Natural Resources Committee on Feb. 21st, 2019

[The Chair, Liberal, James Maloney]

Good afternoon, everybody. Thank you for joining us. It's good to see some of you back at the committee.

We have three sets of witnesses today.

We have Raylene Whitford from Canative Energy. Hopefully, you can hear and see us by video conference. Judging by your smile, I think the answer is yes. Great.

We have from the Indian Resource Council, Stephen Buffalo, Wallace Fox and Chief Delbert Wapass. Thank you all for joining us.

We're also expecting Mr. Beamish from Anokasan Capital. I understand he is stuck on a train. He's delayed and may not make it at all, or we may possibly bring him in by FaceTime or something else. We'll play that one by ear.

Let's get started.

Ladies and gentlemen, each group will be given up to 10 minutes for your presentation. Once all presentations are finished, we will open the floor to questions for you.

My job is to keep the time, so I may have to interrupt you at some point and politely ask you to finish quickly, or, in some cases, to stop. I apologize in advance.

Gentlemen, you're here with us. Why don't we start with one of you or whomever you designate as your speaker?

[Wallace Fox, Chairman, Indian Resource Council]

Good afternoon.

[Witness spoke in Cree]

[English]

I was taught this way to address people no matter where I travel. In our language, I am acknowledging everyone here in the name of the Creator.

Good afternoon, and thank you, chairpersons and members of the committee, for inviting us to appear before you today. I understand you want us to share some best practices from the energy sector that could be helpful to other indigenous people internationally. We are happy to do so.

I am here on behalf of the Indian Resource Council, along with our president and CEO, Mr. Stephen Buffalo; and our vice-chair, Delbert Wapass. All of us come from first nation territories that have been involved in the oil and gas business for a long, long time.

In my case, I come from Onion Lake, Treaty No. 6 first nation, in central Saskatchewan, on the Alberta border. I've been in leadership for 30 years. I have since retired, last summer in June, as chief. I did not seek re-election to pursue other interests.

Our community is north of Lloydminster. It's probably the biggest heavy oil producer on Indian land in western Canada. We're producing about 12,000 barrels of heavy oil a day, of heavy crude in the middle of the oil formations.

I've been in council leadership since I was 21 years old. I became chief when I was 25. As I've said, I've retired to pursue other interests.

During my tenure as chief we were able to pursue significant benefits from the oil and gas by creating our own energy company, Onion Lake Energy. I don't know if you're familiar with Indian Oil and Gas Canada, an arm of Indian and Northern Affairs. The status quo is that they negotiate on behalf of first nations people. After they negotiate with the oil companies surface rights, exploration rights, royalty payments, etc., they come to first nations. Then they tell us to sign here. Well, I'm not one of those people who you tell what to do, especially government, Indian Affairs.

We created our own company back in 1990. Then we farmed out all the energy exploration rights to our energy company on our land, which is about 150,000 acres of land. It straddles the border of Saskatchewan and Alberta, north of Lloydminster. Then we told Indian and Northern Affairs Canada, through IOGC, here's the permit. We need the permit now. We've negotiated an oil deal, which is a joint venture in the working interests of first nations, our community. We basically run everything midstream, downstream and upstream in our community. We've entered into negotiations in a partnership with BlackPearl Resources out of Calgary. CNRL was producing on our land for many years.

We've since created many other business opportunities as a result of our joint venture in our community within the oil and gas sector. We have pressure trucks, service rigs, vacuum fluid haulers. We have different companies that basically provide service on a competitive rate with industry, with our partners.

Stephen Buffalo, the president, is from Maskwacis, which has also been a long-standing oil producer for many years, since the mid-seventies and eighties.

The Indian Resource Council is a national advocacy association that represents approximately 130 oil- and gas-producing first nations, mostly in western Canada. There are representatives from Ontario and within B.C. About 60 of these first nations have active production on their lands. The rest have either shut in production or have the potential to produce when the oil industry picks up.

Our main mandate is to ensure that our members are actively involved in this important industry and that they receive a fair return on oil and gas resources.

We have come a long way since that era, back in the seventies and eighties, of government paternalism, with indigenous people only being seen and not heard. I believe that in our community we've broken that pattern and blazed a trail in many of the different sectors...of what the government has told us.

As I said, I've been here since 1982, in leadership. I've seen the change in government and the paternalistic “policies” regarding indigenous people. I've always taken the position that we can do just the same as what mainstream industry is doing.

As a result, today in our administration and community we have more than 800 employees. Many of the senior management in all of our sectors are from our own membership. We've shipped them off to university, and they come back and work for us. My job at the time as chief was to create that opportunity for them, through the sector and industry. We reinvested our own resources back into our human resources and our community. If that's not a success story, then I don't know what is.

Our population is 6,500. Almost 4,000 live on first nations—in our community it's about 3,800.

IRC's mandate, again, is to assist and to be the vocal centre representing the industry and advocating, through IOGC—Indian Oil and Gas Canada, the sub-arm of the department—to ensure that the royalties are there, that the lease agreements are intact and that they support first nations. Many of our communities don't have that support system. Fortunately for us, we've been able to do that in our community. Many other communities have done that, also.

IRC has been instrumental in changing this mindset over the course of the last 30-plus years that it's been in operation. We've worked hard in succeeding and building very good relationships with industry over the years. We now consider industry as our partners and allies, and not adversaries. We have made many gains through joint ventures, equity ownership and capacity and employment programs, as I mentioned earlier.

We are constantly reminded by governments that partnerships with private industry are the key to the growth of our economies. We agree and have worked hard to achieve this goal. We have many success stories, such as the Blood Tribe, our community of Onion Lake, Frog Lake Energy, Fort MacKay and many others.

There is no first nation today that will agree to a lease arrangement that does not provide benefits over and above royalties, such as equity ownership, joint ventures, employment and so on. We have been successful in asserting our rights to resource ownership based on our aboriginal and treaty rights. Our modus operandi is based on a notion that economic and financial sovereignty of our nations go hand in hand with resource development, which is an important component of this equation.

The key to success is building our capacity, so training and education is an absolute requirement. Today, as I said earlier, many young people are completing college, university and technical programs. They did not have that opportunity a few years ago.

We have been very vocal in supporting the oil and gas industry in matters such as its opposition to Bill C-69, which threatens to take away the benefits and gains we have made.

Turning to the honourable committee, on the one hand we have no recourse but to constantly fight the paternalistic, outdated policies of the Department of Indian Affairs and Northern Development. That's one challenge. On the other side, we've had to work and earn the right to sit in the boardrooms and create that opportunity with the oil and gas industry. We have done that in the last 30 to 40 years, but this legislation is now going to impede in some of those aspects and go backward instead of forward.

We also speak strongly in support of building pipelines such as TMX and others, so that we can get our products to the proper market and stop relying on just one customer, who is taking advantage of us.

We need and must take Canada back to the days when we were respected and seen as one of the best places to invest in business. That's why we've chosen to speak out in support of the oil and gas industry. When this industry hurts, as it does now, Alberta hurts, Canada hurts and indigenous people hurt even more.

If you can step into our shoes in that sector, you would see that we had nothing until 1979-80 when we started entering into oil and gas. In using that resource, on the one hand over here, the funding regime based on the policies of the government is never ever adequate for the populations and needs of first nations. What we've done is taken 60% of how we operate in our community and reinvested back from the resource sector into our own people, for roads, jobs, housing, education, while the Government of Canada is over here. As you may or may not be aware, we're the only community that stood up against Bill C-27, the transparency legislation. We won that in Federal Court.

It was not a matter—

[The Chair, Liberal, James Maloney]

Mr. Fox, I'm going to have to ask you wrap up very quickly, please.

[Wallace Fox]

—of not disclosing anything. It's a matter of principle. The government...we agreed to an audit over here. This belongs to the nation's people, so we provided that information. We've also been approached by the indigenous people of Kenya. Stephen can speak to that.

In conclusion, there's a wealth of experience and expertise within indigenous communities in Canada in terms of energy and related sectors. We will be happy to share more information and answer questions if time permits.

Thank you again, honourable committee.

[The Chair, Liberal, James Maloney]

Thank you very much.

Ms. Whitford, we'll go to you.

[Raylene Whitford, Director, Canative Energy]

Thank you for this opportunity. I apologize that I have to join you from London. I have been working on a contract in the Middle East. I was due to travel back tomorrow and jumped at the chance to speak with you, but, unfortunately, I can only do so from London.

My name is Raylene Whitford. I'm Métis. I'm an oil and gas professional. I've been working abroad in the international energy sector for more than 10 years. I'm a chartered accountant. I have an MBA in oil and gas management, and I've spent the last 10 years working in finance in London.

In my career, I've worked on nearly every continent in the world, both in strategy and audit restructuring. I also have field experience. I took a sabbatical in 2015 to return to northern Alberta and work as a female roughneck on a drilling rig for Devon Energy for six months. I've also been a director of an oil and gas company listed on the London Stock Exchange.

As I said, I'm working in the Middle East at the moment, on a contract that is due to end this summer. My plan is to return to Canada to contribute to this really exciting dialogue that's ongoing with indigenous people in Canada. I'm also a Ph.D. student in indigenous studies at the University of Alberta, and I'm looking to research the factors and decisions that have contributed to indigenous communities becoming high performers in the energy sector in communities such as Fort McKay, Onion Lake, etc.

I'm getting a bit of audio feedback.

[The Chair, Liberal, James Maloney]

It's clear on our side. If you can tolerate it, we're okay.

[Raylene Whitford]

That's great.

I am the founder of a social enterprise called Canative Energy. It was founded in 2016 when I was on a trip to Ecuador. I spent three years living in the Latin American country. I was down there for a four-month project and after two months, I absolutely fell in love with this tiny country in South America.

I was there working with a national oil company on a cost subsidization project, and it was very clear to me that the indigenous communities working with or who were affected by the energy companies' activities were receiving assets such as hotels, barges, coffee roasting machines, etc., learning how to use these assets, but weren't able to monetize or commercialize the assets.

Canative Energy met with 11 different communities in Ecuador and assisted them in commercializing some of their businesses.

I understand I'm unique. I'm female. I'm indigenous. I'm a professional in the oil and gas sector. I believe that I'm able to see both sides of the industry, having spent 10 years working internationally. I'm also the first in my family to go on to post-secondary education, and the first to leave Alberta. I appreciate that I am in a very privileged position in that, hopefully, throughout my career, I'll be able to be a bridge between the two stakeholders.

It's unfortunate, and not only in Canada, that in some people's views indigenous communities and the sector are naturally opposed. I feel as if most of the conversation around the industry and indigenous communities is very binary: it's either good or it's bad. And a lot of people think they are inherently pitted against each other. But as you heard from Mr. Fox, there are examples where industry and communities can work together and achieve something better than what was before.

I often hear that oil is bad. To me, the end product is not the issue. There have been many examples of the Dene, for example, using petroleum deposits found on the North Saskatchewan River to seal their canoes. As well, the Waorani, an Ecuadorian indigenous tribe, see oil as the product of the spirit people who live beneath the crust of the earth. So the product is not the issue; it's the political economies and the imbalances in power that this industry brings to indigenous people.

I'm maybe going to be a bit controversial and acknowledge some similarities between the industry and indigenous communities. From my perspective as somebody who's worked in the industry with indigenous people, and being indigenous myself, I see three main similarities. First is that a large number of stakeholders are involved, both in indigenous communities and in the energy sector. So you have a non-homogeneous opinion among a large group of individuals. You have different values, different objectives, and that in itself is very difficult to manage.

The second is that there are some very harsh stereotypes. When I worked on the drilling rig in northern Alberta, I faced more racism than I did sexism. As a female professional working as a rig hand, it was brought up more often than not that my last name was Whitford. So there are inherent stereotypes facing indigenous people, but also for the energy sector as well. There are individuals who think the energy sector is inherently bad and can't make any valuable contribution to the world. Both are facing that.

The third is that the future for both stakeholders is very uncertain. You have indigenous communities who have had a long history of trauma; they're still facing the same difficulties, and the future looks very uncertain for them and for us. It's the same for the energy industry. With the pace of change that we're seeing in technologies, the shifts on the world stage in terms of power and the energy change, it is very uncertain as well.

I think these three factors, if you bring them together, are potentially going to result in conflict. I think it's important for us to acknowledge those and to think of them when we are beginning this conversation.

I'll give you a bit of background about Ecuador. Ecuador is a very small country in South America, with about 16 million people. It's located on the equator. It's a very cash poor country, so the country has very high levels of foreign debt. Twenty-one per cent of the country's population live in poverty and the majority of the indigenous population are within this 21%. There is a social benefit. It's a socialist country, so individuals, if they're registered with the government, may be eligible to receive a stipend of $70 a month. There are families who regularly live on less than a hundred dollars a month.

There is a high level of corruption in the country. The oil industry is very mature; they've been producing since 1970. The mining industry in Ecuador is beginning to develop, and it looks like it will be there for the long term, which is potentially good.

In my time at Canative working with the communities, getting to know the country, both the government and the individuals on the ground, I have gained three key learnings that I think translate to the Canadian context.

The first is the importance of diversification of income streams. Mr. Fox mentioned it, and I can't stress too strongly how important this is. I'll give you an example. We met with the Huataracu, a small community of about 500 individuals. They're located six hours from Quito, the capital city, and then another three hours by boat or by car.

I don't know how to say this in Canadian English, but they received what is called a “digger” in London English. They received a piece of heavy machinery from Petrobras 20 years ago and used it to gain contracts with the national oil company. They reinvested those proceeds and grew the one digger to a fleet of 11 pieces of heavy machinery. This small indigenous community was sitting on an investment of about half a million dollars, which was absolutely admirable.

The issue is that they relied solely on government contracts for road maintenance. So even though they were able to have this income stream, as soon as the oil price crashed in 2014, that activity stopped and they were left without income. That was a very big issue for them. They were left having to maintain the machinery, etc., and they really had no other way to support their people.

I was able to see communities like that, and then right next door to see other communities that not only had—sorry, the online feedback is really bad—

[The Chair, Liberal, James Maloney]

I'm going to have to ask you to conclude fairly quickly too, maybe in about 30 seconds.

[Raylene Whitford]

I'll mention the last two points. One is building capabilities. This was mentioned before. This is very important for the community, not only on the technical side and post-secondary further education side, but also just for basic business knowledge.

The third point is having a long-term plan. Often industry is very short-termist. If you look at the average life of an oil well, it's potentially 10 years, or less than 10 years. Often what we see is that communities may align with this short-term view as well, but it's very important for both industry and communities to have a long-term plan that is aligned, if they are to be able to move forward.

Hopefully you didn't have as much audio feedback as I did. It's a pleasure to speak with you all and I look forward to answering any questions you may have.

[The Chair, Liberal, James Maloney]

Thank you. The feedback will come shortly.

I think we have Mr. Beamish on the phone.

Can you hear us, sir?

[Robert Beamish, Director, Anokasan Capital]

Yes, I'm on the phone.

[The Chair, Liberal, James Maloney]

Thanks for joining us. I understand you're stranded at the train station still, but you were kind enough to phone in.

If you're still able to participate, the process we're following is that you will be given up to 10 minutes to do a presentation, and then there would be some questions afterwards, but given where you are, and without knowing what your physical surroundings are like, I'll leave that to you.

[Robert Beamish]

I just got into an Uber, and I'm on my way to Parliament Hill, but I don't know if I'll make it. I may make it before 5 p.m., but I'm still ready to do the presentation. I have my notes in front of me and, hopefully, you have the same notes.

[The Chair, Liberal, James Maloney]

Okay. Go ahead. If the Uber driver's okay with it, we're okay with it.

[Voices]

Oh, oh!

[Robert Beamish]

Excellent. That sounds good to me.

Thank you very much for accommodating this, and thank you for asking me to speak. My name is Robert Beamish, and I'm of Métis ancestry. My father is Algonquin Métis and Irish, and my mother is Arawak—which is the name of the indigenous people of Jamaica—and African Jamaican from Ghana.

My business partner Evan Wilcox, who is also Métis, and I started Anokasan Capital, which is a specialized brokerage firm that specializes in securing capital from east Asia—investors in China, Hong Kong and Japan—for projects that are owned by Canadian indigenous communities. We bring a bit of a different background, in that most of the work we do is with Canadian indigenous communities but from the international perspective of bringing in investors from Asia—China, Hong Kong and Japan—and managing the cultural differences and relationship-building process from that [Inaudible—Editor].

Here's a little bit specifically about how we started. Evan and I were actually working together at the Canadian Chamber of Commerce in Hong Kong. After a great year of business, we looked back and started asking different questions of our constituents. We started to ask how much of the capital flowing to Canada reached indigenous communities and how many of those businesses that we helped expand to Hong Kong were indigenous. The answer was a resounding zero. We set out to change that by starting this entity, Anokasan Capital. Anokasan means eagle in the Cree language.

Some of the best practices that we've learned over time have come from failure, which is a great way to learn. I don't always recommend it, but if it does come up, I definitely seize the learning opportunities in that. We will be speaking from some of our failures as well as some of our successes.

Our first point is to start with understanding. Seek to know before seeking to grow. Put the community needs and community understanding before going into proposals. Before drawing up contracts or agreements, go in and understand not only the economic priorities of the community but also the social priorities, and whether the social priorities and issues can be addressed by a project. Next—I believe Raylene spoke of this—discover an alignment between project officials, community leaders and the actual community members, because there can be so many voices at the table, and sometimes it's easy to speak on behalf of an entire group when that might not be the case.

In terms of communication alignment, provide the platform for concerns to be voiced, or create one. Have regular intervals for communication. Encourage positive and negative feedback. Encouraging negative feedback—because there will always be some—allows concerns to be addressed upfront in the planning process of a project and the relationship building stages, rather than having them remedied in the later stages of a project, resulting in longer delays. Having regular intervals for communication can be really effective, as well as having avenues for dispute resolution and allowing for voices of all levels to be heard regarding the project, because projects often affect all levels of the community. Although some levels may be onside, others may not. Knowing this upfront provides an avenue to address disputes prior to shovels hitting the ground.

The next point is cultural alignment. Our differences can only bring us together once we understand how they separate us. We do a practice of actively becoming aware of our own cultural biases, which affect how we do business, because we work between two very different cultures when working with investors in east Asia and working with local indigenous communities. We see how the cultures that they operate in affect how they do business and how they build relationships. We're also very aware of how our culture affects how we're doing that. We determine our own biases, how they affect our decision-making process and how we go about doing business, and we ask our partners to do the same.

As well, being proactive when it comes to understanding protocol just shows that you're a good partner in building these relationships and understanding the protocols related to the land, the community and the relationships with elders. These protocols are fundamental to culture, community and way of life. Any kind of partnership with the community affects so many levels, and these protocols should be understood and adhered to at every level with technical partners as well as with project delegates.

We're now moving forward to the four Es. Sustainable communities start with sustainable development. The four Es that we look to integrate are employment, equity, environment and education. These are now looked for and integrated into a lot of different projects. We look to integrate them upfront after we do that knowledge and understanding phase.

After we take that knowledge of the community, we look for ways to integrate these four Es into proposals that are meaningful and impactful to that community and their specific needs. We don't want to leave these as two concessions made in a project proposal, but by integrating them upfront it shows that we are committed to not only this project but to the community, because these are long projects that require long relationships with partners.

The last point, in terms of what are best practices for us, would be informational alignment, which comes down to what gets measured gets delivered. Just as projects are measured in regular intervals, the development of projects is measured as well as goals and certain signposts of development. Those measurements should also be had for community initiatives as they relate to employment and education, for a twofold reason. One, they show that these initiatives are being delivered upon and that certain aspects that were agreed upon in proposals are being met.

The second point is that this information is critical to a lot of communities, where statistical information is lacking in many of them. To be able to provide numbers and statistics can help policy-makers generate policies that can be impactful once they know certain trends and demographics within their own community.

Those are our best practices.

There are also some common pitfalls that we've hit. The first one is that being unresponsive doesn't necessarily mean being uninterested. So many people wear different hats within the community and timelines can get stretched. What is a timeline for us may not be a timeline for them. We don't know everything that's happening within the community, the protocols they have to go through or the people they have to speak with to get approval. Sometimes no response doesn't mean that interest in the project is lost. That's the first one.

I'd also point out that there's a concentration risk in relationships. We had a case where we were working with a community in northern B.C., and our entire relationship was with a specific economic developer. Sadly, that economic developer's wife passed away and he was unable to continue his work and stepped down from his role. All of our negotiations up until that point were with that one person, and the project development and understanding as it related to that community was with that one person, and everything fell through at that point.

It's important to note that and to loop in more people to account for that.

[The Chair, Liberal, James Maloney]

Mr. Beamish, I'm going to ask you to wrap up, if you could, please.

[Robert Beamish]

Absolutely.

The last two pitfalls would be turnover in elected governments and understanding the legal structure of the community. Finally, the most important point would be to apply old knowledge to a new situation and treat every situation as fresh. Although you can learn from experiences in the past, each community should be looked at with fresh eyes.

That would be everything.

Thank you very much for your time. I'm sorry I couldn't be there in person. I'm just coming up to West Block now. I'll see if I can make it through security to join you guys inside.

[The Chair, Liberal, James Maloney]

Thanks very much.

Mr. Hehr, you're up first.

[Kent Hehr, Calgary Centre, Lib.]

Thank you very much, ladies and gentlemen, for your very forthright presentations.

It's great to have indigenous voices here to guide us on international best practices and how we move forward on having better resource development.

I was listening very intently, and it seemed that your suggestion is that early engagement with the community is very important to successful resource development, and understanding, from both the resource company as well as the people on the land, what is going to work among all parties. Have you undertaken a lot of the work in seeing a successful energy project move forward?

[Robert Beamish]

Early engagement is fundamental. Engagement is going to happen regardless, so the earlier you start this conversation the more you show not only your investment in that relationship but also in that community and its mutual success.

[Kent Hehr]

Ms. Whitford, from your work in Ecuador and around the world, what best practices have you seen, undertaken or learned that we could implement in Canada to have a successful project move forward?

[Raylene Whitford]

I think that's a very valid and big question. To reiterate, I have learned three keys in Ecuador.

First is diversifying income streams, making sure the community is not wholly dependent on the energy industry and the income gained from that industry.

Second is making sure they have capabilities, not just the individual technical people who are being trained, but that in the community as a whole, everyone from the younger members, five years old, up to the elders are learning more about business and are able to grow that source of knowledge. That will help the community as a whole.

Third is making sure we have something sustainable. There needs to be a long-term plan in place. One of my advisers for Canative Energy says that you need to be in it for the long run. This is not a short-term project. You may be looking at a short-term business model, but you need to be looking 50, 70, 100 years ahead. In my experience in the energy industry, that doesn't normally happen, so that's changing a way of thinking.

The last point, which I didn't get to mention, would be not to ignore the young voices in the industry. There is a lot of sexism, a lot of racism and a lot of ageism. One of the exciting things for me, in returning to Canada, is engaging with my indigenous peer group, who are doing very exciting things and have a very different view of the world. Yes, we look forward to being heard.

[Kent Hehr]

I hear your comments, Ms. Whitford. Would you say representing these mutual benefits and community benefit agreements should focus on capacity-building for the community, and not just economic results, so that we see some of those social impacts also being incorporated into what you're trying to build between the two organizations?