Participation and access to capital: Building blocks of economic reconciliation

A behind-the-scenes look at the historic Coastal GasLink equity options deal from four key participants.

Jesse McCormick of the First Nations Major Projects Coalition alongside panellists at IPSS 2022. This article is an excerpt from the Rights & Respect Magazine.

Back in 2019, when TC Energy decided to sell up to 75 percent of its interest in the Coastal GasLink pipeline project, they heard from partner Nations that they had an interest in having equity.

Tiffany Murray, director of Indigenous relations for Coastal GasLink, says the relationships with the Nations started over a decade ago when TC Energy first started engaging about the pipeline. “We have existing agreements with 20 Nations across the project and that really formed the original basis for partnership across the corridor.

“What we originally proposed and where we landed today are different. And that’s really been as a result of all of the work the Nations have put in, the collaborative conversations that we’ve been able to have, and being able to really understand those interests.”

“We did butt heads along the way, and there’s no lie about that,” says Chief Corrina Leween of Cheslatta Carrier Nation. “But that was how we got resolution at the same time. That’s how we worked out some of the issues that we saw at the table and what our due diligence to our people back home was. And we brought it to the table, and we were honest and open about it.”

The resulting equity agreements, signed in March 2022 with two entities—CGL First Nations Limited Partnership and FN CGL Pipeline Limited Partnership—representing 16 First Nations across the Coastal GasLink (CGL) pipeline route, give the Nations a 10-percent ownership interest as an option agreement to be exercised after the pipeline construction is complete.

For Chief Justin Napoleon of the Saulteau First Nations, one of the signing Nations, the economic benefits of agreements are key.

“The importance of it is the precedent that it sets. And the ability for Nations to have their own income coming in that’s going to give them the ability to self-determine their way forward. . . . For First Nations, I think economic stability and independence is key and essential to reconciliation and our ability to self-determine. Having this extra income come in gives us the ability to invest into our communities in a way that government funding doesn’t allow us.”

Just as important to Napoleon is that the Nations have a voice in a project that affects their lands. “Historically, we’ve never had that option. Projects would come in, they’d have everything already pre-designed, pre-laid out. The path of where the pipeline was going to go was already determined and we were basically consulted and expected to just go along with the project. Where this time there was flexibility and the ability and the willingness to learn and listen and find a better way of doing business.”

Working with the First Nations Major Projects Coalition on the deal provided the Nations with needed technical, business decision-making, and financial analysis support. “I come from a semi-remote community in northwestern British Columbia. . . . We have limited resources coming into our communities,” says Leween.

Napoleon and Leween also point out that access to capital and financing has been an obstacle for Indigenous communities, but that accessing financing through the First Nations Finance Authority is an option that Nations need to participate as full partners.

“One of the biggest factors that our communities continue to face is the Indian Act,” says Leween. “And how the act says ownership over the assets that lay within our traditional territories. . . . We are not able to levy those [to have] the capital financial piece in the business development that we’re trying to do independently and together within our communities.”

Access to capital through ownership of major projects could provide a different way forward. It’s hard not to dream of the potential for Indigenous empowerment.

“When we can start paving our own roads, building our own homes, building our own schools, our own daycares, then we can participate in the economy as a whole. That’s what we’re all getting ready for,” said Chief Corrina Leween.

The flexibility of the discussions with TC Energy about the Coastal GasLink deal was especially helpful to the signing Nations. “Looking at different ways of setting up this financing and the ability to leave the option until the end of the commercial operation of this project really eased up the requirements for financing,” says Napoleon.

Napoleon says that it is beneficial for companies to engage Indigenous communities early in the planning for major projects.

“It gives the Nations the ability to have a bunch of time to interact with their members . . . and explain to them the potential benefits an agreement like this. . . . Also, the earlier we’re at the table the earlier we get to have our input and our say, and maybe we have some new, better ideas, or just different ideas, in terms of we could do this for environmental protection in this area. Or just having that extra input from the First Nations as early as possible, getting us to the table, means we have a vested interest in seeing the project succeed, while also protecting the land that is critical for everyone.”

Murray agrees. “You inevitably build better projects when you work with communities. That, I think, is the no-brainer. The earlier you have that, the more opportunity to have real partnership, then the better your project will be.”

Closing the panel, Jesse McCormick of the First Nations Major Projects Coalition asked attendees to think about the tremendous potential of such partnerships.

“My invitation to you . . . is to think carefully about not only the benefits that accrued to First Nations from these types of arrangements but also think about the benefits that First Nations bring to those companies that are willing to enter into equity partnerships,” he said. “Think about the value that’s coming from the First Nations and flowing to the companies, and the opportunities that presents for economic development in Canada.”

This article was originally published in Rights & Respect, Issue 2.