The challenge, however, is often financial capacity.

“I’ve always recognized indigenous equity ownership as being something that we would be open to,” Ian Anderson, president of Kinder Morgan Canada, said during the Building Stronger Connections panel discussion.

Anderson said that he had worked behind the scenes in support of First Nations equity investment in the Trans Mountain Pipeline expansion, which would greatly increase Alberta's oil production access to tidewater. Indigenous partnership, however, didn’t come to fruition.

“I’ve never ruled it out,” Anderson added. “At the core of it, though, is for that kind of ownership and meaningful investment in resource development, First Nations need capacity. So where does that capacity come from? And how do they build up capacity?”

In Fort McKay’s case, decades of work that started with “the humble sparks of jobs and opportunities and contracts” brought it to where it stands today.

Anderson also noted that there may be a role for government in helping to build indigenous capacity by extending loan guarantees or other financial vehicles.

“So I think there is a meeting of minds on indigenous ownership and, over time, we will see it,” Anderson said.

And when that time comes, indigenous groups and environmental groups may increasingly find themselves on opposite sides of the fence.

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