Justin Bourque, president of Athabasca Indigenous Investments, the umbrella group for the 23 communities that now own a minority stake in seven Enbridge pipelines.Greg Halinda/Canadian Energy Centre
A recent deal between 23 First Nation and Métis communities and Enbridge Inc. ENB-T featured a supporting role by Alberta Indigenous Opportunities Corp., or AIOC, a Crown corporation set up in 2019 to help Indigenous groups invest in major resource projects.
It came in the form of a $250-million equity loan guarantee and helped clinch the transaction, said Justin Bourque, a Métis leader who was at the negotiating table for what Enbridge called Project Rocket.
“I think it was crucial in getting us to the right table,” said Mr. Bourque, who is president of Athabasca Indigenous Investments, the umbrella group for the 23 communities that now own an 11.57-per-cent interest in seven Enbridge pipelines.
The provincial backing helped Athabasca Indigenous Investments line up the rest of the money required to close the $1.12-billion transaction, said Mr. Bourque, who is also chief executive of the Willow Lake Métis Nation, one of the communities in the group.
“It was more than just a loan guarantee. It was more than just a backstop by the government. We, as an Indigenous entity, had to go out and raise a significant amount of capital. And we were able to do that, through our work and our negotiations with Enbridge, our partner.”
For Indigenous communities, an equity stake in a resource or other major project can provide long-term economic benefits. But borrowing money to finance such investments can be difficult, because of regulatory barriers – under the Indian Act, for example, reserve lands can’t be used as collateral – and other factors, including lack of experience in financial markets.
Loan guarantee programs such as the AIOC can help bridge that access to capital gap, but currently, only a few jurisdictions offer such a model. (Alberta launched the AIOC in 2019, Saskatchewan announced the Saskatchewan Indigenous Investment Finance Corp. this year, and Ontario’s Aboriginal Loan Guarantee program has operated since 2009.)
Some would like to see that change.
“We’d love to see B.C. and BC Hydro make these kinds of things [loan guarantees] available to First Nations in B.C.,” said Judith Sayers, president of the Nuu-chah-nulth Tribal Council and a key player in developing the China Creek hydroelectric project, a run-of-river facility that began operating in 2005.
“I think they [BC Hydro] cuts themselves off from a lot of opportunities with First Nations by having that policy in place,” she added.
The province does provide financial support for Indigenous energy projects, Ms. Sayers acknowledged, but those projects tend to be small and community-based.
Asked if British Columbia was considering an Indigenous loan program, the Ministry of Finance said in an e-mailed statement that Indigenous communities are key partners in major public- and private-sector projects throughout the province and that B.C. approaches Indigenous financing needs on a case-by-case basis.
The province also cited the Indigenous Clean Energy Opportunities process, in which the government and First Nations groups are looking at ways to ensure First Nations benefit from current and future clean energy development projects.
The province also said in the statement that if an Indigenous loan guarantee is needed, it should be a national program led by the federal government and the Canada Infrastructure Bank.
The federal Liberal government created the Canada Infrastructure Bank in 2017. It has a target to invest $1-billion in Indigenous infrastructure projects.
Asked by The Globe and Mail if it was considering an Indigenous loan guarantee program, the federal government did not answer the question directly but listed several ways Ottawa is supporting Indigenous equity stakes in major projects.
Those include the First Nations Finance Authority, an Indigenous lending agency that in 2020 provided a $250-million loan to the Mi’kmaq First Nations Coalition as part of a landmark $1-billion deal in which the group acquired a 50-per-cent interest in Clearwater Seafoods, Crown-Indigenous Relations and Northern Affairs Canada spokesperson Jennifer Cooper said in an e-mail.
The federal government also supports several programs for Indigenous entrepreneurs, including the $150-million Indigenous Growth Fund, and in this year’s budget, it directed $103.4-million over five years to develop a national benefit-sharing framework, Ms. Cooper said.
Other jurisdictions, including the federal government, should “absolutely” consider Indigenous loan guarantee programs, said Niilo Edwards, chief executive of the First Nations Major Projects Coalition.
“It’s worked in other jurisdictions and it could absolutely be done in B.C. if the government wanted to do it,” Mr. Edwards said. “It can be done, it should be done and it needs to be done if we are to see the advancement of economic reconciliation.”
Coalition research shows loan guarantees can help First Nations negotiate lower interest rates, increasing financial benefits over time, Mr. Edwards said.
The AIOC loan guarantee helped level the playing field for the 23 communities who were part of the recent Enbridge deal, said Mr. Bourque, as some groups had more corporate experience than others.
Mr. Bourque, who lives on his family’s trap line near Anzac in northern Alberta, wants to make Willow Lake Métis Nation a key player in a lower-carbon future and is passionate about Indigenous ownership, saying it can provide significant economic benefits, give communities a greater voice in environmental issues, and add heft to the social and governance aspects of ESG (environmental, social and governance) policies for companies and financial institutions.
“Should [other jurisdictions] be looking at what the AIOC has done for Alberta and for our Indigenous communities? Yes, 100 per cent. But more importantly, I think they should be watching what we do with it after.”