Skip to content
Join our Newsletter

Oil and gas sector has long way to go in improving relationships with First Nations, say politicians

Proposed large-scale projects such as Northern Gateway have made it more important than ever for...

Proposed large-scale projects such as Northern Gateway have made it more important than ever for the oil and gas sector to form better cultural and economic understanding and mutually beneficial partnerships with First Nations.

And while it’s a goal that can be achieved, it will take a concerted effort, especially on the part of industry, to work diligently on building trust, focus on high-level dialogue within the context of a partnership and to gain a better understanding of cultural differences, say prominent politicians — both past and present — and First Nations leaders interviewed by the Bulletin.

The challenges are many

Joe Clark, a longtime federal Progressive Conservative cabinet minister who served as the 16th prime minister of Canada between June 1979 and March 1980, says there are myriad reasons why the dealings between Aboriginal communities and the oilpatch can often be contentious and laboured.

“I think there are three elements to the challenge. One is that there is a group of Aboriginals that, understandably, consider that they have been treated by Canadian society as outsiders. Because of that, they are quite suspicious of large Canadian projects and their inclination is to be against development issues generally — that’s a factor. I can’t judge that factor, but I think it would be unwise for anyone to assume that it wasn’t there,” he said.

“But I also think, particularly in the last several years, that there’s also a new factor, a balancing factor, which is that Aboriginal communities also have to have reliable means of access to productive economic activity,” Clark added.

“I think the room is substantial for partnerships to be built with oil and gas companies, but I think one has to realize that this will not be simple as there are some cultural and historical issues that have to be dealt with.”

Yet, so far at least, they have not been addressed adequately and with consistency. For instance, Clark says sustainability issues, which are often top-of-mind for many First Nations leaders and their communities, is a fact that many in the oil and gas sector only recently have a better understanding of.

“I think that it could be said that in the last 10 years there has been a significant sea change in many parts of the Canadian oil and gas industry recognizing that those sustainability questions have to be considered very seriously. So I think there is common ground here, but I would imagine that for all sorts of reasons — some of them historical and cultural — Aboriginal people are going to be more sensitive to sustainability questions than the population at large,” he said.

“Historically the basis for that has always been — central to Aboriginal thinking — a great respect for the relations of people to the land, of people to nature. So that value is going to be on the minds of Aboriginal negotiators more than most,” Clark added.

“I consider that simply a reality, not an obstacle. And I think if there’s a genuine demonstration of a sense that Aboriginal rights and issues have to be addressed, there will be by and large a reciprocal response to look for partnerships.”

Clark, who along with many other prominent Canadians representing diverse cultural backgrounds, is a board member with the recently formed Canadians For a New Partnership (CFNP) initiative, which was introduced in early September.

In its mission statement, the CFNP says its goal is to: “Establish and support a broad-based, inclusive, leadership initiative to engage Canadians in dialogue and relationship building aimed at building a new partnership between First Peoples and other Canadians. This initiative holds the promise of better living conditions, education, and economic opportunities for First Peoples, which must be the tangible results of that new partnership.”

Paul Martin, Liberal prime minister of Canada from 2003 to 2006, and prior to that federal minister of finance from 1993 to 2002, agrees that the chasm in understanding cultural differences is still wide and often challenges trust from a First Nations’ perspective.

“The fundamental issue is that indigenous Canadians and non-indigenous Canadians, by and large, don’t know each other very well. We’ve really got to change that,” said Martin, who is also a CFNP board member.

“The more dialogue there is between indigenous and non-indigenous Canadians, the greater degree of understanding there will be and the greater degree of trust there will be between both. That is the purpose of the partnership.”

But that’s not happening near enough on a federal government level, he contends, leading to increased distrust amongst First Nations. Martin said that the current First Nations/federal dialogue, on many levels other than natural resource development and transportation, also has an impact on negotiations between Aboriginal leaders and industry.

Martin believes the Stephen Harper-led federal Tory government must take part of the blame in creating the increasing mistrust felt by many First Nations toward both government and industry, pointing to a bill that was put forward last February as a case in point.

At that time Harper unveiled Bill C-33, or the First Nations Control of First Nations Education Act, saying the “long overdue” reforms would set quality standards for classrooms on reserves while placing more control in the hands of First Nations themselves.

Among the major tenets of the reforms: aligning education standards with provincial standards off-reserve, proper certification of teachers and student attendance requirements.

The education of Aboriginal children has long been considered substandard in Canada, with graduation rates among the lowest in the country. First Nations youth who do graduate on reserve often have difficulties obtaining jobs or admission to post-secondary institutions because they are not provided with diplomas or certificates recognizing their accomplishments.

The bill — which provides $1.3 billion over three years to First Nations starting in 2016 — outlines ways in which Aboriginal communities can band together to effectively form school boards while receiving sustainable funding.

The legislation, however, also gives the federal Aboriginal affairs minister the power to impose third-party management on underperforming schools — something that has angred many First Nations.

It creates a so-called joint council of education experts, appointed by the minister and First Nations, who will report to Ottawa about how Aboriginal schools are performing. Schools will be required to hire inspectors to ensure the schools are adhering to the act and meeting standards for the amount of instruction hours, teacher performance and curriculum.

That inspector reports to the joint council. Underperforming schools will be placed under emergency management by the federal government.

Martin contends that those conditions are among the reasons why Bill C-33 has been overwhelmingly rejected by First Nations. And, vicariously, affect industry’s efforts to nail down agreements.

“Bill C-33 is the bill the current government brought down for on-reserve elementary and secondary school education and there are fundamental differences between the First Nations and the federal government on this bill,” he said.

“The First Nations are saying, ‘Look, there are aspects of the bill we don’t like and we want to talk to you about them.’ The government says, ‘It’s our plan or no plan.’ Our plan or no plan means that students going to an on-reserve school are going to continue to receive 40% less per capita than students who are going to school off reserve, which is unfair,” Martin added.

“It’s inequitable, it is discrimination and no one would stand for it. Unfortunately, it is the natural resource industry that bears the burden of something that is not their fault.”

Martin said that he has had discussions with many Canadian oil and gas companies and he’s of the belief that the industry wants to see the “best education possible” on-reserve.

“In talking to, and working with, those companies, they’re concerned because they would like to be able to get future executives and future workers from people who are today First Nations’ elementary students,” Martin said.

“They’re the ones pushing the hardest possible to have everybody get a Grade 12, and yet they are bearing the burden when the government says, ‘We’re not going to discuss our education plans any longer with the First Nations unless they’re going to accept 100% of what we’re saying.’ Well, nobody would do that.”

Martin said that that the federal rules oil and gas companies are regulated by should also apply to issues concerning First Nations education and health care.

“The government says you must consult and the oil and gas industry says, ‘We understand that.’ Well it doesn’t only apply to natural resources, it also applies to education and health care and all those areas,” he said.

“So what CFNP is really saying is that on the wide-range of issues of concern to indigenous Canadians, we believe that all Canadians must participate in the discussion. If that happens, we think these problems will be dealt with and if these problems are dealt with we’ll have a very, very different climate in terms of the development of natural resources.”

Much work to be done, but no easy feat

Fellow CFNP board member, Stephen Kakfwi, who had a 16-year tenure in the Northwest Territories Legislative Assembly, including a term as premier of the resource-rich territories from 2000 to 2003, is well-versed in the sometimes negative, and often controversial, dialogue that can occur between indigenous communities and the oil and gas and mining industries, as well as the federal government.

And while there’s been some progress made, there’s “still a lot of work to be done,” he said.

“This whole country is about resource extraction — mining, oil and gas — that’s primarily what Canada’s about. Much to the chagrin of some people, perhaps, much of those resources are on traditional lands and territories of the First Peoples and they either have to be extracted or transported across the lands of these people,” he said.

“So industry can’t operate the way they have for the last 150 years. If they want to build a pipeline from Alberta to the British Columbia coast, then right from the beginning they have to call in knowledgeable people so they know where the pipeline is going to go. For instance, whose territory it’s going to be on, who they should talk to and whether they have a project that has even a remote chance of being accepted.”

Having been involved in the dialogue and negotiations for projects like the proposed, yet ultimately delayed — if not doomed — Mackenzie Valley pipeline, as well as with successful petroleum development in the Norman Wells region and various diamond mining initiatives, Kakfwi says both sides have to do their parts to bridge the gap that still often exists.

“I’m often critical of oil and gas and mining companies, but I also applaud them when they do good things. All I can say is I know we’re not consistent with knowing how to go about initiating and planning projects, whether they’re pipelines or mines. We need to reach out to industry and say, ‘We would like to help with that’ so we’re consistent,” he said.

“We need to get to know each other. We’re not always going to succeed, but all we’re saying is we’re still going to have differences, but the message is your odds of succeeding increase substantially if you get to know, and actually listen to, what people are saying and you take their interest into account right from the beginning,” Kakfwi added, saying it would be pertinent for high-level executives to be part of that process.

“If you’re wanting to do a project through traditional territory, and there’s six communities in your right-of-way and you don’t know the name of one chief of any of those communities, and you’ve never been to any of the communities, you might as well just walk over to your ship and blow a hole into it yourself. You’re not going to go anywhere — it’s a sinking ship and you’re not going anywhere.”

Kakfwi points to one pipeline company executive as an industry leader who gets it.

“A guy like Ian Anderson [president of Kinder Morgan Canada] puts his time in and tries to get to know every chief in the line of work he does and that he has to deal with. He knows their wives, he knows their communities, he knows the conditions of the roads and the schools — he makes it a point,” Kakfwi said. “That’s what industry needs to do.”

That said, Kinder Morgan’s proposed Trans Mountain expansion, which would twin a 60-year-old line running from Alberta to Vancouver and triple its capacity, is facing strong opposition from Aboriginal and environmental groups.

In an interview last year, Anderson spoke of the importance of top officials of energy-related companies being front-and-centre in the dialogue with First Nations and other anti-fossil fuel project proponents.

“Facing the public is not something the producers were doing a decade ago in a large way and certainly not what the pipelines were doing. That has fundamentally changed,” he said.

“I think I recognized some years ago that I was not going to rely upon consultants and staff to go into the hard corners. We need to, as an industry, go into the tough corners — you don’t always win in the offensive zone, you need a good defensive game, too.”

Anderson noted that the “tough corners” include interaction at the municipal level with local elected officials, First Nations communities and even opponents of a project.

“I think we need to go to all of those places to get a full appreciation of what the issues are. I always say all issues are local, politics are local and in many respects all benefits can be defined locally,” he says.

“That’s when you appreciate what’s important to the people whose lives you’re impacting. And if you’re not investing the time there, I don’t think you’re fully understanding and appreciating what you can do to make a difference.”

Mark Gordon, a spokesman for TransCanada Corporation, said consultations with landowners, municipalities, elected officials and Aboriginal communities are an integral part of the Energy East project planning process, and have been since the beginning. Recently, the company was recognized for its engagement efforts by important constituents in Saskatchewan and Ontario, including the George Gordon First Nation in southern Saskatchewan.

“Through our relationship with TransCanada Pipelines, we have conducted a traditional land use study, the first in all of Canada, which has allowed us to engage our community members and elders with respect to the Energy East project,” said George Gordon First Nation Chief Shawn Longman.

“We are confident that the project will pose very little risk and that any development, and subsequent operations, will be exercised in a responsible manner respecting the environment and our inherent and treaty rights.”

Since last summer, TransCanada says it has held more than 100 open houses giving more than 7,000 citizens and 158 First Nation and Metis communities, across six provinces so far, an opportunity to raise their questions and provide their comments, but also to convey factual information on the project.

“Throughout the full life-cycle of this project, we will continue to meet with Canadians along the route to communicate the numerous benefits of this project and, equally importantly, to listen to and answer any questions or concerns,” the company said in a statement.

Although progress on the consultation front has been made, Energy East, much like other proposed pipeline projects, still faces an uphill battle when it comes to gaining the acceptance of First Nation communities that the pipeline would have to cross.

Fontaine: A ‘seismic shift’ is occurring

Phil Fontaine, former three-term national chief of the Assembly of First Nations, told a recent Canadian Heavy Oil Association conference that First Nations communities are now experiencing a “seismic shift” in attitudes.

First Nations are seeking a positive transformation in their communities, “so that they become healthy, safe and economically and politically vibrant communities,” he said.

“The shift in attitudes means the language is also changing. What are some of the new words, the references that are being used? You can’t go to any community now to talk about any project in any sector without hearing people talk about resource revenue sharing, equity, joint ventures, collaborative undertakings, impact benefit agreements, letters of agreement, MOUs,” Fontaine said.

“That’s the language today. What that ought to tell us is that our people are generally not anti-development. Our people and our partners are really pro-development, but not development at all costs. Neither development that lets one size fit all. We have to reflect that in what we do in terms of the unique situation of each community.”

According to Fontaine, there are 663 First Nations in the country and 55 indigenous land bases. He said that each of these communities has a unique history, so future resource-based development has to reflect that uniqueness.

“Above all, besides knowing and understanding these differences, our behaviour here should make no difference from our behaviour when we go, for example, to China. We place great value in knowing and understanding Chinese culture. Something as simple as the exchange of business cards is a tradition,” Fontaine said.

“So if we know and understand that we have to behave and present ourselves in a particular way when we go, for example, to China, we should be just as [careful] about behaving that way here in our own backyard, in First Nations communities. Because if we don’t we’ll end up with failure — absolutely and without a doubt — and we can’t afford that.”

In an interview, Michal Moore, economics professor with the University of Calgary’s School of Public Policy, said that First Nations are “extremely diverse in their background and approach to land issues” and resource development, “which makes the dialogue or process more complicated,” especially at the outset.

“Indigenous people living on or from the land have a different view of the land potential, not often with thought about the mineral resources that underlie them though, given the extremely capital intensive activities it takes to acquire, process and ship these resources,” he said.

“As a consequence, the wealth they live with and use tends to fall more into renewable categories, like fisheries, wildlife and forestry, and is generally subject to more impact from competing activities like resource development.” 

Moore said that for the First Nations/energy industry dialogue to be successful, the development of some lexicon that gives equal weight to the values and land stewardship goals of indigenous peoples needs to occur.

“And then the creation of a forum of some kind needs to happen, where proposals, access and exchanges can take place that are neutral enough to allow agreements to be reached where the parties have confidence that these will be honoured over time and by successor interests,” he said.

“I note that this might in some cases take the position of leaving vast areas untouched, what economists refer to as the ‘existence value’ of the land. I would call this a new-pattern language, and right now I doubt we speak in a common language,” Moore added.

“Oil and gas markets are changing rapidly, and finding a way to meaningfully share the wealth of either access or actual development will probably only come when both parties really have a keen appreciation, and respect for, the other’s sense of time and long-term expected benefits.

Have lessons been learned from Mackenzie?

Both Kakfwi and Clark point to the long-proposed Mackenzie Valley pipeline as a good study as to what does not work.

“Had we [indigenous peoples] been involved from the beginning with the proposed project with industry, I think there would have been more patience and tolerance for co-operating on such a marginal [economically] project,” Kakfwi said.

“Instead, it fizzled. Some [indigenous] communities signed on and some others held out. That’s not a good way to run a project. Next time around, we can do better.”

First proposed more than three decades ago, the Mackenzie project proponents eventually hoped to build a $16.2-billion, 1,196-kilometre pipeline system along the Mackenzie Valley. It would have linked northern natural gas producing wells to southern markets. The main Mackenzie Valley pipeline would have connected to an existing natural gas pipeline system in northwestern Alberta.

The proposed project would have crossed four Aboriginal regions in the Northwest Territories: the Inuvialuit settlement region, the Gwich’in settlement area, the Sahtu settlement area and the Deh Cho Territory. A short segment was slated to be in northwestern Alberta near the N.W.T. border.

The pipeline would have transported up to 1.2 bcf per day of gas from the Mackenzie Delta along the Mackenzie Valley to Alberta and onward.

The proponents of the pipeline, led by Imperial Oil Limited, and including ConocoPhillips Canada, Shell Canada Limited, ExxonMobil Canada and the Aboriginal Pipeline Group, finally received final approval from the National Energy Board in 2011 for the pricey project, after more than six years of regulatory review.

Although generally viewed as a needed and positive outcome, after years of dithering from federal authorities the stakes had changed and the proponents put the project on hold, in large part due to rising costs and sinking natural gas prices.

Clark said that much has changed since the Mackenzie Valley pipeline was first proposed, which could bode well for current and future negations between industry and First Nations.

“I think there’s a really interesting parallel here with the Northwest Territories pipeline because when it was first proposed 30-some years ago, no real consideration was given to Aboriginal interests and a very strong, outspoken and pervasive opposition arose,” Clark said.

“Then fast forward several years and the most recent [Mackenzie] proposal, which has been approved by the National Energy Board, enjoys almost unanimous support in the North, in large part because there is a very active role played by Aboriginal people, including by Aboriginal companies that are part of the process,” he added.

“The bad news to all of that is that the new line may no longer be economically viable. I suppose the lessons to be taken from Mackenzie [in relation to Northern Gateway and other proposed projects] is that had we known 30 years ago what we now know today, there would already be a line in production. What I think is important to note is that agreement can be found if you work hard at it.”

Northern Gateway: A chance to get it right?

Alberta Premier Jim Prentice, a former federal Aboriginal affairs minister and for 10 years co-chair of Canada’s Indian Claims Commission, points to the current negotiations between governments, Aboriginal leaders and industry regarding the proposed Northern Gateway project as a prime example of the delicate balance required in an effort to reach a mutually-beneficial agreement.

“The first step, the first key, is the coast. I have long said that but there is work that needs to be done with all the First Nations. It’s hard to imagine Alberta accessing tidewater in the west without a meaningful partnership with First Nations on the corridor and on the coast but I think it starts at the coast,” Prentice said in a recent editorial meeting with the Daily Oil Bulletin and sister publication Oilsands Review.

“Opposition to Gateway actually began at the coast and then migrated uphill and so for these projects to succeed I think you need a coastal partner that is in the end prepared to be in the energy business and sees the economic opportunities inherent in that for their people,” he added.

“There’s lots of work to be done in the corridor for sure, and there’s an important part of this, too, which involves working with First Nations in Alberta who also are in the energy business. Some of the most outspoken, supportive people of West Coast access are the First Nations in northern Alberta who are energy partners in some of these projects.”

Prentice said that in his experience, First Nations are concerned with the environment, first and foremost, and there’s a need to discuss the environmental issues and satisfy some of the questions, in particular the protection of the environment on the West Coast.

“I think many of them see that discussion as a pre-condition to any discussion of economic benefits and I think this is misunderstood. I think people look at these pipelines and say ‘It’s all about the money.’ Actually, with First Nations, it’s not all about the money,” he said.

“In the case of the Coastal First Nations, I know for a fact it is about their concerns about protection of their environment, if there is a spill on the West Coast how would the environment be protected because all of these communities are small and they are very heavily dependent still on the ocean for their way of life so it’s not surprising they would be very focused on what happens if there is a spill.”

Advice to industry

Fontaine noted that in the next decade there will be on the order of $650 billion worth of investment in various resource sectors, and that “much of that development is going to take place on our lands and territories. That’s where Canada’s wealth is: in the North, on indigenous lands and territories.”

He added that industry “might as well get used to the fact that the world is changing” for all of us.

“And I would suggest to you that it’s changing for the better. Because you now have an opportunity to transform Canada into a place that’s good and fair, to all people. We will not only be talking about the Canadian economy, an economy that recognizes and is committed to value between prosperity, climate change and the environment, but it’s also about indigenous influence,” Fontaine said.

“That’s really the challenge that faces us here, whether we’re talking about oil and gas, pipelines or mining. You know, there are over 400 agreements between various mining interests and Aboriginal communities in this country. Fifteen years ago, there wasn’t a single one. So, some very big changes have occurred.”

While the cultural and business relationship between indigenous and non-indigenous Canadians is not likely ever to be smooth-sailing, the importance of bridging the trust gap can’t be underestimated.

“If we do not find a better way to live together on these issues, the reality is today that an awful lot of major Canadian projects will be tied-up and that is another incentive for the industry to take a very heads-up view on this,” Clark said.

“Never forget that there’s a sense that Aboriginal interests have been ignored or abused. One could enter an argument as to how valid that is, but in a lot of cases it’s highly valid. Regardless, there is a sense that they are something other than equal partners,” he added.

“There’s going to be openness to sensible proposals only if progress has been made on the idea that Aboriginal interests are somehow less important than other interests. That’s why getting behind some of the larger Aboriginal issues, quite apart from the development of pipelines and the delivery of product, would be a wise thing for industry to do.”

Kakfwi agrees, saying nothing less than the “creation of goodwill and a commitment” to working together as partners will do.

“When there’s been a history of our people continually fighting for our rights, our recognition and our respect and trying to find a way to get along with industry and governments, of course that impacts things,” he said.

“Very often the courts are the ones that tell governments and industry what they have to do. But we still have the problem of saying, ‘OK, let’s set aside our differences and see if we can muster up enough goodwill and understanding to hammer something out.’

“If there’s no goodwill on either side, then it doesn’t work. I’m just making the pitch that things are possible.”

- With notes from Elsie Ross and James Mahony

Daily Oil Bulletin