Introduction

On 6 December 2018, the House of Commons Standing Committee on Natural Resources (the committee) agreed to undertake a study on international best practices for engaging Indigenous communities in major energy projects, including, but not limited to:

early engagement, mutual benefit agreements or similar contracts, accommodation measures, opportunities for Indigenous business as well as direct employment, outcomes for Indigenous communities after a project completes its lifecycle as well as, general challenges other countries have faced in their relationship with Indigenous peoples and how those countries addressed or solved those challenges…

Over the course of 10 meetings, the committee heard from a wide range of international and Canadian experts, including representatives from Indigenous and non-Indigenous governments, businesses, academic institutions and nongovernmental organizations. This report presents the committee’s study findings and recommendations to the Government of Canada.

The Government of Canada has a duty to consult and, where appropriate, accommodate First Nations, Inuit and Métis when it considers conduct that might adversely impact potential or established Aboriginal or treaty rights.[1] Furthermore, in its Principles respecting the Government of Canada's relationship with Indigenous peoples, Canada acknowledges its commitments to “a renewed nation-to-nation, government-to-government and Inuit-Crown relationship that builds on and goes beyond the legal duty to consult.”[2] Mr. Christopher Duschenes of the Department of Indian Affairs and Northern Development highlighted principles 4-6, in which the federal government recognizes the following:

• that Indigenous self-government is part of Canada's evolving system of co-operative federalism and distinct orders of government;
• that treaties, agreements and other constructive arrangements between Indigenous people and the Crown have been or are intended to be acts of reconciliation based on mutual recognition and respect;
• that meaningful engagement with Indigenous peoples aims to secure their free, prior, and informed consent when Canada proposes to take actions which impact them and their rights, including their lands, territories and resources.

Canada is also a “full supporter, without qualification,” of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which offers guidance on cooperative Indigenous relations “in accordance with the principles of justice, democracy, respect for human rights, equality, non-discrimination, good governance and good faith.” Article 32 of UNDRIP calls on UN member states to “consult and cooperate in good faith” with the Indigenous peoples concerned with the aim of obtaining “their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources.”[3]

While witnesses made it clear that free, prior and informed consent (FPIC) does not grant veto power to Indigenous peoples, the committee heard that the UN principle is protected by two international human right standards: 1) that “all peoples have the right to self-determination,” and 2) that “all peoples have the right to freely pursue their economic, social and cultural development.”[4] According to Dr. Dalee Sambo Dorough, appearing as an individual, “FPIC entails negotiation, dialogue, partnership, consultation and co-operation between the parties concerned, in good faith, [and] with the objective of achieving consent.” She added that states must recognize that human rights are not absolute: “there’s a constant tension between the rights and interests of Indigenous peoples and all others. In some cases, this constant tension is manifested amongst and between the Indigenous peoples concerned.”

This report presents evidence along a spectrum of Indigenous engagement practices, many of which are complimentary and interdependent (Figure 1). The first section discusses Indigenous consultation practices with the intent of securing FPIC. The second section addresses Indigenous partnership beyond the Crown’s duty to consult. Finally, the third section highlights Indigenous-led development as the preferred model for First Nations, Inuit and Métis engagement in energy resource development.

Figure 1: A Spectrum of Indigenous Engagement in Energy Resource Development

Considering the rich diversity of First Nations, Inuit and Métis communities, the committee acknowledges that the evidence outlined herein may not represent the priorities of all Indigenous peoples in Canada. Best practices should be determined on a case-by-case basis, in collaboration with Indigenous governments and communities. This report is presented in good faith, with the intent of strengthening Indigenous engagement and partnerships in the Canadian energy sector.

1.  Consultation: Foundations for Consensus-Building

The Crown has a duty to consult and, where appropriate, accommodate First Nations, Inuit and Métis when it considers conduct that might adversely impact potential or established Aboriginal or treaty rights. As Mr. Duschenes explained, this duty “stems from the honour of the Crown and is derived from section 35 of Canada's Constitution Act, 1982, which recognizes and affirms Aboriginal and treaty rights.” The duty to consult was affirmed by the Supreme Court of Canada in several decisions, including Haida, Taku River, Mikisew Cree, Little Salmon/Carmacks and Rio Tinto.[5]

The following subsections outline best practices, according to witnesses, for Indigenous consultation on major energy projects, with the aim of securing FPIC.

a)  Early and Ongoing Engagement

Witnesses agree that early and ongoing engagement is necessary to build long-term, constructive relationships between project proponents and Indigenous peoples.[6] In the words of Mr. Grant Sullivan of Gwich’in Council International: “In order to succeed, energy projects need to start with and be driven by the community. This helps ensure that projects are planned in a manner that aligns with the community's interests and needs.” Similarly, Mr. Duane Ningaqsiq Smith of the Inuvialuit Regional Corporation stated that “early consultation with rights holders facilitates common understanding of impacts on rights under a land claim agreement and alignment of mutual interests, such as the need for energy security and reduction of emissions.” He advises industry proponents to think of the time allocated to achieving FPIC as “an investment in a project’s success.”

b) Meaningful Dialogue

The committee heard that consultation with First Nations, Inuit and Métis should be conducted in good faith, yielding outcomes that reflect the values, interests and priorities of local governments, communities and social groups.[10] In the words of Mr. Nils Andreassen of the Alaska Municipal League: “for Indigenous peoples, good practice will feel right if the ultimate decision is values-driven and reflects local feedback … [I]t will be Indigenous peoples who will determine whether an engagement has been meaningful or a [best practice].”

c)  Inclusiveness, Accessibility and Capacity Enhancement

The committee heard that meaningful consultation should engage and address the needs of diverse communities and social groups, including women, children and youth.[14] Moreover, witnesses stressed that engagement processes need to be accessible and feasible for Indigenous participants, thereby enabling the achievement of FPIC.[15] In the words of Chief Laboucan-Avirom, Indigenous people “need to have the capacity to understand the technical aspects of [energy] projects, communicate information to community members, and gather information from community members and knowledge-keepers. This takes much more funding than is currently offered by Canada.”

2.  Partnership: Beyond the Duty to Consult

Witnesses told the committee that meaningful engagement with First Nations, Inuit and Métis should go beyond the Crown’s duty to consult towards a logic of co-development and business partnership.[19] According to Ms. Naina Sloan of Natural Resources Canada, “joint leadership and co-design offer a more certain path to identifying shared interests and enabling diverse parties to work together.” Indeed, Mr. John Helin, mayor of the Lax Kw’alaams Band, stated the following on behalf of his community:

To enable respectful development, Lax Kw'alaams does not want to be treated merely as another interest-holder in our territories. As title-holder to the lands and territories, Lax Kw'alaams must be a full participant in all processes relating to a proposed project and must also be a beneficiary of that project. This goes beyond engagement and includes consenting to the project. This should include: compliance with overall land and resource plans; co-operative determination of what approvals may be required; actively co-designing and participating in the processes leading to any approvals; and, ongoing involvement in compliance monitoring, including decommissioning of projects.

The following subsections address best practices, according to witnesses, for advancing energy co-development and business partnership with Indigenous governments and communities.

a)  The Application of Indigenous Knowledge

Based on the work of the permanent members of the Arctic Council, Dr. Ellen Inga Turi of the Sámi University of Applied Sciences defines Indigenous knowledge as follows:

[A] systematic way of thinking and knowing that is elaborated and applied to phenomena across biological, physical, cultural and linguistic systems. [Indigenous] knowledge is owned by the holders of that knowledge, often collectively, and is uniquely expressed and transmitted through Indigenous languages. It is a body of knowledge generated through cultural practices, lived experiences including extensive and multi-generational observations, lessons and skills. It has been developed and verified over millennia and is still developing in a living process, including knowledge acquired today and in the future, and it is passed on from generation to generation.[20]

The committee heard that Indigenous knowledge is often overlooked or underused in the resource development sector.[21] According to Professor O’Faircheallaigh, “there tends to be a deeply in-built assumption that western science offers the only valid understanding of environmental processes and outcomes.” He added that even when Indigenous knowledge is used, “it tends to be co-opted and presented in a frame that's very much dominated by western assumptions and western values.”

b) Sustainable and Equitable Development

UNDRIP recognizes that “respect for Indigenous knowledge, cultures and traditional practices contributes to sustainable and equitable development and proper management of the environment.” According to witnesses, sustainable development should include both environmental stewardship and socioeconomic benefits for local communities – namely, opportunities for long-term employment, professional education/training, and other social, economic and cultural gains.[25]

The committee heard that the benefits of Indigenous socioeconomic development extend to all Canadians. According to a 2016 study by the National Indigenous Economic Development Board (NIEDB), closing the productivity gap between Indigenous and non‑Indigenous people in Canada would lead to “an estimated increase in GDP of $27.7 billion annually, or about a 1.5% boost to the nation’s economy.” Ms. Dawn Madahbee Leach of NIEDB told the committee that such economic outcomes could be achieved if Indigenous people – “the most marginalized [group] in Canada” – were to have the same levels of education and employment as the average population (Figures 2 and 3). In this respect, she stated that “reconciliation should begin with economic empowerment.”[26]

Figure 2: Increasing Indigenous Employment Opportunities and Participation

Source:  National Indigenous Economic Development Board (November 2016).

Figure 3: Increasing Indigenous Employment Opportunities and Participation

Source: National Indigenous Economic Development Board (November 2016).

The committee heard that sustainable and equitable development can be the product of Indigenous-industry partnerships, such as impact benefit agreements (IBAs), equity partnerships and joint ventures.[27] Professor Newman explained that some IBAs have brought significant benefits to Indigenous communities, “particularly when they have included strong provisions supporting business development that outlasts a particular non-renewable resource or that builds from the base of an existing renewable resource.” Furthermore, Mr. Ian Jacobsen of Ontario Power Generation (OPG) affirmed that OPG’s equity partnerships with First Nations have been mutually beneficial and “can be excellent models for reconciliation.”

The committee also heard of exemplary joint ventures involving Indigenous-led businesses in the energy sector. Tarquti Energy Corporation is leading the long-term development of renewable energy in Nunavik (northern Quebec), while Onion Lake Energy (OLE), Frog Lake Energy Resources Corp. and the Fort McKay Group of Companies have built successful partnerships in Alberta’s oil and gas industry.[28] Speaking for the Onion Lake Cree Nation, Mr. Wallace Fox of the Indian Resource Council (IRC) described the joint venture between OLE and Calgary-based BlackPearl Resources as a “success story.” He stated the following:

In my tenure as chief, we took this revenue from the royalties, from the partnerships and from the contracts, creating employment, purchasing a construction company, where people went from getting the social assistance norm of $150 a month to making $2,000 a week driving big machinery. We built roads, lease buildings and lagoons. We invested in a carpentry program. We built 400 to 500 homes with the resources—again, with jobs, drywalling training, for both men and women. We built our own school, our own training centre. We have our own care home. We're also looking at a private hospital now, in Leduc—which is $100 million.

Mr. Fox affirmed that “partnerships with private industry are the key to the growth of [Indigenous] economies.”

c)  Infrastructure Modernization and Energy Independence

Many Indigenous communities are located in remote areas with limited infrastructure and access to energy resources. According to Professor Poelzer, energy access and security is an ongoing issue for the vast majority of remote and rural communities in the territorial and provincial north: “The high cost of energy often contributes to grinding poverty and the ‘heat or eat’ dilemma in many communities. The lack of stable power is a deterrent to business development and business investment.”

By way of example, Mr. Smith described the Inuvialuit Settlement Region (located in Canada’s western Arctic) as “resource rich but infrastructure poor,” subject to one of the highest energy costs in Canada. He stated the following:

There is a lack of commercial access to the ocean, local energy production facilities, adequate telecommunications … we truck most of our energy needs from thousands of kilometres away, either from British Columbia or Alberta, to fuel the energy in the communities. This doesn't make sense to us when we're sitting on nine trillion cubic feet of gas.… You can imagine the greenhouse gas emissions from that. We are subject, as well, to high transportation surcharges, and there's a limited number of companies that can supply this energy. The region has very limited disposable income among residents and inability to pay more. Residents give up nutritious food, home repairs and opportunities for their kids so that they can pay for heat and power. The energy costs in our region are probably the highest in Canada. There is a real desire to develop local energy resources, but infrastructure, again, is needed.

Witnesses told the committee that the global transition towards a low-carbon energy future presents a unique opportunity to build long-term Indigenous partnerships in remote and rural communities.[32] In the words of Professor Poelzer:

If we think about the national railway of the 19^th century as the key infrastructure project that helped to build Canada from sea to sea, I would suggest that the global energy transition offers Canada the same opportunity in the 21^st century.… The energy transition can be a nation-building project that includes all founding peoples and contributes to our journey of reconciliation, through steel in the ground.

Chief Byron Louis of the Okanagan Indian Band, who shared the perspective of the Assembly of First Nations (AFN), affirmed that the energy sector is a “much-needed partner” to advance a renewed relationship between Indigenous governments and the Crown, adding that “First Nations are increasingly joining Canada's growing clean energy economy as a way to generate revenue in a manner that is consistent with [their] cultural and environmental values.” Similarly, Mr. Sullivan told the committee that “small, remote northern communities like Inuvik have unique energy needs that provide a strong foundation for pursuing smaller and more sustainable community-based renewable energy developments.” Finally, Mr. Smith stated that natural gas should be “a key component in the global transition from coal and diesel, maximizing local resources while helping reach carbon emission reduction targets.”

3.  Indigenous-Led Development: The Way Forward

Many of the best practices outlined in the previous sections are complimentary and interdependent. Their underlying objective is to strengthen Indigenous engagement and partnerships in Canada’s energy sector, as part of ongoing efforts to reconcile Indigenous-Crown relations. According to established international human rights standards, First Nations, Inuit and Métis have the right to self-determination. Furthermore, the federal government acknowledges that “their self-government is part of Canada's evolving system of co-operative federalism and distinct orders of government.”[37]

To this end, the committee heard that Indigenous-led development is the “preferred model” for the development of Indigenous lands and resources, presenting “win-win” opportunities that can bring “alignment between otherwise competing interests.”[38] In the words of Dr. Dorough, “[the] outcomes of Indigenous-initiated and Indigenous-controlled development are bound to be far more responsive to the priorities, interests, concerns, cultural values and rights of Indigenous peoples.” This view is consistent with the UNDRIP conviction that “control by Indigenous peoples over developments affecting them and their lands, territories and resources will enable them to maintain and strengthen their institutions, cultures and traditions, and to promote their development in accordance with their aspirations and needs.”[39]

While First Nations, Inuit and Métis still face disproportionate barriers to business development in Canada, as previously noted, witnesses highlighted major advancements in Indigenous education, employment, entrepreneurship and innovation over the past few decades.[41] For example, according to Ms. Leach, studies by the Organization for Economic Co-operation and Development (OECD) indicate that the Indigenous business environment in Canada is more favourable than those of other countries, with 58 Indigenous-owned financial institutions, two Indigenous-owned banks, and more than 56,000 Indigenous businesses nationwide. Furthermore, Professor Poelzer told the committee that First Nations businesses have been growing at 8.2% over the last decade, outstripping the growth rates of OECD countries; that their business start-ups are 500% greater than the Canadian mainstream, reflecting a high degree of entrepreneurship. Similarly, Ms. Whitford spoke of a revival of Indigenous entrepreneurship and innovation in Canada, where First Nations, Inuit and Métis are creating “incredible businesses with new ideas.”

The committee heard that First Nations, Inuit and Métis businesses would benefit from measures to enhance their capacity for trade and cooperation with other countries and Indigenous peoples.[42] For example, Ms. Whitford called for “more government support of … international liaising, engagement, discussion [and] communication between Indigenous communities,” while Mr. Beamish suggested that Canadian embassies and consulates would do well to develop more awareness of Indigenous-based opportunities at home. Mr. Fox suggested that the Government of Canada should facilitate economic development partnerships between Indigenous peoples and foreign investors; leverage more Indigenous leadership in international delegations. Furthermore, Professor Poelzer spoke of the “enormous opportunity” to market Indigenous know-how around the world, especially in the renewable energy sector of northern-based economies. He cited the Arctic Remote Energy Network Academy as a model of international energy development cooperation, bringing together “energy champions from Indigenous communities, from everywhere from Greenland to Canada to Alaska.”

While witnesses pointed out that other countries look to Canada for best practices on Indigenous issues, including consultation, engagement, land rights and self-government agreements, they made it clear that Indigenous-Crown relations in our shared energy sector are a work in progress.[43] As Professor Newman put it, “the best practices are probably still ahead of us and are ones to keep seeking,” in partnership with First Nations, Inuit and Métis.