‘A true seat at the table’: Why an Indigenous group wants an ownership stake in the TMX pipeline

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David Jimmie didn’t set out to buy a pipeline.

The chief of the Squiala First Nation in British Columbia, Mr. Jimmie spent much of the past decade involved in court challenges to the Trans Mountain expansion project (TMX), raising concerns about how the project could affect land, water and plant-gathering sites used by community members.

But when those legal challenges were exhausted and the project approved, the best option he saw to ensure Squiala had the oversight and input he’d sought was for the community to become an owner. In 2020, he became chair of Western Indigenous Pipeline Group, an Indigenous-led group formed to pursue an equity stake in TMX. In 2021, WIPG teamed with Pembina Pipeline Corp. to form Chinook Pathways, a 50-50 partnership eyeing an investment in the project.

Squiala, based near Chilliwack, is a member of the Sto:lo Nation, a group representing Sto:lo communities that have traditional territory along the Fraser River Watershed and of which Mr. Jimmie is president, representing nine communities. There are 129 Indigenous communities along the pipeline route in B.C. and Alberta. WIPG has concluded preliminary agreements with 36 of them, Mr. Jimmie said.

“It’s stepping back and thinking about community impacts as a whole,” he said in an interview in the Squiala band office in Chilliwack.

“And if you can’t have them addressed through a regulatory process, then what other alternatives do you have? And that’s ownership. It’s not that I set out to pursue buying a pipeline. It’s that I think there’s opportunity – from an environmental stewardship perspective and how it’s operated. And, obviously, an opportunity for generating revenue for communities. So it was tough, it was not an easy process.”

The same could be said for TMX itself. First proposed in 2012 by then-proponent Houston-based Kinder Morgan Inc., TMX will nearly triple the capacity of an existing pipeline that moves oil from Alberta to the West Coast. After Kinder Morgan threatened to walk away from the project over court challenges and environmental opposition, the federal government bought the pipeline and expansion project in 2018 for $4.5-billion, saying it was in the national interest.

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Since then, costs have spiralled, hitting $30.9-billion this past spring, up from $7.4-billion in 2017. Now, as the project nears completion, the federal government is in talks to divest the project to Indigenous owners.

That process dates back to 2019, when Prime Minister Justin Trudeau said Ottawa wanted to ensure that Indigenous groups would share in economic benefits. Since then, several groups have emerged as potential bidders, including WIPG and Calgary-based Project Reconciliation.

The complex divestment process got a nudge in August, when Deputy Prime Minister Chrystia Freeland wrote to Indigenous groups setting out key principles of how Canada plans to sell a stake in TMX, including that Ottawa would support Indigenous communities with access to capital.

Taking part in that process would not prevent Indigenous communities or Indigenous-led proponents from participating in a commercial process to acquire additional equity, Ms. Freeland said in the letter, a copy of which was obtained by The Globe and Mail.

That means a two-phase process is under way. Phase one involves the federal government negotiating with individual Indigenous communities. Meetings for that phase were held in Vancouver in September.

Phase two could involve groups such as WIPG and Project Reconciliation. It’s not clear how long either phase will take, although Mr. Jimmie hopes agreements could be finalized before the end of 2024.

“There’s a number of moving parts – we still don’t have access to the data room,” he said, adding Pembina will be key to any prospective agreement.

“That’s also the benefit of having a partner like Pembina, because their due diligence process and everything they have to go through in order to satisfy their shareholders and investors – the valuation has to make sense from an investment standpoint.”

On an earnings call earlier this month, Pembina chief executive officer Scott Burrows said the company needs more certainty over timing, regulations and costs before deciding whether to make an offer for an equity stake.

Pipeline revenues could help address long-standing health, housing and infrastructure gaps and allow communities to invest in more climate-friendly projects down the road, Mr. Jimmie said, adding that WIPG’s conversations with communities focus on the long term, including building capacity to take on ownership and management roles in other projects.

“If you want to talk about true economic reconciliation, this country from contact has been extracting resources from traditional territories. And we’ve never had an opportunity to have an active role, a real role. And I often say to communities when I am presenting about WIPG and Chinook Pathways – it’s a true seat at the table.”

Speaking before Tuesday’s fall economic statement, Mr. Jimmie said he supported the idea of a federal Indigenous Loan Guarantee Program. Many small communities don’t have the funds to invest in major projects, including oil and gas development.

“Communities should not be limited on where they can invest while the government will continue to benefit from oil and gas projects in the form of taxes, royalties and fees,” Mr. Jimmie said, adding that such a program would be a step toward economic reconciliation.

The federal government on Tuesday said it would work on a program, with details to be announced in the 2024 budget. Such loan guarantees would allow Indigenous people to benefit from what is expected to be billions of dollars’ worth of investment in their communities.

In a statement, the First Nations Major Projects Coalition said the need for a loan program is “imminent” and it hopes the plan would be sector-agnostic, a reference to recent reports that the program could exclude oil and gas projects.